Beyond lockdown: responding to the needs of sector and places

Sector performance in the shift from crisis to recovery is a key driver to what happens next.

What sector responses are we seeing and what does this mean for specific places in the South East Midlands area?

In the second discussion in our Beyond Lockdown series, business leaders from two dominant sectors in the area shared their best practice, challenges and asks for the future.

Outlining the response strategy taken by the Vauxhall-Opel Group, Helen Foord, Head of Government Relations and Public Policy said, “Luton is home to our commercial vehicle manufacturing plant which feeds our European markets, and our warehouse that serves all of our operations in the UK. As Europe went into lockdown, there was no market. The Group took the early decision to close our operations in a controlled manner”

Across the UK automotive sector, manufacturing of cars and vans in April was down 99.7% and 99.3% respectively, with the sector UK sales down 97% and 86% coinciding with what is usually the busiest time of year.

“The immediate, short-term support, specifically the furlough scheme, was critical for the automotive sector.”

Vauxhall-Opel shared with the UK Government our COVID-19 safety protocols, learning lessons from their global manufacturing operations, including those based in Wuhan, China. They began reopening some of their manufacturing production in April and are now working to over 100 different COVID-19 safety protocols.

“Looking to the medium-term, said Helen, “the potential of a hard EU exit remains a major issue for our sector. COVID-19 has impacted our ability to prepare for this.” Investing in local manufacturing and assisting the automotive supply chain with their preparedness for EU exit is where the sector needs national and local government and LEPs to immediately add value.

And, with eyes on the longer term? Moving towards a zero-carbon economy requires the sector to transform processes, products and services as well as have the workforce available with the technical skills required. “We are already looking at what we can do with other businesses on renewable energy sources, and also working to transform our processes, but further support for this investment will be needed to help transform manufacturing and our supply chains to net zero,” Helen added.

Focusing on the impact of lockdown on the aviation sector, Matt Harvey, Director at British School of Aviation shared some pretty stark imagery of the active flight paths across Europe in May. Traffic was unsurprisingly down 90%. “Some recovery data for aviation shows we’re looking at between two and seven years,” he said.

In the run up to 2020, the sector was already facing a significant skills shortage for both pilots and qualified technicians. With redundancies and skilled employees assessing their post-lockdown options, “we need to look at how we get new talent into the industry otherwise we’re storing up a problem for when we get people back flying,” Matt said.

“And, we understand that the UK is not pursing discussions to be part of the European Aviation Regulations body following the transition period so we need to understand how we will fit into the world of aviation after this,” Matt added.

“There’s no question that the region is hurting pretty badly,” stated Professor Iain Gray, Director of Aerospace at Cranfield University “No other region in the UK has the aviation and aerospace underpinning that we have here. The South East Midlands’ innovation and expertise is unique, but we need to be much better at positioning our strengths as being at the heart of longer-term economic recovery success. But, are we sufficiently represented on the key national groups?” he questioned.

Over this period, Local Enterprise Partnerships continue to feed into, and work to join-up with, national policy and funding areas.

The recently published R&D Roadmap confirms Government’s commitment to the R&D uplift target of 2.4 per cent of GDP by 2027, confirmed Julian Bowrey, Regional Manager at Innovate UK.  “We are not expecting any radical change to the Grand Challenges, although there could be more emphasis given to carbon reduction targets and building capability in some of the areas of vulnerability exposed by COVID19.

“Alongside our existing package of support to innovative companies, we are hoping to announce shortly further competitions, again with a focus on and sustainability and net zero carbon. I’m not expecting the commitment to levelling-up R&D investment to mean disinvestment in the Arc,” Julian added.  

Reflecting on interactions between business and place leaders over this period, Mike Spicer, Managing Director at PolicyDepartment said, “They need each other. The resilience of sectors and places are co-dependent, neither can operate separately.

Mike talked through different priorities and perspectives business and place leaders have. “They don’t always talk the same language but can be very powerful campaigners when united.” 

“Alongside our existing package of support to innovative companies we are hoping to announce shortly further competitions, again with a focus on and sustainability and net zero carbon. I’m not expecting the commitment to levelling-up R&D investment to mean disinvestment in the Arc,” Julian added.  

So where is the common ground? Financial transition from crisis to recovery, resilient places and future prospects are three core themes to address together.

Mike said looking at international examples of crisis planning and response, such as the International Chambers of Commerce guide to emergency preparedness, response and recovery or the New Zealand guide to re-evaluating place strategies after disaster is key.

“You need sophisticated mapping of business and economic assets that must go beyond the usual national accounts and labour market taxonomy stuff. It must speak to day-to-day business realities, such as the coverage of emergency supplier contact databases,” Mike added.

You can look at Mike’s full presentation on the SEMLEP website.

Work on rebuilding the local economy is short, medium and long term. “It’s against the backdrop of several fast-changing situations, including exiting the European Union as well as other factors such as how quickly we can get exports up and running, our reliance on global supply chains, financial position of smaller firms in the run up to lockdown, internet connectivity and, on health vulnerabilities” said Claire Ackroyd SEMLEP’s Senior Analyst.

SEMLEP has appointed Lichfields to assist in the economic recovery strategy. They will be supporting us to develop economic impact and recovery scenarios to inform priorities and decisions.

The Beyond lockdown discussion series brings together views of businesses about economic recovery.