Government and campaigns
After months of waiting - and more than a few shifting deadlines - the government has finally published its long-anticipated Industrial Strategy. In the hefty PDF is a clear message from the government: the UK’s economic future lies in eight growth-driving sectors, including Professional and Business Service (PBS), and it’s time to back them. They have created a plan that hopes to crowd in public and private investment, support trade and create a business environment that drives these sectors' success.
Dubbed the IS-8, these sectors are Advanced Manufacturing, Clean Energy Industries, Creative Industries, Defence, Digital and Technologies, Financial Services, Life Sciences and Professional and Business Services.
The first five sector plans have been published - and are linked above - with the remaining coming out over the summer. If you operate in these sectors, it's worth reading these plans as they'll give you a sense of the subsectors and regions with growth opportunities. In a difficult market, the recruiters who engage early will be the ones who reap the rewards.
As the Business Secretary, Jonathan Reynolds, writes in his foreword to the Professional and Business Services sector plan,
“The UK is a global leader in Professional and Business Services (PBS). The sector contributed £300 billion to the UK economy in 20241 and spans a diverse range of high growth areas and world class firms from the creative minds which make our advertising world leaders, the consultancy and legal specialists enabling complex business transactions, the provision of back office support and talent services to the UK’s most influential businesses, and the innovative architecture and engineering behind many of the world’s most admired developments.”
This is the first time services have been at the heart of an industrial strategy - and it's clear that talent firms are core to the government's vision of a competitive and growing UK economy, with the Business Secretary elsewhere writing that "our talent businesses will be vital in identifying and placing the specialist skills required to deliver our net zero ambitions."
Neil Carberry, the REC's CEO, sat on the PBS Council which helped shape the sector plan and the government's analysis of the sector. The key measures that the government will use to support PBS are:
The government is investing in £200 million capital investment in Further Education estates to tackle sector-specific shortages, including a new generation of "Technical Excellence Colleges" which will be expected to work closely with employers and deliver higher-level training for their local economies.
There's finally some flex entering the Apprenticeship Levy. Skills England, the government's new agency for skills and apprenticeships, will support short courses and foundation apprenticeships to support the IS-8 - a welcome announcement. This builds on Skills England recognising a lack of training opportunities for temporary workers as a key weakness for England's skills base earlier this month - a victory for the REC who were one of the first voices calling for the restrictive Apprenticeship Levy to be addressed. We'll be liaising with Skills England to work towards a system that supports agencies and temps specifically as details on that bit of reform to the levy is sadly still missing.
There will also be specific support for skills critical to the Industrial Strategy. This includes £187 million for digital and AI skills, £100 million for engineer skills, £600 million for construction skills and a defence package.
The government will also seek ways to improve business mobility to make it easier for professionals to move temporarily between the UK, EU and other international partners on short-term visas to meet business needs.
A big theme throughout the strategy is the importance of place. The government wants to make sure growth isn’t just something that happens in London and the South East, but something that is felt in every region. That means more investible sites across the UK, more local innovation funding, and better connections between universities and employers. From Strategic Sites Accelerators and Mayoral Growth Funds to AI Zones and supercomputing centres, there’s a clear push to make sure local economies can attract investment, create jobs, and build lasting infrastructure, including public transport. For recruiters, this means new opportunities in emerging clusters.
Finally, there’s a shift in how government intends to support businesses. At the heart of this is a drive to make the system simpler. The new Business Growth Service will streamline access to support, advice and funding with a single online platform launching in summer 2025. There will also be a network of 41 Growth Hubs for SMEs in England, delivered in partnership with local authorities and the private sector.
Procurement is getting a rethink too, with an explicit focus on using government buying power to strengthen domestic supply chains and support good local jobs, as well as making it easier for SMEs to engage with government. This is potentially good news for suppliers including staffing alike although where we would have liked to see real change was in the health space and that is not forthcoming. There’s also a push to crowd in private investment, including a new "concierge" service in the Office for Investment.
The strategy also includes measures to tackle late payments from large suppliers with a new Fair Payment Code - a poor business practice that has disproportionate knock-on effects on small suppliers in our sector.
It's hugely welcome to see PBS recognised as central to growth. Recruitment alone is a £44 billion powerhouse that enables every other sector to grow. But to make this strategy truly transformational, workforce issues will need more attention, especially after a lack of ambition on skills at the recent Spending Review. We will continue to use the REC's role on the Sector Council and our voice at the heart of government to make sure this plan is transformational for the UK's economy and productivity, ensuring that recruitment is not just seen as a service, but as a strategic driver of growth.
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