Banking on solving the manufacturing skills crisis

Banking on solving the manufacturing skills crisis

Date: Wednesday 6 November 2019

News Banking on solving the manufacturing skills crisis

David Atkinson, UK head of manufacturing for SME and Mid Corporate at Lloyds Bank Commercial Banking, explains why one of the UK's largest retail and commercial banks is supporting training for 3,500 manufacturing and engineering apprentices, trainees and graduates.

Earlier this year Lloyds Bank announced that it was investing a further £5 million to fund its sponsorship of the industry leading Advanced Manufacturing Training Centre (AMTC) on the Manufacturing Technology Centre campus near Coventry. The funding doubles the bank's original commitment, bringing total funding to £10 million over 10 years. But what is a major bank doing getting involved with training engineers?

According to David Atkinson, Lloyds Bank's head of manufacturing for SME and Mid Corporate, it's just a natural progression from the establishment of Lloyds Bank more than 250 years ago. While the manufacturing industry evolves through what has been dubbed ‘Industry 4.0’, Lloyds Bank was supporting manufacturing during the first industrial revolution. It was in 1765 when button-maker John Taylor and iron producer Sampson Lloyd set up a private banking business in Dale End, Birmingham. Their mission was to provide banking services to local businesses, which at that time were largely manufacturing businesses. They opened their first ‘proper’ branch in 1864 in Oldbury in the heart of the Black Country.

Mr Atkinson has spent over 30 years in banking, supporting SMEs and smaller corporates across the Midlands and beyond.

Lloyds Banking Group’s current chief executive, Antonio Horta-Osorio, was appointed in 2011 and has since implemented a strategy that focuses on supporting the UK economy, ultimately ‘Helping Britain Prosper’.

Mr Atkinson explains:

"We understand how important manufacturing is to the UK. The sector directly supports 2.7 million jobs and makes up about 10 per cent of GDP. However, research by Oxford Economics and the Manufacturing Technologies Association looked at the indirect impact of manufacturing - transport, hauliers, logistics, security, local retail - and that translates into the sector directly & indirectly supporting 7.5 million jobs and contributing to around 23 per cent of GDP!"

Our strategy encompasses strong support for manufacturing and is made up of three strands. First, we are supporting access to finance with £3bn of new net lending in 2018-20.

Second, our local relationship managers work very closely with management teams to get to the heart of the businesses and understand their strategies. This is key to supporting their ambition and helping them achieve the growth they want. To support this, we’ve provided more than 350 of our managers with a bespoke training course in conjunction with the University of Warwick and Warwick Manufacturing Group, to help them understand the intricacies of the manufacturing sector. This means they can better inform and support clients.

Finally, one of the key challenges facing the manufacturing sector is a shortage of skills. It’s crucial to recognise that this issue is not just prevalent on the shop floor. Our recent Business in Britain research, which surveyed 200 larger manufacturers, found that 88% admitted they had a skills issue in their business, and half (49%) said the problem was most acute among management. Encouragingly, many firms are investing in skills as they know better productivity is vital to future success.

The manufacturing sector is seen as the beating heart of the UK economy and we believe it is integral to the wider prosperity of the country. This is what led to our commitment to address the issue of a skills shortage in the sector and to support the Advanced Manufacturing Training Centre.”

The extra funding will support around 3,500 manufacturing apprentices, graduates and engineers by 2024, equipping them with the right skills to be at the forefront of manufacturing in the future.

Mr Atkinson adds:

"The apprentices and skilled engineers who emerge from these world-class training facilities play a central role in helping to drive up the productivity of the nation. They will be part of broader efforts to rebalance our economy - a more dynamic, open economy that is backed up by long-term investment in infrastructure, skills, science and the latest technology."

The funds will contribute to a 350 per cent increase in the AMTC's original target for training apprentices, made in 2015. It will also support the AMTC's commitment to address the shortage of skills, which Paul Rowlett, managing director of the AMTC, says is one of the biggest challenges facing the manufacturing sector.

"As manufacturing moves forward with new technology it needs new skills. UK industry has under-invested in technology for the last 30 years and productivity is low, so even if a business decides to invest, the skills they need aren't readily available. That's the skills challenge we have, and there needs to be a step change," he says.

As well as its ongoing funding, Lloyds Bank has partnered with the AMTC to offer financial support to companies wishing to recruit and train badly-needed manufacturing apprentices. The bank is releasing millions more in funding through the Apprenticeship Levy Transfer Scheme. This will allow SMEs to take on apprentices, fully-funded by the Apprenticeship Levy scheme and Lloyds Banking Group's levy contribution. The Group has committed to supporting apprenticeships with £9 million from its Apprenticeship Levy Fund, initially partnering with the AMTC and the West Midlands Combined Authority (WMCA) and the Greater Manchester Combined Authority (GMCA).

So why did Lloyds Bank choose to sponsor the Advanced Manufacturing Training Centre?

Mr Atkinson explains: "The High Value Manufacturing Catapults were being established and the great work of the MTC was brought to our attention. We saw that it was doing great things for the manufacturing community. It was adding value to the UK economy by helping manufacturers, not just in the Midlands but across the country.

"The fact we have chosen to double our original investment speaks volumes."

The MTC and its skills division AMTC are well-run organisations - so much so that we have referred around 250 of our manufacturing clients to the MTC, of which 70 have gone on to run projects supported by the MTC. A good example is Cambridge-based Dufaylite, a world leader in the design and production of paper honeycomb and board. Support from Lloyds Bank and the MTC helped the business develop its strategy and culture, and build a prototype, enabling it to move products through the factory faster, meeting increased demand.

"As a result of these interventions, the companies involved have accrued about £4.5 million in bottom-line benefits, attributable to their work with the MTC. Our continued support for the centre was an easy decision."

According to Paul Rowlett, though, there is still much work to be done to fulfil the needs of the manufacturing sector.

"It is our primary aim to develop future talent, and to seed a pipeline of skilled engineers and technicians. It is very clear we are having an impact, but it needs to be national and we need to replicate the excellent things we are doing here around the country. That is why we so pleased to have been chosen as the training provider for a new centre in Oxfordshire to provide the skills needed by industry in that region, particularly in the field of science and research," he says.

The Oxfordshire Advanced Skills apprenticeship programme, a partnership between UK Atomic Energy Authority and the UK’s Science and Technology Facilities Council, is similar to the Ansty training centre and develops work-ready technicians and engineers for employers eager to grow their businesses and ensure a competitive advantage. The new centre opened in September 2019 and welcomed over 70 apprentices, with ambitious growth seeing this increase to over 150 over the coming year. The apprentices will receive specialist training giving them the skills to make an immediate difference in their organisation.

"An AMTC-trained apprentice is a very special asset, but it's not just the advanced skills, such as additive manufacturing or intelligent automation, that companies need. An SME needs people trained in the basic and traditional skills as well. So we instil work behaviours into our apprentices so they are reliable and work-ready and trained in practical skills such as bench fitting, machine tool operation, measurement and inspection. The fact that they are also exposed to the latest manufacturing technology is an advantage and adds to the contribution our apprentices can make." he says.

The benefits are ultimately felt by the UK engineering companies who take on an MTC-trained apprentice. There are many such companies throughout the UK, and they come back for more. Warwickshire-based robotics engineering company Cyber-Weld is one of them.

Fraser Reid, managing director of Cyber-Weld, says MTC apprentices are making a significant contribution to the business. More than half of the Cyber-Weld workforce are either apprentices in training or who have recently completed their training. The company has been taking business-ready apprentices from the Coventry-based Manufacturing Technology Centre for the past seven years.

Cyber-Weld takes on apprentices who are two years into their four-year course. He says the apprentices who have been trained at the MTC are skilled in engineering basics, have the discipline required in the workplace and a proven ability to learn.

"MTC apprentices are generally of a very high standard. They have been exposed to modern manufacturing techniques as well as being schooled in the basics. We are able to train them in the full range of disciplines here and they are a real asset. They return our commitment to them and their training with loyalty and we have a very good retention rate", he says.


The MTC facility exudes excellence from the moment you step through the front door.

Steve and his team carry an air of calm and confidence whilst transmitting an absolute passion for what you do.

Best afternoon I’ve spent away from the office for a long, long time.

Send me some boxes to tick, because the visit ticked them all.

Colin St.John
Freefoam Plastics