The UK Modern Industrial Strategy is the government's 10-year plan to back eight high-growth sectors with over £120 billion of public investment, from engineering and advanced manufacturing to defence, clean energy, and digital technologies.
It runs to 160 pages, with a separate plan for each sector on top. We've read it so you don't have to, and we keep this page current as the government delivers against it.
Here's the part most summaries miss: this is no longer a plan on paper. In the third quarter of 2025 alone, the government logged over £250 billion of investment commitments and more than 45,000 jobs across these eight sectors, with named programmes now open to companies like yours. The money is moving. The question is whether the buyers and funders looking for suppliers in your sector can find you and tell you're ready.
So what does it mean for your business, and what should you be doing now?
What it is, and why it matters to your business
The strategy is a 10-year commitment to make it quicker and easier to invest in the UK, with long-term funding and reforms targeted at eight priority sectors it calls the IS-8. It was written to reverse weak investment and productivity, reduce business costs such as industrial energy prices, and give companies the stability to make long-term decisions.
For you, the value isn't the policy. It's that procurement teams, prime contractors, and co-investors are being pointed at these sectors with budgets attached. When a buyer or a funding programme goes looking for a supplier with your capability, you want to be the company that's easy to find, easy to verify, and obviously ready. That's a marketing and visibility problem, and it's a solvable one.
Is your sector included?
The government has prioritised eight sectors. If you work in or supply any of them, there's support and funding in some form. Five of them hold the clearest opportunities for the engineering and manufacturing companies we work with, and each one is built on a supply chain of smaller specialists that primes and programme leads are actively trying to find.
Advanced Manufacturing
Advanced Manufacturing covers automotive, batteries, aerospace, space, composites and advanced materials, and agri-tech. It carries £4.3 billion of investment, including £2.8 billion for R&D, plus DRIVE35's £2.5 billion for the automotive sector and a British Industrial Competitiveness Scheme that will cut industrial electricity costs from 2027. Automotive alone contributes over £25 billion in value and nearly 800,000 jobs, with the trade body SMMT pointing to a £50 billion growth prize (SMMT). If you're in aerospace, composites, or automotive, the work you already do is what these programmes need.
Defence
Defence covers shipbuilding, land and air systems, defence technology, dual-use materials and electronics, and the supply chains behind them, backed by rising defence spending toward 2.6% of GDP by 2027. The strategy is explicit about pulling more small and medium suppliers into major programmes, through a new £65 million Defence Office for Small Business Growth and Defence Growth Deals now launched across Plymouth, South Yorkshire, Scotland, Wales, and Northern Ireland. Defence already supports more than 200,000 UK jobs, and the trade body ADS estimates that reaching 3% of GDP by 2035 would add around 50,000 more (Financial Times, September 2025). If you make precision components, work with specialist materials, or hold the right accreditations, this is a sector actively recruiting suppliers.
Clean Energy Industries
Clean Energy Industries is one of the largest supply chain opportunities in the whole strategy, with the government targeting a doubling of investment to over £30 billion a year by 2035. It spans offshore and onshore wind, nuclear fission, fusion, hydrogen, carbon capture, and heat pumps, and it runs on a long chain of engineering and manufacturing suppliers: transformers, switchgear, cables, steel towers, vessels, and the installation and maintenance behind them. A new £1 billion Clean Energy Supply Chain Fund under Great British Energy, a £544 million Clean Industry Bonus for the offshore wind supply chain, and the National Wealth Fund's £27.8 billion are all pointed at building that domestic capacity. Foundational inputs the strategy names directly, steel, chemicals, critical minerals, and composites, sit right where many of our clients already operate. Supplying the global transition could be worth £1 trillion to UK businesses by 2030.
Life Sciences
Life Sciences covers medicines, diagnostics, and medical technology, backed by over £2 billion of government funding and a sector the strategy expects to grow by £41 billion by 2035. The supply chain story here is resilience: a £520 million Life Sciences Innovative Manufacturing Fund is set up to onshore critical manufacturing and reduce reliance on a small number of overseas suppliers, and a growth mandate on NHS Supply Chain, which handles well over half of NHS medical device spend, is meant to pull more domestic innovators into procurement. For precision engineers, cleanroom manufacturers, device makers, and component specialists, this is a sector with funding and procurement reform aimed squarely at UK suppliers.
Digital and Technologies
Digital and Technologies covers AI, cyber, semiconductors, quantum, and the data infrastructure the other seven sectors run on, with £500 million for a Sovereign AI effort and AI Growth Zones unlocking data centre investment. Quantum stands out: the strategy has dedicated £670 million to accelerating it toward working quantum computers by 2035, and Oxford Economics, cited in the Digital and Technologies Sector Plan, projects quantum could create 126,100 UK jobs and add £11 billion to GDP by 2045. This one is close to home for us: Pallant is based in Brighton, in what the Science and Technology Secretary has called Greater Brighton's emerging "Quantum Silicon Valley," anchored by the University of Sussex's Sussex Centre for Quantum Technologies and Universal Quantum in nearby Haywards Heath. The global race is accelerating, with the US taking $2 billion of equity stakes in quantum companies and McKinsey forecasting around 5,000 quantum systems worldwide by 2030 (Financial Times). If you provide IT infrastructure, connectivity, hardware, cyber, or specialist engineering for deep-tech, you're both a sector in your own right and a supplier to every other one.
The remaining three sectors, Financial Services, Professional and Business Services, and Creative Industries, complete the IS-8 and are covered in the government's sector plans. They sit further from the engineering and manufacturing work we focus on, so we keep our analysis on the five above.
Not sure where your capability fits? Book a call and we'll talk it through.
How much is on the table
Public investment exceeds £120 billion across the IS-8 and the UK as a whole, with private co-investment expected to multiply it.
Investment by IS-8 sector
| Sector | Confirmed or announced public investment | Notes |
|---|---|---|
| Advanced Manufacturing | £4.3 billion, including £2.8bn R&D | Plus DRIVE35, worth £2.5bn for the automotive sector |
| Defence | £400 million for UK Defence Innovation | Plus up to £330m via the National Security Strategic Investment Fund and wider MOD procurement |
| Clean Energy | £8.3bn (Great British Energy), £21.7bn (carbon capture, over 25 years) | Plus a £1bn Clean Energy Supply Chain Fund and £544m Clean Industry Bonus |
| Life Sciences | £2 billion+ | Includes a £520m Innovative Manufacturing Fund and up to £600m for health data |
| Digital and Technologies | £500 million (Sovereign AI) | Plus AI Growth Zones, compute, and digital skills |
| Creative Industries | £150 million Creative Places Growth Fund | £25m to each of six Mayoral Strategic Authorities |
| Financial Services | Regulatory and market reform led | Focus on fintech, capital markets, and competitiveness |
| Professional Services | £100 million Digital Adoption fund | Support for AI integration and digital productivity |
Cross-sector funds supporting every sector
| Programme | Investment | What it does |
|---|---|---|
| National Wealth Fund | £27.8 billion | Co-invests in strategic sectors and supply chains |
| British Business Bank | £25.6 billion capacity | Growth and innovation finance, plus a £4bn Industrial Strategy Growth Capital allocation |
| Public R&D budget | More than £86 billion over the Spending Review period | Targeted at the IS-8, with UKRI allocated to 2029/30 |
| UK Export Finance | £80 billion capacity | Supports exporters across all eight sectors |
| Local Innovation Partnerships Fund | £500 million | Cluster-based innovation in priority regions |
Some sectors benefit more from regulatory reform, export support, and infrastructure than from direct grants. Defence and clean energy also draw on significant spending outside the strategy, through the MOD and energy security budgets.
What's live now, and what's coming
Much of the strategy is a 10-year build, so some schemes are still being designed. But a growing number are already open or imminent, and these are the ones worth acting on first.
Lower energy costs. The UK has the highest industrial electricity prices in the International Energy Agency, so this is the one that matters most to many manufacturers. The British Industrial Competitiveness Scheme will cut industrial electricity costs by up to 25% for around 10,000 eligible manufacturers from 2027, with payments backdated to April 2026. From April 2026, the British Industry Supercharger lifts network charge compensation from 60% to 90% for around 500 energy-intensive businesses. Make UK has welcomed the scheme but cautions it will only "scratch the surface" of the wider energy cost problem (Financial Times, April 2026).
Automotive funding you can apply for. DRIVE35 commits £2.5 billion to the automotive sector, and its Supplier Readiness and Transformation scheme is already live through growth hubs in the West Midlands and North East.
Finance and exports. The British Business Bank has been refocused specifically on the eight industrial strategy sectors (Financial Times, February 2025), so its firepower is now aimed where you are. Its Industrial Strategy Growth Capital adds £4 billion for IS-8 companies, with direct investments up to £60 million. The National Wealth Fund is deploying £27.8 billion into capital-intensive projects, and UK Export Finance has up to £80 billion to back exporters.
Skills and talent. The £54 million Global Talent Fund is funding 12 universities to recruit top researchers into these sectors, alongside new Technical Excellence Colleges and a more flexible Growth and Skills Levy covering short courses in AI, digital, and engineering from April 2026.
Defence specifically. A £182 million Defence Skills package with five Defence Technical Excellence Colleges, a £65 million Defence Office for Small Business Growth and Office for Defence Exports, and Defence Growth Deals now launched with £250 million across Plymouth, South Yorkshire, Scotland, Wales, and Northern Ireland.
Clean energy supply chains. A £1 billion Clean Energy Supply Chain Fund under Great British Energy, of which £300 million is already committed to offshore wind, plus a £544 million Clean Industry Bonus steering investment into UK supply chains.
Place and planning. AI Growth Zones are live in the North East and Lanarkshire, a £600 million Strategic Sites Accelerator is speeding up investable sites, and a new grid Connections Accelerator Service is cutting connection waits.
We track each new quarterly announcement and what it means for our clients on our quarterly updates page. New programmes land every quarter, so the simplest way to keep up is to get them by email.
What this means for your business, and what to do now
Because most schemes have no application portal or deadline yet, it's tempting to wait. That's the mistake. The companies that win from a 10-year strategy are the ones that are already visible and obviously credible when a buyer, a prime contractor, or a funding programme comes looking. By the time a portal opens, the shortlist is often already forming around the suppliers people can find and verify today.
That readiness is what we build. We apply a structured 3-step process to ensure your company shows up and stands out from the first supplier search to the final shortlist.
Step 1: Foundations and conversion
Step 2: Trust and consideration
Step 3: Awareness and network scaling
This is the heart of our B2B lead generation work for manufacturing, engineering, and defence companies: turning the attention this strategy is creating into qualified enquiries.
Get quarterly email updates when funding applications are announced
New schemes, deadlines, and investment commitments land every quarter. Join our mailing list and we'll send you the updates that matter for your sector as they're announced, so you don't have to keep track and read all the new documentation yourself.
Prefer to talk it through first? Book a call with Simon.
Frequently asked questions
What is the UK Modern Industrial Strategy?
It's the government's 10-year economic plan, published in 2025, to grow eight high-potential sectors (the IS-8) through over £120 billion of public investment, reforms to make investing easier, and a dedicated plan for each sector running to 2035.
Which sectors does it cover?
The IS-8 are Advanced Manufacturing, Defence, Clean Energy Industries, Digital and Technologies, Life Sciences, Financial Services, Professional and Business Services, and Creative Industries, plus the foundational industries that supply them, including composites, steel, and critical minerals.
How much funding is available?
Public investment exceeds £120 billion, with major cross-sector vehicles including the £27.8 billion National Wealth Fund, the British Business Bank, more than £86 billion in public R&D, and £80 billion of UK Export Finance capacity. Private co-investment is expected to add considerably more.
Can my business access it, and how?
If you work in or supply one of the eight sectors, you're in scope. Some schemes are already open, such as DRIVE35 supplier funding and energy cost relief, while others are still being designed. The practical first move is to make your company easy to find and verify, so you're on the shortlist when programmes and buyers come looking.
What's available right now rather than later?
Live or imminent schemes include the British Industrial Competitiveness Scheme for energy costs, DRIVE35 supplier readiness funding, the British Business Bank's growth capital, the Global Talent Fund, Defence Growth Deals, and AI Growth Zones. We keep a current list on our quarterly updates page.
Let's talk
You can speak with Simon Batchelar, Co-Founder and Marketing Strategy Consultant at Pallant, who has prepared this analysis and can discuss how your business can position itself to benefit from the funding and support available.
Sources and further reading
- UK Modern Industrial Strategy (full policy paper)
- Industrial Strategy Prospectus
- Industrial Strategy Sector Plans
- Clean Energy Industries Sector Plan
- Life Sciences Sector Plan
- Quarterly update: July to September 2025
- Quarterly update: October to December 2025
- Quarterly update: January to March 2026
- The UK's Modern Industrial Strategy (gov.uk hub)
- Industry bodies: ADS (aerospace, defence, security and space), SMMT (automotive), and Composites UK (advanced materials).
- Local quantum cluster: the University of Sussex's Sussex Centre for Quantum Technologies (see Peter Kyle's visit and its world-record quantum sensing discovery), Universal Quantum, and the Oxford Economics quantum report.
- Independent commentary (Financial Times): British Business Bank told to refocus lending on government's priority sectors (February 2025); UK business urges more action on energy bills as ministers set out £600mn scheme (April 2026); UK to kick off new defence industrial strategy with £250mn (September 2025); The quantum computing revolution is closer than you think (Big Read, 2026).
Last reviewed June 2026. We update this page as the government publishes new commitments and quarterly delivery data.