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UTILITY WEEK | 3RD - 9TH FEBRUARY 2017 | 11 Policy & Regulation for their role in delivering a cost-effective low-carbon transition. Finding ways to further reduce the costs of key low-carbon generation technologies is also central. Offshore wind and nuclear feature most prominently. Aside from support for smart and green energy technologies, it is also notable that the proposed industrial strategy dedicates a lot of space to the UK's skills and labour requirements. This fact was welcomed by the sector skills organisation Energy and Utility Skills Group – which is shortly to release its sector strategy for skills and workforce renewal. However, the group's chief executive, Nick Ellins, while optimistic about the implications of the industrial strategy for sector skills support, is also concerned that the green paper's plans to reform techni- cal education in the UK focus heavily on advanced manufacturing and construction capabilities, but do not make any direct ref- erence to the other skills that utilities will need if they are to be a driving force behind a sustainable industrial revolution. "We would like to see a more overt recognition of the needs of the energy and utilities sector – which will deliver almost 60 per cent of the National Infrastructure Pipeline," he tells Utility Week. There are many other elements of the industrial strategy green paper that could influence the future of energy and utility companies – not least the government's expectations for increased productivity across the whole economy and increased visibility of trickle down benefits for UK small and medium enterprises via procure- ment for key public sector and infrastructure contracts. Water companies should also note that the "upgrading infrastructure" chapter iden- tifies the challenges ahead for resilient water supplies in the UK and the need to revisit approaches to flood defence. The full impact of government's rehabili- tation of industrial strategy will not become clear until the current consultation is com- plete and more detailed implementation plans are shared, including a framework for adoption across the devolved nations. But the green paper has placed energy utilities front and centre of the government's plans for economic resilience post-Brexit and the industry must now take the opportunity to set out its stall – detailing both its willing- ness to take a leading role, and the things it will require if it is to live up to government's expectations. For industry comment on the industrial strategy consultation, see p5 Beyond the headlines The government's proposed industrial strategy sets out growth ambitions across a broad spectrum of the UK economy. Many of the most pertinent points for utilities leaders relate to its pillar for reducing energy costs while promoting clean growth. However, other strategy pillars have implications for utilities too: Boosts for R&D The government proposes that smart and clean energy technologies including energy storage and demand-side response will share in a new £4.7 billion Industrial Chal- lenge Strategy Fund. The government's chief scientific officer Sir Mark Walport has also been asked to assess the case for setting up a new research institution for the advance of battery technology. Addressing skills gaps Government has recognised the challenges posed by deficiencies in basic literacy and numeracy in the UK and, more specifically, by shortfalls in the availability of robust talent in science, technology and maths subjects. To improve the talent pool for British industry, it has put forward plans to set up a new system of technical educa- tion in the UK similar to those in Germany and Norway. Achieving best practice in procurement Government wants to see public sector procurement work more effectively as a means to boost economic activity. It is rolling out a "balanced scorecard" approach to procurement across all construction, infrastructure and capital investment projects worth more than £10 million – including those projects detailed in the National Infrastructure and Construction Pipeline. A significant proportion of these are utilities schemes. Joining up infrastructure planning To redress the negative effects of historical misalignment between different infrastructure ambitions, government wants to further empower the National Infrastructure Commission and Infrastructure Projects Authority to ensure that required upgrades to energy, transport and water systems, as well as flood defence and digital infrastructure, marry up. It also specifically identifies the need to ensure resilient water supplies as essential to wider industrial ambitions. Making sector deals Government wants to develop special frameworks to support sectors it deems to be particularly important to the UK's future competitiveness and productivity. Five sectors have been selected to benefit from early sector deals, including the nuclear industry. Development of its sector deal will be led by Lord Hutton. Getting institutional support right Government has recognised that sectoral and regional institutions can play a major role in enabling growth and transformation in key sectors. It has asked which institutions could be created or strengthened to acceler- ate the realisation of industrial and economic ambitions. 10 The number of "pillars" within the proposed industrial strategy. These include: investing in science, research and innovation, developing skills, upgrading infrastructure, improving procurement, delivering affordable energy and clean growth and creating the right institutions to bring sectors together £4.7 billion The amount government has suggested it will put behind an Industrial Challenge Strategy Fund for technologies including energy storage and demand- side response 15 The number of UK sectors identified by government for whom energy costs represent more than 10 per cent of business expenditure 2020 Government has stuck by its target date for offering smart meters to every household and business in the UK in its proposed industrial strategy 15 The number of "core routes" proposed for a new technical education system in the UK to support industrial ambitions STRATEGY BY NUMBERS