Sector reacts to Spending Review

RESPONDING TO the publication of the Government’s Spending Review, UK Warehousing Association CEO Clare Bottle, said: “This Spending Review has turned out to be a missed opportunity to support the UK’s crucial logistics sector.

“Investment in housing, passenger transport, nuclear energy, and science and technology are all very welcome, but it’s vital that the Government also uses its power to enable the supply chains that underpin these sectors. Life sciences, defence and nuclear power, for example, have specialist transport and storage needs, while each new home needs to be served by 100 square feet of warehousing*.

“We’re hopeful the forthcoming Industrial Strategy will demonstrate a real understanding of the critical importance of logistics, but so far, unfortunately, the financial support just hasn’t been there. By withdrawing funding for Generation Logistics, ministers have shown that this very large sector, employing 400,000 people in warehouses alone, is not a priority for cash.”

“For many of our members, the barriers to growth come from the state simply being too slow. Our members waste far too much time with applications for job-creating logistics hubs caught in the planning system. They have to wait, sometimes years, for the connections to the electricity grid needed for new warehouses.

“If the Government wants to increase the rate of growth, it has to put its money where its mouth is – more planning officers, greater funding and flexibility for training in warehouses, and support for recruitment.”

Generation Logistics

Reacting to the loss of funding in the Spending Review, Generation Logistics programme director Bethany Windsor said: “While we are disappointed, it is not a surprise in the current financial landscape. We do still have strong operational support from DfT, despite not having financial support this year.
“Ultimately, Generation Logistics is a campaign by the sector for the sector and, in order to be sustainable in the long term, we need to ensure we can fund it successfully, which is what we’ve done this year (our third year).
“We are on track to overachieve on our targets and we are already planning for Year 4, which starts in January 2026.”

Welcomed in principle

Today’s Spending Review was welcomed in principle by business group Logistics UK,

Logistics UK policy director Kevin Green, added: “The Spending Review makes some bold pledges for transport, power generation, defence, healthcare and home building, with transport capital investment to rise 3.9% across the Spending Review period. To turn these pledges into economic growth, it is vital that the government prioritises the logistics sector through the upcoming Industrial, Trade and Infrastructure Strategies – both by providing the infrastructure our sector needs to move goods efficiently, and by enabling our sector to efficiently deliver the country’s renewal that the Chancellor has committed to. It is why 30 Chief Executives of some of the UK’s biggest businesses recently wrote to Jonathan Reynolds, requesting that logistics is included as a foundational sector in the forthcoming Industrial Strategy.

“While we welcome the Spending Review in principle, we, along with our members, are making clear to the Chancellor that this investment cannot be funded by higher taxation on hard-pressed businesses. Increases in employers’ National Insurance Contributions are costing our sector an estimated £1.7 billion, and our members simply cannot afford any more whether this is through fuel duty or other business taxes.”