The Cast Metals Federation (CMF) has called on Government to recognise the critical role that metal casting plays in UK manufacturing by making significant changes to the proposed British Industrial Competitiveness Scheme (BICS).
Although cast metals underpin many of the UK’s priority industrial capabilities, foundries have largely been omitted from the proposed list of sectors to be supported by the scheme – which is expected to deliver a £35–£40/MWh reduction in electricity costs (around 25%) for eligible businesses.
It its response to the Government’s BICS consultation, the CMF highlighted the negative impact that the proposals as they currently stand would have on UK foundry competitiveness and manufacturing capability.
It also added its voice to calls for a different approach to supporting British manufacturing.
Lee Marshall, Chief Executive of the Cast Metals Federation, said: “Penalising successful, clean and strategic industrial sectors like casting is clearly not a sensible way forward.
“Casting and shaping components is a critical manufacturing stage and without the metal casting industry, the Government’s Industrial Strategy priority sectors cannot grow, nor can the outputs of our foundational industries be used.
“It is vital that the Government takes this opportunity to design a scheme which reflects this and truly supports the ambitions of its own Industry Strategy.”
A strategic capability
UK foundries supply high-quality precision cast metal components to a wide range of manufacturing sectors. Very few foundries supply components to only one sector – instead, their products are defined by the type of advanced materials they cast (such as special alloys and specific grades of steel, iron and aluminium), and these are supplied into multiple end-use markets.
A survey of CMF members showed that 99% of foundries supply one or more of the eight priority sectors in the Government’s Industrial Strategy (IS-8). Of those, 75% supply into defence and 63% into advanced manufacturing.
The CMF also highlighted that metal casting is fundamental to manufacturing supply chains – forming the essential link between the foundational industries recognised in the consultation (such as steel, copper and non-ferrous metal production) and the IS-8 priority sectors.
A different approach
While welcoming the Government’s recognition that UK industrial electricity prices are damaging competitiveness, the CMF warned that the approach proposed through BICS is inefficient, introduces unnecessary administrative complexity, creates policy challenges, inhibits innovation and is clearly divisive.
Instead, the CMF has called for a simpler and fairer solution, supporting the recommendations of the MAKE UK report Tackling Electricity Prices for Manufacturers – reducing electricity costs for all industry by removing policy costs altogether, and adopting a sensible approach to how those non-commodity charges are funded in a way that supports the Government’s Industrial Strategy.
The CMF also set out concerns that the consultation risks overlooking the reality of energy-intensive manufacturing, recommending that energy intensity should be assessed at around 7% of gross value added (GVA) rather than the 20% threshold previously used. This approach would better capture manufacturers with substantial energy-dependent processes, while excluding businesses that merely assemble components manufactured offshore.
Mr Marshall added: “As the scheme is currently configured, it is difficult to see it having its desired effect. It seems more likely, in fact, to work against our national manufacturing objectives.
“A revised scheme would provide a much more sensible way forward for future energy cost support than the proposed BICS scheme – even compared to including foundry codes in the scheme as it currently stands.
“Foundries require significant long-term investment in capital equipment, permits and skilled staff and, once lost, foundry capability cannot easily be re-established.
“Without immediate Government action to reduce energy costs for foundries, the UK cast metals sector risks becoming increasingly uncompetitive – leading to reductions in the number of foundries operating in the UK.”
