The professional services sector is one of eight earmarked by the government as the focus of its Industrial Strategy, launched for consultation this week, and a plan to deliver long-term growth to the UK.

The government has said it wants to ease the investor journey and create long-term, inclusive, secure and sustainable growth. The Industrial Strategy – the first in seven years – sets out to create a pro-business environment and play to the UK’s strengths. 

In addition to professional and business services, the key sectors it identifies as having the highest growth potential are advanced manufacturing; clean energy industries; creative industries; defence; digital and technologies; financial services; and life sciences. 

A greater share of international investment

The government says that over the past 25 years, the top 30% of sectors ranked by productivity in 1997 were responsible for generating roughly 60% of the economy’s entire productivity growth. It wants to capture a greater share of international investment in strategic sectors and motivate domestic businesses to boost their investment and scale up their growth. 

A consultation on Invest 2035: the UK’s Modern Industrial Strategy will seek feedback from industry with a final industrial strategy due to be published in spring 2025, alongside the multi-year Spending Review. 

A green paper issued on Tuesday highlights opportunities to expand the global market for the UK’s professional and business services, “for example, by capitalising on emerging strengths in accounting and law-tech, promoting the UK’s regional professional and business services strengths overseas, and unlocking barriers to trade in services”.

Investor confidence to plan

Business and Trade Secretary Jonathan Reynolds says the Industrial Strategy will give investors the confidence to plan for the next 10 years and beyond: “This is the next step in our pro-worker, pro-business plan, which will see investors and workers alike get the security and stability they need to succeed.”

Alan Vallance, ICAEW Chief Executive, says: “A modern industrial strategy is a vital step towards providing the economy with the stability it requires for growth, and we are pleased that the government has today set out its plans in this area.

“In particular, we’re delighted to see recognition of the professional and business services sector as one of the areas with the highest growth opportunity for the economy and business, as it is key to the building of a highly skilled economy. ICAEW members advise three million businesses across the country and know how to boost productivity, take opportunities and create growth to build the tax base, increase employment and share prosperity.

“We believe that the government needs to take a long-term holistic view and ensure that its industrial strategy is integrated with plans for trade, tax, investment and skills, with aligned objectives and outcomes and a focus on regional hubs. We want Britain to be the best place to invest and to start, run and grow a business, and we stand ready to play our part.”

The government has also named Clare Barclay, CEO of Microsoft UK, as Chair of the new Industrial Strategy Advisory Council, to provide expert advice developed in partnership with business, unions and stakeholders from across the UK. “While we fully embrace the industries of today,” she says, “we must also have a clear plan for future growth, and the Advisory Council will play a central role in shaping and delivering this plan.”

Businesses up and down the country are being invited to respond to the Industrial Strategy green paper. Views are sought from business, international investors, unions and any other interested parties, on the overall vision, approach to growth sectors and the policy levers needed to drive investment.

Delivering on the UK’s potential

Chancellor of the Exchequer Rachel Reeves says: “We have some of the brightest minds and greatest businesses in the world, from the creative industries and life sciences to advanced manufacturing and financial services. This government is determined to deliver on Britain’s potential so we can rebuild Britain and make every part of the country better off.”

ICAEW’s Budget representation, published in September, called on the government to articulate a clear trade strategy and use every lever available to get UK businesses of all sizes the access they need to international markets, saying: “The UK is world-beating on services and is strong on services exports. The global economy, as it grows and matures, will require more services, which places UK businesses in a strong position for the next decade. To maximise opportunities in the long term, a UK trade strategy should include a specific vision for professional and business services trade, given its value to the economy.”