Can Britain compete again? How BICS could transform UK manufacturing

As managing director of Kingsbury, the UK supplier of high-precision machine tools and manufacturing technology, Richard Kingsbury examines how the British Industrial Competitiveness Scheme (BICS) could help manufacturers turn lower energy costs into long-term investment and growth.

For years, the debate around British manufacturing competitiveness has focused on cost. And understandably so. Rising energy prices, global competition and economic uncertainty have placed significant pressure on margins. This has forced businesses to make difficult decisions about investment, and in some cases, where production should be located.

At a time when many manufacturers are questioning how best to remain competitive, the British Industrial Competitiveness Scheme (BICS) arrives with the potential to provide much-needed support. By reducing electricity costs for eligible manufacturers, it has the potential to ease one of the pressures that has made investment increasingly difficult to justify.

But lower costs alone will not make British manufacturing more competitive. The more important question is what manufacturers do with the opportunity they create.

Manufacturing at a crossroads
The scale of the challenge becomes particularly apparent when Britain is compared with international competitors. For manufacturers, the impact of comparatively high electricity costs goes far beyond the monthly energy bill. Every additional pound spent on keeping a factory running is a pound that cannot be invested elsewhere in the business. That matters because competitiveness is ultimately determined by investment.

With industrial electricity prices in the UK are estimated to sit between 22p-25p per kWh, and manufacturers in France and Germany benefitting from prices closer to 14p-16p per kWh, and while industrial energy costs in North America can be as low as 5p-6p per kWh – competing is near impossible.

This disparity has real-world consequences. It influences not simply the cost of producing something today, but the decisions that determine where and how things will be produced tomorrow.

What opportunities could BICS unlock?
Launching in April 2027, BICS will reduce electricity costs by up to £40 per megawatt hour. For businesses facing sustained pressure on margins, that relief will undoubtedly be welcome. But BICS should not be viewed as a solution to Britain's manufacturing competitiveness challenge. Energy is only one part of the equation. Productivity, skills, access to capital, technology adoption and the ability to compete for investment will continue to determine the long-term strength of UK manufacturing.

The real value of BICS is this shift in conversation from survival to opportunity. For manufacturers that have spent years managing rising costs, the scheme could create breathing room to focus on the investments that drive long-term competitiveness.

These opportunities include:

Investment and process improvement
Additional resources would be directed towards modernising production processes and implementing advanced manufacturing technologies.

Lower energy costs can improve a manufacturer's position today. Investment in technology and productivity can improve its position for years to come.

Skills and workforce development
As manufacturing becomes increasingly automated and digitally enabled, the skills required on the factory floor are changing. Businesses need people capable not simply of operating equipment, but of programming, optimising and integrating increasingly sophisticated manufacturing systems. If BICS creates additional financial capacity, some of that opportunity should be considered in the context of skills as well as equipment.

Long-term strategic investment
Arguably, the most important opportunity is building confidence. When cost pressures ease, businesses are better positioned to think beyond short-term survival and focus on future growth. Whether that means expanding facilities or entering new markets, greater certainty often becomes a catalyst for investment. And confidence in long-term growth.

The cost of standing still
There is another side to the investment debate that is often overlooked. Choosing not to invest has a cost too. Ageing equipment can become more expensive to maintain. Productivity improvements are deferred. Capacity remains constrained. Competitors that continue investing in newer technology can increase the gap.

The danger is that businesses become trapped in a cycle where short-term cost pressures prevent the very investments that could improve their long-term competitiveness.
That is why BICS could be more significant than the headline reduction in electricity costs suggests. If lower operating costs allow manufacturers to break that cycle and reconsider projects that have been sitting on the sidelines, the impact could extend far beyond the energy bill.

Preparing for applications
The first BICS application window is due to open on 1 October 2026. For manufacturers, now is the time to begin assessing how they could make the most of the opportunity strategically.

Businesses may wish to:
• Review current and projected energy expenditure.
• Identify investment projects that could benefit from cost savings.
• Evaluate skills gaps and workforce development priorities.
• Consider process improvements and automation opportunities.

Organisations that begin planning now will be best placed to act quickly when applications open and maximise the potential value of the scheme. Full guidance can be found here.

A test for British manufacturing
Ultimately, British manufacturing has never lacked ingenuity or ambition. What it has lacked in recent years is the certainty needed to unlock long-term investment. BICS represents an important step towards improving competitiveness and rebuilding confidence.

This is the beginning of the conversation. If manufacturers seize the opportunity, the scheme could do far more than reduce energy costs. It could lay the foundations for a stronger and even more resilient industrial future.