A Fragile Industry Finds a Lifeline in Government Support

The UK government’s £120m pledge to support ceramics firms is a welcome recognition of the industry’s importance. However, it also raises questions about the sector’s long-term sustainability.

The funding includes £60m for capital investment and another £60m for operational costs. But some companies may already be beyond salvation, as evidenced by Denby Pottery’s administration earlier this year. This highlighted the challenges faced by ceramics manufacturers in Stoke-on-Trent, where several businesses have collapsed due to rising energy costs and increased competition from abroad.

The government’s support is necessary given the sector’s vulnerability to “gas price shocks” resulting from global events like the Ukraine war. With 90% of energy consumption in ceramics attributed to gas, previously announced measures on electricity bills will provide only minimal relief. Manufacturers must invest in long-term sustainability and energy efficiency to mitigate this exposure.

Ceramics UK’s Rob Flello notes that the funding will help ensure the sector remains competitive for decades to come. However, the fact that 14 firms have folded since 2018 suggests there are deeper issues at play. The number of ceramics companies in north Staffordshire has fallen from 137 to 123 over the same period.

A report by Kada and Ortus Economic Research offers a mixed picture. While net company worth has increased in advanced and technical ceramics, sanitaryware, and refractory products, supply chain turnover has grown by only 35% between 2018 and 2024 – hardly indicative of a thriving industry. It remains to be seen whether the government’s support will reverse these trends.

The business secretary, Peter Kyle, might be overlooking the elephant in the room: the sector’s long-term prospects are still far from secure. The £120m pledge should not distract us from the fundamental question of what this means for the industry’s future viability. Can manufacturers adapt quickly enough to changes in global markets and supply chains? Or will they continue to struggle with rising energy costs, a dwindling workforce, and increased competition?

The government’s willingness to support a key sector is commendable, but we must be wary of relying on short-term fixes rather than addressing the underlying issues. The industry’s reliance on gas for 90% of its energy consumption highlights the urgent need for manufacturers to invest in alternative sources of power.

This will not happen overnight, and it requires sustained effort from both government and industry. The £120m pledge is a stopgap measure that buys time but does not provide a long-term solution. The real test lies ahead – whether manufacturers can capitalize on this support to develop more sustainable business models, reduce their reliance on fossil fuels, and ensure the sector’s survival for decades to come.

As we watch how the government’s funding is spent, it would be wise to keep a keen eye on the sector’s progress – and not just its short-term fortunes. In the aftermath of Denby Pottery’s collapse, we saw firsthand the devastating impact that industry decline can have on local communities.