Council asks Scottish Government to extend furlough scheme for aerospace sector

“The Scottish Government is fully committed to doing all that it can to protect the Aerospace Sector in Ayrshire and across Scotland.” Those were the words of reassurance from Jamie Hepburn, Minister for Business, Fair Work and Skills after the three party leaders from East Ayrshire Council sent a joint letter to the Scottish Government voicing their concern for the aerospace industry in Ayrshire.

In their letter to the Scottish Government, the Leaders acknowledged the support that has been provided to the aerospace sector via the furlough scheme. They requested that it be extended for Prestwick’s aerospace companies beyond 31 October to help preserve skilled jobs in a sector where recovery is still some way off.

This sector is of huge importance to Ayrshire’s economy, with the aerospace cluster located at Prestwick Airport and the surrounding areas employing around 4,000 people. The future growth of the aerospace sector features prominently in the Ayrshire Growth Deal proposals, as it has the potential to benefit the wider business base and create significant indirect employment opportunities.

The COVID-19 pandemic has had a serious impact on aviation across the world with companies experiencing disruption in production and slowing demand. 70% of aircraft fleet have been grounded, passengers have stopped travelling and demand for new aircraft and spare parts has therefore declined. To help address these issues, an Ayrshire Taskforce was established in June to link to the wider aviation sector’s response to the economic downturn and to try to protect as much of the business base at Prestwick as possible.

In his response to the Council’s party Leaders, Jamie Hepburn acknowledged the disruptive effect of the pandemic on the industry and reported that projections indicate that the path to recovery will be long and slow.

He outlined steps that have already been taken to support the aerospace sector, including the creation of an Aerospace Response Group (ARG) which brings together representatives from across industry, trade unions and central and local government, with the aim of safeguarding jobs and preserving Scotland’s aerospace manufacturing and research and development capability. The group has identified five major themes which it is currently looking into: pan-UK level activity and opportunities for collaboration; people & skills which involves mitigating job and skill losses; research, development and innovation; stronger supply chains; and market opportunities and diversification.

The ARG is actively seeking input from across the sector that will be used to shape actions that could help in the period leading up to any recovery in demand. A number of companies within the Prestwick cluster as well as South Ayrshire Council are members of the group and the Minister is encouraging local feedback through them.

Appreciating the lifeline that the Job Retention Scheme has provided for so many, the Minister and the Cabinet Secretary for Economy, Fair Work and Culture have pressed the UK Government on a number of occasions for an extension and more flexibility of the scheme. They have also asked for a scheme that is specific to the aerospace sector and which recognises the challenges in terms of the anticipated time to recovery. The economy ministers of Scotland, Wales and Northern Ireland also jointly wrote to the Secretary of State for Business, Energy and Industrial Strategy to press for the creation of a UK Aerospace Taskforce.

Jamie Hepburn also reinforced the Scottish Government’s commitment to the Ayrshire Growth Deal and indicated that it could be signed off this autumn, after having to be postponed earlier this year due to COVID-19. He stated that the Scottish Government’s £103 million investment for Ayrshire is secure and that Government officials are working hard with the Councils to ensure that all aspects of the Deal, including robust business cases for all projects, are ready for Deal signing at the earliest opportunity.

Councillor Douglas Reid, Leader of the Council, said: “Along with the other party leaders I thought it was important that we join together in approaching the Scottish Government about a matter which affects the whole of Ayrshire and so many of its businesses and residents.

“We know that both industry bodies and trades unions have been working together to protect the interests of employers and workers in the aerospace sector. We stand united with them, and we believe it is crucial to our future economic prospects that support for this industry continues beyond the end of October. That is why we are seeking an extension to the furlough scheme in light of these exceptional circumstances.

“We appreciate the measures that have been taken by the Scottish Government so far in support of the sector and we hope to hear a positive outcome to our request as soon as possible.”

Labour Group Leader Councillor John McGhee said:  “As a former employee of the industry, I am delighted to be supporting the employees and to unite with the union campaign to protect jobs in this sector.

“The cross-party support is very welcome and hopefully all UK Governments will do everything they can to protect these vital jobs.”

Councillor Tom Cook, Conservative Group Leader, said: “We all know the importance of the aerospace sector to Ayrshire and the development of businesses around Prestwick Airport is a key objective of the Ayrshire Growth Deal.

“The furlough scheme has protected thousands of jobs across Scotland but at a huge cost to the UK Treasury and as many business sectors reopen, it is being wound down. It is therefore important that both Governments work collaboratively to find a solution to provide ongoing support for the aerospace industry, which finds itself in a unique position as a result of planes across the world being grounded.

“I offer my full support to the efforts being made to protect employment and ensure that the sector is given time to recover.”