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JULY 1, 2003

The British government and motorsport

Last week the British Government announced plans for a $22m Automotive Academy to be established in the West Midlands. This will have nine regional offshoots and will develop existing and new training programs to produce skilled employees for all levels of the automobile industry in Britain.

"This Academy will train the industry to have cutting edge skills to create cutting edge products," said Trade and Industry Secretary Patricia Hewitt. "It has every chance of being a great success because it will take the best training that already exists, enhance it and then make it easier to access. Industry sees this as the right approach rather than starting from scratch."

The Automotive Academy is the result of several years of consultation between the government and the motor industry and was a recommendation of the Automotive Innovation Growth Team, which had four different project groups examining different aspects of the industry.

The AIGT noted in its recommendations was that one of the UK's particular strengths is in advanced technology in motorsport, with Britain being the home to the most successful global motorsport cluster, which commands 80% of the world market and a strong manufacturing base which is looked to the motorsport industry.

In October last year there was a debate about motorsports in the House of Lords with Lord Astor of Hever, the president of the Motorsport Industry Association, asking the government about its plans to ensure that the British motorsport industry remains a world leader.

"Sadly, we appear to be witnessing the beginning of a brain drain of motorsport talent away from the UK as overseas motorsport clusters begin to grow, such as in Germany, around Mercedes, BMW, Toyota and Porsche," Lord Astor said. " We shall see those areas attracting growing numbers of UK motorsport personnel. People, and their innovative and competitive minds, are singularly the most valuable resource within the community of knowledge that is Motorsport Valley UK. The government must ensure that the working environment not only retains these talented people but also attracts more of them to this cluster."

Lord Astor called for tax breaks for motorsport engineering, R&D and perhaps circuits and pointed out that the aerospace industry already has such advantages.

"It is vital that our government move quickly, and with just as much creativity, to level this playing field," he said. "If they do not take urgent action, our industry will suffer the same fate as the once world-beating British motorcycle industry. It will be destroyed by complacency."

But there are other views as well.

"I believe that we should be careful not to subsidize an industry which is quintessentially commercial and competitive," said Lord Chandos. "Our industry should not be disadvantaged, although small measures of support would be welcome; but nor should it be mollycoddled."

Since then the Motorsport Competitiveness Panel, comprising 15 representatives from the industry, has been trying to develop a program to sustain and strengthen the UK's leading position in motorsport. This is headed by Hewitt and Paul Barron, the president of Alstom UK and includes Chris Aylett (Motorsport Industry Association), Richard Burden MP (the government's "motorsport minister"), David Richards of Prodrive, the ISC and BAR, Murray Smith of Octagon and Sir Jackie Stewart, representing the British Racing Drivers Club, the owners of Silverstone.

Stewart has been very vocal in his calls for government help for Silverstone. The government has already helped by providing funding to speed up the construction of the Silverstone bypass but Stewart's calls for more funding have to date been ignored. Stewart has said that he expects there to be an announcement about a government initiative for Silverstone before the British Grand Prix.

Stewart is hoping for cash to fund the work needed at Silverstone but it does not look like he will get it as the government continues to focus not on the immediate issues but on building up the industry in the long-term. Silverstone may get funding for a motorsport academy or for a kart facility but this will do nothing for the Grand Prix.

Formula 1 boss Bernie Ecclestone, who has invested $20m of his money in Silverstone and recently attacked the BRDC for wasting that money, says that Grand Prix racing has gained nothing from the rebuilding program. The construction of new pits and a new media center might make Ecclestone feel better but the chances of the British Grand Prix losing its place in the F1 calendar because of Silverstone's failure to improve the facility are slim. The F1 teams would not accept that and would argue, with some effect, that the facilities at Silverstone are much better than some of the other tracks visited.

There is a belief in F1 circles that the money that the BRDC is getting from Octagon for the lease of the track, which is believed to be $5m a year, should be reinvested in the circuit. At the moment a chunk of this money goes to the government in tax but some is used to pay dividends to BRDC members. Formula 1 argues that it would be better for the BRDC to borrow against this revenue and upgrade the facilities rather than hoping that the government will do it for them. Silverstone is a private enterprise and using public money to increase its value is a risky path for the government to take.

The government will make its decisions soon and the motor racing world will be watching with interest.