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Last month business secretary Lord Mandelson announced, with something of a fanfare, the creation of the new Automotive Council. But linked with it was another announcement that predictably attracted rather less publicity – the formation of a supporting Supply Chain Council.

The Automotive Council has the task of transforming the UK business environment for automotive – in particular, attracting inward investment for the research and development of new technology.

At the same time, the Supply Chain Council, which will be chaired by Vauxhall chairman Bill Parfitt, will focus on the development of tier one companies in the UK, to identify any gaps in the supply chain and look for occasions to develop opportunities to supply components for emerging technologies.

The first meeting of Automotive Council took place on Thursday of last week at which Mandelson announced a £19m competition to support industry-led collaborative projects on ultra-low carbon vehicles, focusing on technology development and expanding the UK supply chain.

The government-backed Technology Strategy Board is putting £10m into this new Low Carbon Vehicles Innovation Platform competition and will run it in partnership with the cross-government Office for Low Emission Vehicles, while the Department for Transport is putting in the other £9m.

The idea of a supply chain council for the motor industry is a first for the government and if it is successful might even lead to the creation of supply chain councils for other industries that the government wants to promote.

However, the national newspapers have been full of stories that Nick Reilly, head of General Motors Europe is pressing the government for cash to support the UK’s automotive supply chain.

By all accounts this is a pet project for Mandelson, but even so, starting a new venture with demands for cash is risky and might deter ministers from developing the idea further.

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