DIT and UKEF “not demonstrated progress in tackling big challenges” they now face
28 October 2020
It is now four years since the Department for International Trade (DIT) was formed to deliver the UK’s independent trade policy following the UK’s decision to leave the EU.
- Read the report: Government support for UK exporters | PDF version
- Inquiry: Government support for UK exporters
- Public Accounts Committee
No measurable progress
But with just over two months to the end of the EU exit transition period, a report by the Public Accounts Committee today says DIT has not demonstrated measurable progress in tackling the big strategic challenges it faces- either in supporting economic recovery in the wake of the Covid-19 pandemic, or in advancing the UK’s future trading relationships.
A lack of robust metrics means it is not possible to assess DIT’s contribution to export performance, or progress towards Government’s ambition to grow exports to 35% of GDP. It has not done enough to identify and help new, developing businesses to export, and lack of strategic alignment between DIT and the UK Export Finance department means that export opportunities may have been missed.
The Committee says the two departments must work more closely to respond to new export growth opportunities, identifying and investing in new businesses in developing sectors, including renewable energy.
They have not developed sufficient understanding of the challenges smaller businesses face in exporting, such as applying for finance, and are not delivering the necessary support to help SMEs grow. Out of an estimated 5.9 million UK businesses, DIT targets its bespoke support at just 230,000 potential exporters, which has been almost static for the last ten years, and UKEF directly supported only 199 businesses in 2019 - failing to meet its own target of 500.
The report identifies the dissatisfaction with the department’s digital offering. This is a key tool in linking UK exporters to international customers, the Department must improve its digital design to offer a world-class service.
The Government expects that the free trade agreements it is pursuing will boost UK exports and help smaller businesses. But there is evidence that small companies do not benefit from trade agreements as much as larger firms.
One example is that smaller businesses need simpler, faster processes and requirements when they apply for export finance – but businesses who are not customers of one of the five largest commercial banks are not able to use the online portal designed to streamline the process. DIT and UKEF need to improve what they offer to smaller businesses as a matter of urgency.
Deputy Chair's comments
Sir Geoffrey Clifton-Brown MP, Deputy Chair of the Public Accounts Committee, said:
“Neither business nor Government expected the challenges of building new international trading relationships while economies around the world are battered by the impacts of global pandemic. The department holds the keys to help the economy grow in the aftermath of the pandemic, but DIT and UKEF struggled to tackle the prevailing challenges when they were set up. The committee identified a number of areas where the department could considerably improve its performance and ensure it is at the top of the international league of export advisors, particularly by designing a world-class digital offering.
“The two Departments must step up and take a nimbler, more knowledgeable, more active role at the centre of a transforming the economy. Future export growth needs support for those smaller, innovative businesses, with potential to grow, as well as established companies.
“They should work must closer together to compliment each others’ roles, with staff trained to be able to implement this - reaching more customers, rapidly reacting to growing markets and sectors, and finally meeting Governments priorities such as supporting the export of green, low carbon businesses and services.”