Twenty-First Report - Government support for UK exporters

Select Committee

Public Accounts Committee HC 679 28 October 2020

Report Status Government responded

Conclusions & Recommendations 24 items (6 recs)

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Government Response (AI assessment · 21 of 24 classified)

Accepted 12

Accepted in Part 2

Not Addressed 3

Rejected 4

Government response

Treasury minutes: Government response to the Committee of Public Accounts on the Twenty-first report from Session 2019-21 · published 4 Feb 2021

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Recommendations & Conclusions

6 results

2 Recommendation Not Addressed

The Department for International Trade and UK Export Finance are not yet doing enough to...

Recommendation

The Department for International Trade and UK Export Finance are not yet doing enough to identify and help the businesses of tomorrow to export. The Department’s level of insight into exporters in different sectors of the UK economy is variable. … Read more The Department for International Trade and UK Export Finance are not yet doing enough to identify and help the businesses of tomorrow to export. The Department’s level of insight into exporters in different sectors of the UK economy is variable. For example, the Department is still developing its understanding of which businesses are ready to export in emerging sectors, such as renewable energy and low carbon industries. Over the last year, the Department has developed its sector teams by recruiting sector leads to help it better understand emerging sectors. The Department also continues to offer peer support where firms get an opportunity to hear how it is done from an experienced exporter. Initiatives such as the Europe trade hub have been welcomed by businesses of all sizes. We remain concerned, however, that the Department focuses on identifying which overseas markets might provide contracts for the UK’s existing exporters, rather than pursuing opportunities for future export growth by supporting new, innovative businesses. The Federation for Small Businesses (FSB) informed us that there needs to be a greater link between innovation funding and export finance. But, the Department is not confident that UK Research & Innovation (UKRI) fully understands what support companies need to become exporters, or whether its own staff consider whether innovation funding might be available to support a potential exporter. Recommendation: The Department and UKEF should develop a more integrated approach for working with other government departments, in particular with the Department for Business, Innovation and Skills and UK Research & Innovation, in order to build the UK’s industrial capability and prioritise investment in sectors of growing importance and export opportunity, such as renewable energy. The 6 Government support for UK exporters Department should also consider other ways of supporting potential exporters and companies exporting for the first time, for example, Show less

Government Response Summary

The government's response addresses funding decisions for the Towns Fund and Levelling Up Fund, providing no direct engagement with the recommendation on DIT/UKEF's integrated approach or support for exporters.

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4 Recommendation Not Addressed

The Department for International Trade is not doing enough to address the challenges that small...

Recommendation

The Department for International Trade is not doing enough to address the challenges that small businesses face when they export. Out of an estimated 5.9 million businesses in the UK, the Department focuses its bespoke support on around 230,000 which … Read more The Department for International Trade is not doing enough to address the challenges that small businesses face when they export. Out of an estimated 5.9 million businesses in the UK, the Department focuses its bespoke support on around 230,000 which has been almost identical for many years, with a turnover of over £500,000 and directs businesses below this threshold to digital services on its website. Levels of satisfaction with the Department’s digital services are low (under half of the Department’s clients report that services to help them identify export opportunities are good at meeting their needs) and use of these services is declining (registrations have dropped from 816 per month in 2018, to 450 per month in 2019). Small businesses with fewer staff may not be able to afford the time required to use the Department’s website to identify the right opportunities. In addition, smaller exporters are concerned about the varying quality of the Department’s International Trade Advisors, opportunities for businesses to report trade barriers, and the financial support available for attending trade shows. The FSB has welcomed the Small and Medium-sized Enterprises (SMEs) chapter in the free trade agreement with Japan. The Department intends to include such chapters in all its trade agreements, but the FSB informs us that utilisation of FTAs by smaller Government support for UK exporters 7 businesses is disproportionately low when compared to larger firms. There is scope for the Department to learn from other countries, such as Denmark, about how it could better target support at individual companies. Recommendation: DIT should take urgent action to ensure that more small businesses become exporters. Specifically, it should: • Improve the support it offers to smaller businesses. It should improve the quality of the International Trade Adviser service and explore the merits of introducing accreditation, ensure that its digital services meet the needs of smaller business Show less

Government Response Summary

The government's truncated response indicates the department will provide annual updates on the success of a fund through monitoring and evaluation. It does not explicitly address the specific recommendations to improve ITA quality, explore accreditation, or ensure digital services meet smaller business needs.

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1 Conclusion Not Addressed

On the basis of a report by the Comptroller and Auditor General, we took evidence...

Conclusion

On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for International Trade (the Department) and UK Export Finance about support for exports.1

Government Response Summary

The government's response provides general background information about UK exports and the Department for International Trade's role, as the committee's initial paragraph was purely introductory and did not require action.

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7 Conclusion

UKEF is concerned that where the Department’s staff do not have the technical skills to...

Conclusion

UKEF is concerned that where the Department’s staff do not have the technical skills to promote export finance, UKEF may consequently have missed opportunities to use export finance to support UK exports in some markets. For example, UKEF had supported … Read more

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8 Conclusion

The Department’s insight into exporters in different sectors of the UK economy is variable; stronger...

Conclusion

The Department’s insight into exporters in different sectors of the UK economy is variable; stronger in well-established sectors, such as aerospace, but less developed and less well-understood for some emerging sectors such as renewable energy.13 The Department told us that … Read more

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9 Conclusion

We were concerned that the Department concentrates on identifying which overseas markets might provide contacts...

Conclusion

We were concerned that the Department concentrates on identifying which overseas markets might provide contacts for the UK’s existing exporters.16 These may be larger firms in more established markets that already generate high value exports. However longer-term export growth will … Read more

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