Weaknesses in how the Department for Business and Trade (DBT)
supports UK industries must be addressed if government is to
maximise the impact of its forthcoming Industrial Strategy and
achieve its priority mission of growing the economy, according to
a new National Audit Office (NAO) report.1,2,3
In support of this priority, government announced a new
Industrial Strategy in October 2024 and identified eight
growth-driving sectors that can boost output and productivity
growth over the long term.4,5 DBT's role is to support
businesses, including those operating in these priority sectors,
to invest, grow and export, creating jobs and opportunities
across the country.
In the two years since it formed, DBT has done well to merge
structures and teams from the former Department for Business,
Energy and Industrial Strategy (BEIS) and Department for
International Trade (DIT) and address its immediate skills gaps.
It has engaged extensively with industry stakeholders to
understand their needs and developed sector plans using its
knowledge of the economy. It also shares its business
intelligence widely across government.
However, DBT does not have a complete overview of what it and
wider government spends supporting industry – hindering its
ability to make sound decisions in the future and allocate
resources strategically.
To date, DBT has not looked at its industry sector strategies
collectively, with limited consideration of the trade-offs
between different business support decisions and different
sectors. This can make it difficult for stakeholders to
understand DBT's decision making, and for DBT to demonstrate how
and why it is prioritising certain decisions over others. DBT
also makes too little use of evidence of what works to inform its
approach to developing new industry support initiatives.
Despite government's ‘mission-driven' approach and its stated aim
to encourage cross-departmental ways of working, DBT is not
always able to exert influence over other departments to achieve
policy change that supports business.
And while DBT has taken steps to improve how it collaborates with
other departments, a lack of clarity has caused frustration among
some businesses regarding which department can best support their
needs.
The success of the Industrial Strategy will depend on whether DBT
and other government departments can work effectively together,
and with industry, to prioritise and target interventions that
drive growth in the priority sectors and across the whole
economy.
The NAO recommends that DBT uses the forthcoming Industrial
Strategy to review its operating model for supporting key
industry sectors.
It should also clarify the metrics it uses, and the trade-offs it
makes, when prioritising certain business support decisions over
others; consider how it can collate its spending to support
business in a more useful way; lean more heavily on evidence when
making such decisions; and develop its approach to monitoring and
evaluation to understand what works.
, head of the NAO,
said:
“DBT was created to provide a ‘front door' to the UK's key
industries, supporting government's priority mission of growing
the economy.
“It has made early headway, and now needs to build on its
approach to supporting industry and make transparent, informed
decisions about where best to deploy its resources.”
ENDS
Notes to editors
- The report will be available on the NAO website via the
following link from 00:01 Wednesday 12 March: https://www.nao.org.uk/reports/supporting-the-uks-priority-industry-sectors/
- DBT was formed in February 2023. It brought together the
relevant functions from the former BEIS and the former DIT into
one department for economic growth.
- The government is focusing on five national ‘missions', with
economic growth the priority mission.
- The Secretary of State for Business and Trade and the
Chancellor of the Exchequer announced the Industrial Strategy in
October 2024 and published a green paper for consultation:
Invest 2035: the UK's modern
industrial strategy. According to the green paper, the
Industrial Strategy is expected to be published in late Spring
2025 alongside the government's multi-year spending review.
- The eight growth-driving sectors are: advanced manufacturing;
creative industries; clean energy industries; defence; digital
and technologies; financial services; life sciences; and
professional and business services.
