Select Committee on Trade and Industry Second Report



46. DTI and its Agencies have a number of PSA targets, some expressed as savings in running costs or annual reductions in unit administration costs. The DTI also has targets on accommodation costs, better quality services, electronic government, sickness absence, fraud and procurement.[51]

Electronic government

47. DTI had a target of 25 per cent of services to be accessible electronically by 2002, from an October 1997 baseline of 8 per cent. The target was all but achieved by June 1999.[52] In our July 1999 Report on e-commerce we expressed some reservations on the methodology used, which was based on the volume of individual transactions.[53] In its June 2000 response to our query, DTI told us that revised targets and methods of measurement had been set requiring enabling of on-line access to all key services by 2005, with an "interim target" of 50 per cent of such services — measured as complete services — by 2002.[54] The "key services" were "informed by customer feedback, particularly the views of the People's Panel".[55] The Permanent Secretary told us in July 2000 that the DTI had an intermediate aim that the DTI and its agencies should have 60% of services available electronically, and that the department was on course to meet both its targets.[56] The targets for electronic government are quite rightly being made more demanding. We recommend explicit identification in future DTI Annual Reports of those key departmental services which are not electronically accessible.

Prompt payment

48. The DTI failed in 1998-99 to meet its target to pay 97.5% of all correctly presented bills within 30 days of receipt of invoice, let alone its commitment to pay all bills within that time. Its performance in 1998-99 was in fact worse than in 1997-98, when it achieved a rate of 98.2%. Its target for 1999-2000 was 100 per cent. It has not only failed to meet this target, but seems to have done worse than in the previous year.[57] DTI intends to use new IT reporting capabilities to "monitor prompt payment on a regular basis and push towards achieving future targets".[58] The Permanent Secretary told us in July 2000 of his great regret at this failure to meet the target and his hope that it would be rectified within the year.[59] Subsequent written evidence suggests that the failure to pay bills on time is spread over a number of parts of the department.[60] The record of the Ministerial private offices seems to be particularly lamentable, with only 66% paid within 30 calendar days. The latest figures showed that the department was still only achieving 92% payment within a month, meaning, in the department's words, that "performance has dipped from the previous return.....The Secretary of State and the Permanent Secretary have both expressed concern and asked for renewed efforts to be put in place to address the issue...".[61] We were therefore surprised to discover no reference to the target for prompt payment in the main text of the new Public Service Agreement. The failure of the DTI to meet its target of paying its bills within 30 days, as the department sponsoring legislation penalising late payment of commercial bills, is not merely an embarrassment. It is an indictment of the department's ability to manage its own affairs that, having identified its failure, things should be getting worse rather than better. We will expect the forthcoming Departmental Report to be able to report an improvement.


49. The DTI is subject to a Government-wide target of reducing sickness absence rates by 30% in 2003. The target for the DTI has been set to reduce absence from 8 days per staff year in 1998 to 6.9 days by the end of 2002-03 — a rate of reduction below the national reduction target (13.8% rather than 30%).[62] We raised with the Permanent Secretary the need for such a target. He told us that the figures had been set by the Treasury, who had felt that the Civil Service's figures were too high and wanted to get them down. [63] DR 2000 reported that the figures for 1999 would not to be available until late 2000. When we requested these figures, we have been told that the report on sickness absence for 1999 was now not due until mid 2001; and furthermore that the baseline figure of 8 days has been adjusted to 9.6 days.[64] There seems to have been no identifiable sickness problem in the DTI. The Treasury imposed an apparently arbitrary target. It now turns out that statistics take years to come through and then require adjustment. We cannot see what is gained by imposition of such relatively simplistic targets, which turn out to be incapable of accurate or timely measurement.

Export licences

50. The targets for dealing with applications for export licences continue to be a sore point. DTI seeks to provide a substantive response to applications for standard individual export licences handled within the department within 10 working days, and for those circulated to other departments within 20 working days. It has a similar target for advice on the licensability of goods. In recognition of the difficulty of some cases, which may require consultation with a number of UK agencies, and with diplomatic posts overseas, the department seeks to meet its target for dealing with 70% of applications for licences. It has consistently failed to meet that target, generally achieving around 55%. The latest figures show a gradual decline through 2000 in the percentage completed within target.[65] We commented on this issue in our December 1998 Report on Strategic Export Controls.[66] The delays in coming to decisions on circulated licence applications are primarily attributable to other Government departments, where an informal target of 10 working days is apparently applied. In its February 1999 Response, the Government told us that the Export Control Organisation (ECO) had agreed a mechanism whereby, when the processing target had not been met on a particular application, exporters could be put in direct contact with the relevant advisers to be given a reasonable estimate of how long they would have to wait. The introduction of the ELATE computer system would speed up the exchange of licensing information between Departments.[67]

51. The Quadripartite Committee joint inquiry into the Government's Annual Reports on Strategic Export Controls has highlighted the concerns we expressed in 1998 at the performance of the ECO. We are aware of the difficulties under which the Office operates. In 1998 the then Minister responsible attributed the disappointing performance against target in 1997-98 to the introduction of the stricter consents policy on India and Pakistan. However, the introduction of systems for applications to be electronically submitted to DTI and circulated thereafter within Whitehall, and of a bonus system for ECO staff described to us in written evidence, might have been expected to have led to significant improvements.[68] We have been pleased to learn of progress made in the introduction of the ELATE system, and of the growing proportion of licence applications ,made electronically.

52. We have noted from the Service Delivery Agreement that DTI service providers " have very well developed systems for seeking users' views on their services and for monitoring performance against Service first standards..". We recommend that the department ensure that the Export Control Organisation meet the highest standards set by other DTI service providers in awareness of their customers' views, and that consideration be given to testing the Organisation against Charter Mark criteria.


  53. The DTI's principal agencies — the Advisory Conciliation and Arbitration Service, Companies House, the Insolvency Service, the Patent Office, the Radiocommunications Agency, the Redundancy Payment Service, the National Weights and Measures Laboratory, the Employment Tribunals Service — are generally set annual performance targets; have reported figures on financial performance and personnel numbers; and are subject to a centrally organised programme of quinquennial review. The Regulatory Departments — the Office of Fair Trading, the Office of Telecommunications, the Office of Gas and Electricity Markets — and the Export Credits Guarantee Department publish their own annual reports. Together, these Agencies and Departments account for around 4000 staff, but relatively slight net expenditure, since many are trading funds or cover at least part of their costs from fees or other income. Several indeed generate a surplus.

54. DTI is in some respects less forthcoming about its own affairs. The department is responsible for substantial expenditure on a whole range of programmes. The annual Report to Parliament is the principal means of reporting on these. The Objectives and measurable targets set out above can cover only a fraction of this activity. Programme expenditure is therefore regularly evaluated. The evaluations are publicly available and we have used them in our inquiries. We were therefore interested to note the proposal in DR 2000 that evaluation might be extended to "running cost-funded activities as well as programmes".[69] The vigour with which the department evaluates its activities and measures its output seems to grow in proportion to the distance of those activities from its centre. We can see no reason why a range of DTI activities which now go apparently unevaluated and indeed unnoticed should not be exposed to the light of day. We recommend that the practice of publication of internal and external evaluation of programme activities be applied also to evaluation of running cost- funded activities.


55. Executive Agencies are set a range of output targets each year, as well as annual cost reduction targets . The results are recorded in their own Annual Reports, and subsequently in the DR.[70]

  • In 1999 we queried the failure of the Patent Office to get anywhere near their targets for issuing search reports within 12 weeks of receiving a request and examination reports within 18 months of publication. The problem arose from ever-rising demand, and the need to prioritise between searches and examinations.[71] In 1998-99 new and complex targets were set based on a mixture of volume output and timeliness.[72] These are by and large being met. We have this year pursued the extent to which the Patent Office is meeting its "goals" set out in DR 1999 and reproduced as "priorities" in DR 2000.[73]
  • This year we sought evidence on the figures from the Radiocommunications Agency which showed that the targets for dealing with applications for, and amendments to, Category C licences had been badly missed, with only 40 per cent cleared in 60 days rather than 100 per cent as hoped.[74] The DTI explained that there were a number of reasons —

      - increased volume of applications for such licences
      - loss of skilled radio engineers to the communications industry
      - "teething problems" with new computer assignment systems
      - difficulties in the process of obtaining national and international clearance.[75]

    The Agency has a target of making 20% efficiency gains over the five years from 1998-2003. Having made a 5% gain in 1998-99, we were told that they will meet their yearly gain target of 2%.[76]

DTI staff numbers

56. DTI central staff numbers fell substantially in the 1990s, to a low point of just over 6,250 in 1998-99. DR 1999 published plans for around 6,440 staff in 1999-2000 and subsequent years.[77] DR 2000 shows an estimated figure for 1999 - 2000 of just over 6,500, and plans for 2000-01 and 2001-02 for around 6,700 staff .[78] The actual April 2000 figure was 6,568.[79] In response to our question, DTI told us that this figure

"reflects new requirements, in particular relating to the creation of British Trade International and the Small Business Service, and recruitment to bring staffing levels closer to full strength."[80]

The Permanent Secretary told us in oral evidence that the phrase "full strength" used in written evidence had been to some extent misleading, and agreed that BTI staff should perhaps have been separated out.[81] BTI has in effect taken over the staff formerly in DTI's Export Promotion Group. While the arrangements for managing and accounting for these staff, and locally and regionally based export promotion staff hitherto on DTI's books, have only recently been decided, they are plainly no longer to be regarded as part of the DTI central HQ headcount. Subsequent evidence showed that 843 of the 6,568 staff recorded were either BTI or Small Business Service staff.[82]

57. The Permanent Secretary told us that the crucial figure, and the one discussed with the Treasury, was the department's running costs figure. [83] DR 2000 shows over £412 million spent on salaries and general administrative expenditure. There is however significance in numbers, even if efficiencies enable the management of the department to have more staff at less cost. We obtained from the department a breakdown of one of its constituent Groups, the former Industry Group now known as the Business Competitiveness Group.[84] This illustrates the shift referred to in evidence to us from the Permanent Secretary from the older to the newer industries among sponsoring divisions, with an increase in the Communications and Information Industries Directorate matched by a fall in the Engineering Industries directorate.[85] A number of other public bodies with somewhat smaller staffs follow the practice of public reporting of the numbers, responsibilities, pay and grading of their staff. The public is entitled to an answer to the question " How many staff does the DTI have and what are they doing?". We believe that Parliament and the public is entitled to fuller details of a department's staff numbers and structure and look to the next Report to provide such details.


58. The Modernising DTI Action Plan includes several programmes and targets intended to provide for a more diverse workforce within the department.[86]

  • In November 1998 the work of an Advisory Group for Racial Equality within the DTI resulted in the launch in November 1998 of a Programme of Action for Racial Equality. DR 2000 records "establishing mechanisms for engaging staff in discussions of racial equality issues and organising seminars to raise awareness". DR 1999 recorded that 14% of staff were known to be of ethnic minority origin, with "a small increase" in ethnic minority representation at managerial level (Bands B and C). DR 2000 records 14.3% of staff as of ethnic minority origin, and "a small increase" in ethnic minority representation at managerial level. The figures provided to us in September 2000 show 15.7 % of staff to be of ethnic minority origin. Challenging benchmarks have been established.

  • An Advisory Group for Women's Issues was established in 1998-99.[87] DR 1999 announced that one of the priorities for 1999-2000 would be the launch of Action Programmes for women and for disabled staff.[88] In 1999-2000 an action programme on widening opportunities for women was published, including "benchmarks against which progress can be assessed." The programme "exists to improve the position of women within the Department, tackle problem areas, and establish benchmarks against which progress can be measured." In the past two years there have indeed been small increases in the proportion of women in managerial grades (33% in 1998, 34% in 1999) and in the Senior Civil Service ( 18.5% in 1998, 21% in 1999). Benchmarks now established call for an increase in women in the Senior Civil Service from 21% to 35% by 2005, and an increase over the same period in managerial grades to a position of near equal representation of men and women.[89] BTI's SDA states that it will work towards the general civil service wide diversity targets "but in a small organisation working in an international business environment achieving these may be difficult."

  • An Advisory Group on Disability has provided advice on an action programme for disability; 4% of staff were reported in DR 1999 as known to have a disability, rising to 5 % in DR 2000 and now 5.1%. Targets have been set for 2005.

59. DR 2000 records the publication of an Equal Opportunities Annual Report to "provide staff with information on progress in meeting the benchmarks for representation at all levels included in the Action Programmes"-.[90] "Increasing the diversity of the Department's workforce particularly at senior levels" is a key area identified in the Modernising DTI Action Plan; "equality of opportunity underpins the Department's aim to reflect the diversity of British society in its recruitment of staff."[91] The evidence suggests that the issues are indeed being seriously addressed by the department. Achieving a greater level of diversity among the department's workforce is of a different level of significance to, for example, a slight reduction in sickness absence. We welcome the translation of the benchmarks set for DTI's programme for diversity in employment into formal performance targets.

51  Cm 4611, pp 19-21 Back

52  Cm 4611, p 21 Back

53  Electronic Commerce, Tenth Report of 1998-99, HC 648 Back

54  Ev, p 3, Answer B Back

55  ibid Back

56  Q 55 Back

57  Ev, pp 25 & 30 Back

58  Cm 4611, p 21: p 147, 13.24 Back

59  Qq 106-111 Back

60  Ev, p 25 Back

61  Ev, p 25, 30 Back

62  P 21: p 152, para 13.57 Back

63  Qq 76-83 Back

64  Ev, pp 28- 29 Back

65  HC Deb, 9 January 2001, col 497w Back

66  HC 65 of 1998-99, Second Report Back

67  HC 270, Fourth Special Report, page x Back

68  Ev, p 25, (d); Q 84 Back

69  Cm 4611, para 13.7 Back

70  Cm 4611, pp 154-161 Back

71   Back

72  Cm 4611, p 156 Back

73  Ev, pp 4-5, Answer F Back

74  Cm 4611, p 159. These licences involve frequency assignment with site clearances or international co-ordination. They "primarily apply to licences for microwave fixed links which are used for communications systems infrastructure": Ev, p 7, Answer K  Back

75  Ibid Back

76  Ev, p 28 Back

77  Cm 4211, p 157, Table 5 Back

78  Cm 4611, p 194, Annex A5 Back

79  Ev, p 23 Back

80  Ev, p 7, Answer K Back

81  Q 96-7 Back

82  Ev, p 23 Back

83  Q 96 Back

84  Ev, p24 Back

85   Ev, p24 Back

86  Ev, p 46 Back

87  Cm , 12.11 Back

88  Cm 4211, p 122 Back

89  Ev, p 33 Back

90  Cm 4611, para 13.50 Back

91  Cm 4611, para 13.55 Back

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