APPENDIX 7
DEPARTMENT OF TRADE AND INDUSTRY
Public Service Agreement 2001-04 Technical
Notes
The following sets out the full technical details
of how the PSA for the Department of Trade and Industry published
in "2000 Spending Review: Public Service Agreements 2001-2004"
(Cm 4808) will be measured.
The links included in this document are for
information purposes only, generally the information is free,
however, in some cases there is a cost to purchase statistical
information from the site, usually in the form of a book.
Target 1.
Improve UK competitiveness by narrowing the productivity
gap with the US, France, Germany and Japan over the economic cycle.
Joint target with HM Treasury.
Technical Notes
Source: OECD statistics (please see:
http://www.oecd.org/statistics/).
Timing: Based on economic cycle, which
is defined as the period between two dates when the economy is
judged to be on-trend, or at potential. A full economic cycle
includes both a period in which output is above potential, and
a period in which it is below potential. The Treasury's methodology
for assessing on-trend points is set out in "Fiscal policy:
public finances and the cycle", HM Treasury, March 1999.
Ambiguous terms: The productivity gap
is calculated by reference to output per worker and output per
hour. To close the productivity gap it is necessary to achieve
higher productivity growth over the period in question than the
comparator countries. Output per worker is calculated as GDP divided
by total employment.
The methodology for calculating output per hour
is set out in Economic Trends 530 "International Comparisons
of Productivity and Wages" by Harley and Owen. Estimates
of output per hour are less timely for international comparisons
and will come out with a delay for some countries, in particular
Japan.
Productivity relative to other countries will
be compared considering the factors that affect the transparency
of the comparisons, such as differences in the economic cycles
of the comparator countries.[8]
Target Date: 2004.
| |
GDP per worker | GDP per hour worked
|
| United Kingdom | 100
| 100 |
| US | 145 |
125 |
| France | 118
| 121 |
| Germany | 111
| 118 |
| Japan | 99
| 93 |
Target 2.
Help build an enterprise society in which small firms of all
kinds thrive and achieve their potential, with an increase in
the number of people considering going into business, an improvement
in the overall productivity of small firms, and more enterprise
in disadvantaged communities.
Technical Notes
A: Individuals going into business
Source: Annual survey carried out by Small Business
Service (currently being put out to tender).
Ambiguous terms: "Considering": to a certain
extent this has to be taken on faith, but can be tested through
a survey questioning business ideas, motivations and any steps
they have taken thus far and compared to local variables—self-employment
rates, VAT registration rates and business bank account activity.
Date: Annual from 2001; target date 2004.
B: Improvement in the overall productivity of small firms
Source: Annual Business Inquiry (for general information
on the ABI please see: http://www.statistics.gov.uk/themes/commerce/surveys/surveyofannualbusiness.asp).
Scope: England.
Ambiguous terms: "Small firms" is taken
to mean whole enterprises with under 250 employees. This matches
the definition used by Eurostat and all EU member states. "Productivity"
is taken to mean gross value added (gva) per employee.
Date: Target date 2010, although progress will be
monitored annually from 2001. A target date of 2010 has been chosen,
due to it taking some time before being able to assess fully the
impact of the Small Business Service upon small firms.
C: More enterprise in disadvantaged communities
Sources: VAT registrations, flow of people into self-employment,
and number of people considering going into business. Only a rise
across all of these measures will be considered as meeting the
target.
Ambiguous terms: Disadvantaged communities will be
defined using the DETR deprivation index (please see: http://www.regeneration.detr.gov.uk/rs/03100/index.htm),
both geographically (areas with high levels of deprivation) and
demographically (eg single parents and ethnic minorities).
Date: Annual from 2001; target date 2004.
Target 3.
Make and keep the UK the best place in the world to trade electronically,
as measured by the cost of Internet access and the extent of business
to business and business to consumer transactions carried out
over e-commerce networks.
A: Cost of internet access
Source: The Office of Telecommunications (OFTEL) International
Benchmarking Study of mobile services and dial-up PSTN Internet
access (Public Switched Telephone Network: refers to analogue
rather than digital telephone lines). (See http://www.oftel.gov.uk/feedback/benc1200.htm).
This study reflects prices at August 2000. The survey looks at
dial-up Internet access, including unmetered packages, and mobile
phone services. Countries considered in the study are the UK,
France, Germany, Italy (mobile only), Sweden, and the US states
of Ohio and California (Internet only).
Ambiguous terms: Lowest cost of access will be assessed
on the basis of the cost of 20, 30 or 40 hours of use per month,
and "always on", on-peak or off-peak.
Date: achieve target by 2002 and maintain it thereafter.
OFTEL carry out this benchmarking survey every six months.
B: Higher percentage of business to business/business to customer
transactions to be carried out on e-commerce networks that in
any other G7 country
Source: The Office of National Statistics (ONS) is
currently piloting a survey to measure the extent of e-commerce
within businesses. In addition, OECD are agreeing core indicators
on business and individual use of e-commerce, which include measuring
the proportion and value of transactions. It is hoped that individual
countries will use these core indicators and the related OECD
questionnaire to gather data on use of e-commerce. DTI also carry
out their own international benchmarking survey on use of e-commerce
which attempts to measure progress against this target.
Ambiguous terms: the "extent" of business
to business and business to consumer transactions will be measured
by value and proportion.
Date: Achieve target by 2002. DTI study is annual.
The ONS pilot is to be completed next year, and maybe annual after
that (this is still to be decided and may be more frequent). OECD
may gather data annually or more often from next year.
Target 4.
Improve the economic performance of all regions measured by
the trend in growth of each region's GDP per capita.
Joint Target with DETR
Source: The estimate of Gross Domestic Product (GDP)
per head at Nuts level 1, current prices, (workplace based) produced
by the Office of National Statistics. Further work will be needed
to adjust to constant prices. The data are produced annually but
are subject to revision.
Scope: English Regions.
Measured by: The core indicator is the regional variations
on GDP. Data for 2000 will be available in the first half of 2002.
When sufficient further years are available, a trend for each
region will be established with respect to: similar data for the
UK or England; historic data for that region and whole country;
the economic cycle; GDP components and any other data deemed useful.
This trend will then be compared with the benchmark trend estimates.
Target 5.
Improve the overall international ranking of the UK's science
and engineering base, as measured by international measures of
quality, cost-effectiveness and relevance.
Source: OECD (http://www.oecd.org/statistics/) Science
Citation Index (http://www.isinet.com).
Measured by: International ranking on quality, relevance
and cost-effectiveness of the science and engineering base output.
Date: Annual from 2001; target date 2004.
Target 6.
Increase the level of exploitation of technological knowledge
derived from the science and engineering base, as demonstrated
by a significant rise in the proportion of innovating businesses
citing such sources.
Source: Community Innovation Survey.
Measured by: the percentage of innovating businesses,
as defined by the Community Innovation Survey, citing science
and technology base sources, including DTI supported standards
and measurement.
Date: survey every two years from 2001; target date
2005.
Target 7.
Have the most effective competition regime in the OECD, as
measured by peer review, and achieve a fairer deal for consumers,
as measured by the level of consumer knowledge and understanding
of rights and sources of information.
A: Most effective competition regime
Source: Survey of experts in the competition field,
commissioned by the Competition Policy Directorate within DTI.
Measured by: Views of experts.
Ambiguous terms: Peer review will be conducted through
identifying a group of experts, both in the UK and abroad, who
could give an objective assessment of, and will be asked to rate,
the UK's competition regime. Work is ongoing to identify this
group of experts.
Date: Survey carried out at beginning and end of PSA
period; 2001 and 2004.
B: Level of consumer knowledge and understanding
Source: MORI Survey.
Measured by: Consumers surveyed to assess consumer
knowledge and skills.
Date: Survey carried out at beginning and end of PSA
period; 2000 and 2003.
Target 8.
Ensure competitive gas and electricity prices in the lower
half of the EU/G7 basket, while achieving security of supply and
social and environmental objectives.
A: Prices
Source: International Energy Agency and European Commission
published in IEA Energy Prices and Taxes Quarterly Statistics
and converted by DTI using EUROSTAT exchange rates.
Measured by: Pre- and post tax gas and electricity
prices to final consumers (industrial and domestic). "EU/G7"
means the price in the 15 EU member states and the non-EU G7 (USA,
Japan and Canada). This definition may be reviewed if significant
price convergence in the Euro zone occurs or if significant shocks
in one or more comparator might make comparison less useful.
Ambiguous terms: Security of supply objectives are
pursued through emergency planning, transmission system operator
investment signals (reflected in price controls) and wider UK
and EU level policies. They should be achieved without compromising
the price target. Social and environmental objectives are pursued
through a range of policies (and reflected in statutory guidance
to the Gas & Electricity Markets Authority).
Date: annual from 2001; target date 2004.
B: UK to obtain 5 per cent of its electricity from renewable
sources by 2003 as a step towards a 10 per cent reduction by 2010,
subject to the cost to consumers being acceptable.
Source: Energy statistics produced by the Energy Technology
Support Unit and the DTI and published in the DTI's digest of
UK Energy Statistics annual publication.
Ambiguous terms: Renewable sources are defined as
those which are continuously and sustainably available in our
environment. In relation to the costs of renewable sources being
acceptable to consumers, the DTI have, in the publication "New
and Renewable Energy, Prospects for the 21st Century, The Renewables
Obligation, Preliminary Consultation", set out the costs
and invited comments from the readers.
Date: annual from 2001; target date 2004.
C: Fuel expenditure as a percentage of income for the lowest
three income deciles to be reducing and below 4 per cent by 2003-04.
Source: Family Expenditure Survey run by ONS.
Date: Annual from 2001.
Target 9.
Improve the environment and the sustainable use of natural
resources, including by reducing greenhouse gas emissions by 12.5
per cent from 1990 levels and moving towards a 20 per cent reduction
in CO2 emissions by 2010.
Joint Target with DETR.
Source: The National Environmental Technology Centre
(NETCEN), part of the European Network of Environmental Research
Organisations (enero), on behalf of DETR. (Please see http://www.enero.dk/presentation/countries/netcen.htm)
NETCEN publishes an annual inventory of the UK's historic greenhouse
gas emissions. Data for CO2 emissions are available for each year
from 1990 to 1998. Data for non-CO2 emissions are available for
1995 and 1998. Disaggregated data for England, Scotland, Wales
and Northern Ireland are available for 1990, 1995 and 1998. In
the future, data will be available for each series on an annual
basis. Projections of greenhouse gas emissions to 2010 and to
2020 are produced regularly, although not necessarily every year.
Scope: Applies to UK.
Measured by: The baseline for the UK's greenhouse
gas emissions is 1990 although, as allowed by the Kyoto Protocol,
1995 is used for emissions of hydrofluorocarbons, perfluorocarbons
and sulphur hexafluoride.
Target Date: The UK published a draft climate change
programme—http://www.environment.detr.gov.uk/climatechange/draft/index.htm,
setting out how it proposes to deliver the 12.5 per cent target
and move towards the 20 per cent goal in March 2000. The final
programme was published on 17 November 2000. The programme will
be formally reviewed and evaluated in 2004.
Target 10.
Deliver a measurable improvement in the business performance
of Trade Partners UK customers.
Joint Target with FCO.
Details for this target will be set out in the British Trade
International Service Delivery Agreement (for details of this
please see: http://www.tradepartners.gov.uk/whoweare/servicedeliveryagreement/servicedeliveryagreement.shtml).
Target 11.
Maintain the UK as the prime location in the EU for foreign
direct investment.
Joint Target with FCO.
Details for this target will be set out in the British Trade
International Service Delivery Agreement (for details of this
please see: http://www.tradepartners.gov.uk/whoweare/servicedeliveryagreement/servicedeliveryagreeement.shtml).
Target 12.
Achieve value for money improvements of 1.5 per cent a year
across the Department as measured by a set of indicators.
Source: Annual monitoring by the Department's Finance
and Resource Management section.
Date: annual from 2001; target date 2004.
For full details of this target and the set of indicators
it is to be measured by, please refer to the DTI Service Delivery
Agreement (specifically section C.2. Value for Money. See: http://www.dti.gov.uk/about/spendingreview/sda6.htm_improving).
The target will be achieved through aggregate performance against
the set of indicators.
8
The comparative baseline productivity figures are: Back
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