Select Committee on Trade and Industry Third Report


50.   One of the main themes of the Industrial Society's evidence to the Committee was that German government support to industry was more effective than the UK's because it was controlled at regional level. The Society argued that this led all the actors — local government, educational institutions, planning authorities, local trade bodies, and so on — to co-operate to tackle an area's problems and to develop common policies to build on an area's strengths.[59] The Society suggested that in the UK there was insufficient co-ordination of effort at local level to develop real self-sustaining clusters or centres of excellence.

51.   The Government also seems to be concerned that there is insufficient effectively targeted action at a local level. The nine recently-established Regional Development Agencies (RDAs) in England have been given specific targets to increase productivity, enterprise and investment in their regions. Working within the central guidelines set down by the DTI, the RDAs have the autonomy to devise support strategies tailored to the needs of each region. Along with the Small Business Service, the RDAs will also work closely with the new Manufacturing Advisory Service (MAS). The MAS will set up Regional Centres for Manufacturing Excellence in England and Wales, which will serve as sources of advice and support to local manufacturers, and establish a network of Centres of Expertise in Manufacturing to encourage the adoption of best practice, innovative technologies and processes. The MAS also has the task of working closely with the Centres of Vocational Excellence and New Technology Institutes established by the Department for Education and Skills to identify skills and training requirements which are specific to their local manufacturing base.

52.   While many welcomed the Government's extra support for the manufacturing sector, not all of our witnesses shared the DTI's enthusiasm for the new regionally-focused approach. The EEF and EAMA, among others, were concerned that this approach could reduce the effectiveness of such centrally-driven sectoral initiatives as those within the Industry Forum programme, which have been one of the major elements of the Government's attempts to spread best manufacturing and technological practice and which need a national rather than a regional focus. For example, the Process Industries Centre for Manufacturing Excellence (PICME), co-funded by the DTI as part of its Industry Forum programme, has had considerable success in promoting increased process efficiency and productivity in that sector through the identification and promotion of best practice. It is not clear to PICME how duplication and competition for resources could be avoided between its centrally funded programme and the new regionally-based productivity teams which will also be competing with Industry Forum programmes for expert personnel.[60]

53.   The new structure will require RDAs and the MAS to work hard to ensure effective coordination between the many agencies involved in the delivery of support services to industry. This has been a weakness in the past. EAMA and others identified the difficulties that many companies, particularly SMEs, had in negotiating the complex network of agencies and support schemes. We were told that the time and internal resources required to access the relevant advice and support often proved a major deterrent for many small companies, which are often those in most need of such support. The current DTI review of sectoral support schemes should help to address this problem in that its objective is to streamline and simplify the support available to industry, and we await the outcome of the review with interest.

54.   The establishment of the RDAs and the definition of their responsibilities towards local industries are comparatively recent events and they will inevitably need a little time to develop. It is important, however, that the RDAs' local strategies for support for manufacturing are independently monitored and that their performance should be benchmarked against each other. In placing greater emphasis on a regionally based support system, the DTI has moved some way towards the system of support to industry developed in Germany, where advice and access to expertise and financial support is provided through Länder-based organisations.

55.   We intend to review the effectiveness of the Government's new approach later in this Parliament and it may be appropriate to compare the two systems in some detail during that inquiry. In the meantime, the many agencies concerned, and Central Government, will need to take steps to ensure that the implementation of national policy is effectively co-ordinated in each region, avoiding duplication of effort and competition between agencies, and making it easier to achieve the real target of all such schemes — easily accessed support to businesses to enable them to improve their performance and competitiveness.

59   Q 157 (Industrial Society) Back

60   Ev 221 Back

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