7 ADMINISTRATION OF THE LICENSING
SYSTEM
176. The export licensing system is necessary in
order to ensure that strategic exports do not reach undesirable
end users. In most cases, the system seems to have produced the
right decisions. As mentioned above, we have discovered what we
consider to be occasional failures by officials to carry out basic
checks. More importantly, we have identified shortcomings in the
Government's information systems.
177. The licensing system also has a significant
regulatory impact on industry. This cannot be avoided, but every
effort should be made to ensure that the system imposes no unnecessary
or excessive burdens.
178. Each Government Department involved in the licensing
process, the DTI, the FCO, the Ministry of Defence and the Department
for International Development had a target in 2001 of 10 working
days for processing licence applications.[205]
The DTI met this target in 80 per cent of cases in 2001, a slight
improvement on the previous year. However, the performance against
this target of the other three Departments deteriorated in 2001
as against the previous year, with each meeting the target in
only about 50 per cent of cases.[206]
For the consideration of appeals, while all the cases considered
only by the DTI were processed within the 15 working day target,
none of the cases circulated to other Government Departments were
completed to schedule. When we asked the Government why service
had deteriorated, it was explained to us that:
service is not always reflected by the headline
performance target ... Because of the way performance is measured,
clearance of long standing cases (which entails factoring into
the performance statistics of the longer processing times for
these cases at the time they are finalised) has the effect of
reducing the overall performance figure, even if performance on
other applications is as good or better than for previous accounting
periods. Thus, the greater the number of long standing cases finalised
in a given period, the worse the overall performance figure is
likely to be. Similarly the target does not take account of fluctuations
in the volume of applications received.[207]
179. If improvement in service can make the headline
performance figure look worse, then the obvious conclusion is
that the performance targets are not working as they should. We
are pleased that this is also the conclusion that the Government
seems to have reached. As the Secretary of State for Trade and
Industry told us:
In the past our performance has not been as good
as it should be. What we have done, not just within my Department,
but the Foreign Office and MoD as well, is to look over the last
year at how we can make the whole process more efficient. Inevitably
there is a lot of to-ing and fro-ing between different government
departments and the Foreign Office and posts abroad, and that
is where a lot of the delays come from. We looked at how we can
make it more efficient and we have also made a huge effort to
deal with the backlog of cases that had arisen. We used to have
104 cases that were over 12 months old, which, not surprisingly,
gave rise to a great deal of frustration and anger in industry.
We now have no cases over 12 months old, and we are working to
get it down to deal with the ones that are between 6 and 12 months
old now. I would be very concerned, indeed, if we found ourselves
back in that situation with a lot of backlogs of applications.
By going through this very careful process of working with industry
to understand how we enforce this in the simplest possible way
and concentrate our efforts on where there are real problems and
on the minority of people who are deliberately flouting the law,
seeking to do things we do not want them to do, then we can prepare
our own system and resources and make sure that we do not end
up with that backlog building up again.[208]
180. We understand that a Government-wide review
of the licensing process is currently taking place and that it
is expected to report later this year.[209]
We look forward to seeing the results of this review.
181. It seems odd timing to conduct a major review
of the licensing system just before it is overhauled by statute.
New controls will shortly be introduced under the Export Control
Act 2002. We are considering these separately.[210]
The administration of these new controls will be a significant
extra burden on the machinery of Government. We conclude that
the introduction of new controls under the Export Control Act
will be a major test of the efficiency of the licensing regime—a
test that the Government must not fail if it is to maintain the
confidence of industry.
205 Licences circulated to other Government departments
were therefore subject to a target of 20 working days in total. Back
206
2001 Annual Report, pp 365-366 Back
207
Ev 33 Back
208
HC (2002-2003) 620, Ev 29, Q 166 Back
209
HC (2002-2003) 620, Ev 29, Q 166-167 Back
210
HC (2002-2003) 620 Back
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