Appendix 14: Letter to the
Chairman from the Secretary of State for Trade and Industry
EXPORT CONTROL
ORGANISATION
Thank you for your letter of 3 February about
efficiency savings in the Export Control Organisation (ECO).
You asked how many jobs are to be cut and the
breakdown between functions. In the financial year 2003-04, ECO
had on average approximately 166 staff. ECO's contribution to
the DTI's headcount reduction programme is to reduce to 136 by
31 March 2005 and to 109 by 31 March 2006. At 1 February ECO had
140 staff. ECO's functions include export control policy (UK legislation
and input into EU and international export control regimes, bilateral
relations, Parliamentary work); export licensing units consisting
of licensing and ratings casework officers, technical officers
and officers concerned with the application of intelligence to
licence applications and ratings; industry outreach and compliance
officers; an IT and data support team, and a continuous improvement
projects team. Staff reductions have been made in all these areas
except the compliance team.
You were concerned about the impact of these
reductions. Industry recognised in its recent evidence to your
Committee that the service provided recently by ECO has been better
than ever, despite the additional burdens associated with the
implementation of the Export Control Act and the fact that staff
numbers have been declining since last May. This perception is
borne out by the performance figures for 2004 which show that
the Government overall processed 78% of SIEL applications within
20 days (and 98% within 60 days). This builds on the 76% performance
in 2003. HMG has therefore been exceeding its key performance
target of processing 70% of SIEL licence applications in 20 days,
and the aim will be to continue to meet that performance indicator
despite the pressures in ECO. It is important to keep in mind
that the more cohesive relationship between DTI and the advisory
Departments (FCO, MOD and DFID) should help to sustain adequate
service levels, which is not solely a function of DTI's performance.
Furthermore, performance depends on the volume of licence applications,
not just the number of staff. The volume appears to be steady,
though it is too soon to draw conclusions about the overall trend
in applications under the new legislation.
The Jewel process has brought about process
efficiencies which have enabled ECO to function efficiently with
a lower level of staff—as mentioned above, some 26 posts
have already been lost over the last six months. ECO has also
put in place a continuous improvement strategy, post Jewel, which
aims to reduce caseload wherever possible (eg by encouraging exporters
to use open licences whenever these are available), streamline
processes (eg building on the SFE, refining the appeals process),
increase exporter awareness to produce better quality applications,
and improve the competence of staff (through better training,
multi-skilling and better knowledge management). This will bring
about further efficiencies. We have also improved the transparency
of the system by moving to quarterly publication of the Annual
Report data, together with information on refusal rates by destination
and processing times by destination.
You asked whether ECO's programme of advice
and support to industry is to be curtailed. I agree with you that
activities in this area over the last year have been successful.
ECO has put all its seminars onto a regional footing, and also
graded them into "beginners", "intermediate"
and "advanced" sessions so as to target better the audience.
ECO has also produced a DVD for exporters and is developing software
tools to help companies identify controlled goods and set up internal
compliance programmes, including an Open General Licence selection
tool. ECO has reviewed the pattern of compliance visits to ensure
the most efficient deployment of resources but there are no cuts
planned at present in that area.
I believe therefore that measures are in place
to help maintain the levels of service to exporters. The reduction
in staff is however a steep one, over a relatively short period
of time. I am therefore considering whether there may be further
steps we can take. I want to consider the scope for involving
private sector partners, for example in processing licence applications,
in delivering the IT investment which the Jewel project identified
as important to future delivery, and in carrying out awareness
and compliance activities. I am not in a position at this stage
to reach conclusions about future options but will keep you closely
informed.
Patricia Hewitt
February 2005
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