Select Committee on Trade and Industry Written Evidence


APPENDIX 9

Supplementary memorandum by the Department of Trade and Industry

INTRODUCTION

  1.  This paper provides a summary of the Government spend on implementing the 1998 White Paper, Our Competitive Future: Building the Knowledge Driven Economy. The total cost given here does not include administrative expenditure, but covers the new areas of programme spend to which the Government committed itself.

  2.  The Government has spent some £1,635.4 million (including a forecast spend of £501.2 million for 2003-04) in implementing and funding the commitments in the 1998 Knowledge Driven Economy White Paper. The aim is to encourage increased innovation, through the effective exploitation of technology and knowledge for the benefit of the UK economy. The DTI's expenditure is reported annually through the DTI Departmental Reports.

  3.  The new areas of programme spend identified in the White Paper and the details of the total amounts spent on the programmes are as follows and listed in the attached table in Annex 1.

ENTERPRISE

  4.  The Government, in partnership with the private sector, committed to supporting an Enterprise Fund worth some £150 million over three years (A1)[7]. The aim is to stimulate the pace at which businesses turn new ideas into high-growth ventures. The Department has spent a total of £290 million (including a forecast spend of £98.1 million for 2003-04) on this commitment between 1999 and 2004.

ENTREPRENEURIAL SKILLS

  5.  The Government made funds available to Business Links to support innovative high growth start-ups (A3). A total of £7.8 million was spent on High Growth Start-ups between 1999 and 2002. The Government is also committed to addressing the deficiencies in entrepreneurial skills through business advice services. These are provided through business link partnerships.

KNOWLEDGE BASE

  6.  The Government is committed to increasing science spending to boost knowledge creation (A10). The total spend between 1999 and 2004 of £292.6 million (including a forecast spend of £50.1 million for 2003-04) by the Department covers both the Joint Infrastructure Fund (£273.2 million including a forecast spend of £44 million) and University Challenge (£19.4 million including a forecast spend of £6.1 million).

  7.  The DTI spent a total of £41.5 million (including a forecast spend of £5.3 million for 2003-04) between 1999 and 2004 on the Science Enterprise Challenge (A13) to help create enterprise centres in universities. The centres help equip scientists and engineers with entrepreneurship and business skills to develop the transfer and exploitation of knowledge.

SKILLS STRATEGY

  8.  The Government Skills Strategy was published in July 2003. The Department's programme spends on skills sectors (D5) between 2001 and 2004 amounts to some £4.9 million (including a forecast spend of £1.3 million for 2003-04). Because skills are vital to sustaining a competitive, productive economy, the new Skills Strategy will put business skills needs first, vital in improving the business skills gap.

KNOWLEDGE TRANSFER

  9.  To enable the UK to remain at the cutting edge of innovation, the government recognises that we must continue to exploit our knowledge base in Science, Engineering, and Technology (A12). A total of £52 million (including a forecast spend of £24.4 million for 2003-04) was spent between 2001 and 2004 to promote university interaction with business and to promote enterprise capability in universities. This spending also funded the knowledge transfer infrastructure—networks between universities, businesses and other user communities for the outputs of research.

  10.  To build on the initial work of the Engineering and Physical Sciences Research Council, the Government established a national network of Faraday Partnership to bring together innovating businesses with scientists and engineers to share ideas and commercialise research (A14). A total of £21.8 million (including a forecast spend of £8 million for 2003-04) was spent on Faraday Partnership between 2001 and 2004.

  11.  To ensure more businesses get the benefits of skilled graduates and that graduates get experience from business, the Department increased the spend on Knowledge Transfer Partnerships (KTP), formerly the Teaching Company Assistant (TCS) (A15). The DTI's spend on KTP was £72.4 million between 1999 and 2004 (including a forecast spend of £19 million for 2003-04). The Department's expenditure on KTP is not the full cost to the Government; the Department also incur admin costs in promoting and managing the product and with other sponsors contributes to the training and expenses of the Associates.

  12.  To ensure that the UK does not lose its lead in Europe in the commercial exploitation of biotechnology and genome research (B20), the department spent some £0.2 million in 2002-03 on Bio-wise, successor to Biotechnology Means Business. Biowise raised a wide-scale awareness of the potential of biotechnology and helped to focus on the implementation of biotechnology in industry.

RESEARCH AND DEVELOPMENT

  13.  Building on the success of Foresight programme, aimed at building bridges and promoting high quality research partnerships between universities (the science and engineering base), businesses, (particularly small businesses) and Government (A17). The Department spent some £0.1 million between 2002 and 2003 on Foresight LINK Awards, the funds were allocated on the advice of a high level panel chaired by the then Chief Scientific Adviser, Sir Robert May to high quality LINK Projects such as the Mobile Phones & Health project.

  14.  To help small businesses finance the development of their own technology and benefit from scientific knowledge bases, the SMART Scheme was extended (A18). The Government has spent some £149.6 million between 1999 and 2004 (including a forecast spend of £40 million for 2003-04) on the extended SMART scheme to help businesses commission research, secure intellectual property rights and develop prototypes.

  15.  To make the most of the commercial potential of outputs from Public Sector Research Establishments (PSRE), the Government investigated existing practice and made recommendations in 1999 (A20). The total spend by the Department since the Investigation team reported to HMT and the Office of Science and Technology is £8.1 million from 2001 to 2004 (including a forecast spend of £0.3 million for 2003-04).

BEST PRACTICE IN BUSINESSES

  16.  To spread the culture of benchmarking and encourage adoption of best practices by UK businesses throughout the UK, the Department supported the CBI's Fit for the Future Campaign (B1). The total DTI spend on Fit for the Future Campaign amounted to some £3.2 million between 2001 and 2004 (including a forecast spend of £0.7 million for 2003-04).

  17.  To encourage sectors to learn from the best examples, the Government has supported sectoral partnerships, including supply chain initiatives, networking and clusters that play a critical role in sharing knowledge and upgrading skills among complimentary businesses (B3). The DTI spent some £3 million between 2001 and 2003 in support of sectors, adapting the SMMT Industry forum model, which, helped businesses in the automotive supply chains.

  18.  To accelerate the spread of best practice and innovation throughout industry, work was done to review the speed of Technical Standards setting. Standards would help to open global opportunities for UK businesses (C10). There was no significant DTI spend associated with this commitment because the lion's share of implementation costs fall to the British Standard Institution. The work of the National Standardisation Strategic Framework (NSSF) goes wider than the commitment as expressed in the White Paper and there has been very modest programme spend by DTI in some specific related areas of NSSF work.

UK SMALL BUSINESS—DIGITAL MARKET

  19.  The Department has spent £13 million to help triple the number of UK Small Businesses wired up to the digital market place (D3). The Department encouraged businesses to wire up to the digital market by developing and launching ecommerce resource centres and sponsoring the Digital Business Awards.

REGIONAL DEVELOPMENT AGENCIES

  20.  The Department provided additional funds for the Regional Development Agencies (RDAs) to spend on priorities they identified for increasing competitiveness and regional growth performance (B5). The Department provided extra funding of £447 million (£191 million of which is the forecast spend for 2003-04) for the RDAs as part of the Single Programme Budget (SPB). Other Departments such as ODPM, DFES, DEFRA, DCMS and UKTI also contribute to the SPB. An example of the priorities identified was Regional Broadband readiness, for which DTI provided resources.

REGULATION

  21.  The DTI did not incur any programme spend on enforcement of the 1998 Competition Act, as the Office of Fair Trading (OFT) receives funding for this directly from the Treasury. However, the Government has committed £15 million to ensure that the sector regulators have stronger powers to enforce the Act, including imposing penalties on businesses turnovers (C1).

CONSUMER STRATEGY

  22.  The White Paper "Modern Markets: Confident Consumers" (Cm 4410) published in July 1999 met the Government's commitment to publish a Consumer Strategy (C9). The Government made £30 million available over four years to support the White Paper objectives of confident, demanding consumers who promote innovation and stimulating the productivity of the economy.

THE OFFICE OF THE E -ENVOY

  23.  The Government has spent £69.17 million (including a forecast spend for 2003-04 of £17.8 million) between 2000 and 2004 in setting up the Office of the e-Envoy and running it to help promote the UK as a global hub and to drive forward the Government agenda for e-Commerce (D2). In addition the e-Envoy, Special Representative for the Digital Economy, has also spent some £15.3 million (including a forecast spend for 2003-04 of £3.2 million) as programme costs of projects in several Government Departments.

E-GOVERNMENT

  24.  The Government has spent some £143.7 million (including a forecast spend of £42 million) between 2000 and 2004 to ensure that Government services are accessible electronically on Government Gateways, Citizen Portals and Knowledge Networks (E4).

Department of Trade and Industry

16 September 2004



7   Highlighted reference numbers are as in (Ref) in the Table and White Paper Implementation Plan. Back


 
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