Memorandum submitted by Department for
Business, Enterprise & Regulatory Reform
FOLLOW-UP TO BERR SELECT COMMITTEE HEARING
20 NOVEMBER 2007
Further to my appearance at the Select Committee
hearing on 20 November, I agreed to provide the Committee with
further information on the contact between BERR and companies
in the automotive supply chain, clarification of the position
regarding the Companies House CHIPS IT system and an update on
the current position of the MG Rover investigation, including
the cost of the investigation to date. In addition, I would like
to clarify the position on the Business Support Programme and
confirm our intention to publish our Value for Money Delivery
Plan in the New Year.
THE AUTOMOTIVE
SUPPLY CHAIN
The Department fully appreciates the importance
of maintaining a vibrant automotive supply chain in the UK. Despite
recent challenges, the automotive supply chain remains substantial—over
2,600 companies are directly engaged in the automotive component
sector, contributing £4.5 billion to the UK economy and employing
115,000 people.
The Department's contacts with the automotive
supply chain are wide-ranging and varied BERR's Automotive Unit
actively manages relationships with a number of key companies
in the supply chain, just as it does with the major vehicle manufacturers.
Relationship Managers within BERR maintain regular contact with
the companies concerned and work with them on specific issues
where collaboration can enhance the competitiveness of UK operations.
The RDAs and Devolved Administrations engage regularly on a similar
basis with a far wider range of automotive supply chain businesses.
The Department also seeks to support the competitiveness of the
automotive supply chain more widely Automotive supply chain companies
with operations in assisted areas have benefited directly from
grants to support investment totalling £40 million since
2000 and have also benefited indirectly from the further £110
million awarded to support investment by the major vehicle manufacturers
over the same period.
The supply chain has also been the target of
a number of cross-sector initiatives BERR's Supply Chain Groups
Programme, set up in 2004, has sought to support improvement in
performance right down the supply chain. Where a host company,
in partnership with at least eight suppliers, is seeking to identify
business improvements both within those companies and in the way
they work together, Government will provide 50% of the cash costs.
Sixty-four groups have been supported, several of them hosted
by Jaguar and Land Rover suppliers, with total Government funding
from BERR and the RDAs amounting to some £5.5 million. More
widely, the supply chain continues to be a principal focus of
the work of SMMT Industry Forum. The RDAs and devolved administrations
also support a number of programmes of benefit to the automotive
supply chain.
The automotive supply chain has also been a
recipient of Government support for innovation. Automotive suppliers
have participated in the Technology Programme since its inception
in 2004, with a significant number of supported projects being
of relevance to the automotive sector. Supply chain companies
are also prominent amongst the consortia who have submitted applications
in response to the first call for proposals under the new Innovation
Platform for Low Carbon Vehicles which was launched by the Technology
Strategy Board in September with initial funding of £30 million.
On a regional level, Advantage West Midlands has supported the
Premium Automotive Research and Development Programme (PARD),
which has delivered a range of support for the supply chain in
the region, with Jaguar and Land Rover suppliers being prominent
amongst its beneficiaries.
COMPANIES HOUSE
CHIPS IT SYSTEM
CHIPS is a replacement IT system for Companies
House which will hold the UK Company Register. The existing system
platform is now 20 years old. CHIPS was due to be in place by
October 2007 but is now expected to be implemented during the
first quarter of 2008. The implementation of CHIPS is a necessary
prerequisite for Companies House to support the changes required
under the Companies Act (CA) 2006.
The Registrar advised in November that he could
not be absolutely confident of achieving the original timetable
of October 2008 for full implementation of the CA 2006. This was
due in part to the CHIPS system not being ready and in part to
the significant and complex changes needed to Companies House
processes and systems to support the CA 2008.
The Government announced a revised date of October
2009 in light of the need to give certainty to companies regarding
the timing for forthcoming changes.
Progress continues or CHIPS implementation and
development of changes to the system to give effect to the CA
2006. A recent two day operational test of CHIPS has proved successful
and Companies House has advised that they are confident that they
can meet this revised timetable.
Independent assurance has been sought in respect
of the readiness of the CHIPS system to `go live' and the robustness
of Companies House plans to deliver the subsequent changes to
its processes and systems. At the current time this assurance
has not identified any issues that would prevent the revised October
2009 timetable being achieved. This, however, remains a combined
programme of significant change with consequent levels of risk,
all of which are being robustly managed by Companies House.
MG ROVER INVESTIGATION
The investigation into MG Rover is ongoing.
The inspectors, who are independent of BERR, are seeking to complete
the report as quickly as possible, with due regard to the fairness
of the process and the thoroughness of the task. It would not
otherwise be appropriate to comment on the details of a current
investigation or to speculate on when it might be completed, though
I can assure the Committee that the investigation is being carried
out as expeditious as possible.
I can also give the Committee an updated figure
of the costs of the inspection to BERR. As at 30 November 2007
the total cost of the investigation was £10,638,091, broken
down as £8,886,114 plus VAT of £1,629,545 and disbursements
of £425,569. These costs are essentially the time costs of
the legal inspectors and the accounting inspector, plus his team.
BUSINESS SUPPORT
SIMPLIFICATION PROGRAMME
In light of the discussion on this at the Committee
hearing, I would like to confirm that the new portfolio of Business
Support products will begin to be phased in from March 2008. As
announced in the 2006 Budget, Government's commitment is to reduce
the number of publicly-funded business support schemes to less
than 100 by 2010.
VALUE FOR
MONEY
I will be writing to you in the New Year enclosing
BERR's Value for Money Delivery Agreement. This will provide details
of the value for money savings the Department will be making over
the Comprehensive Spending Review period.
December 2007
| 
