Supplementary memorandum submitted by
Department for Business, Innovation and Skills (UK Trade and Investment)
UKTI is grateful for the opportunity to provide
additional written evidence in reply to the transcript of this
session. This is set out below, together with references to the
transcript passage where appropriate.
Topics addressed:
— Tradeshow Access Programme;
— Disproportionate emphasis on BRIC
market;
— Transferring more resource to frontline
services;
— Allocation of additional £10
million Strategic Investment Fund budget;
— Increased delivery of UKTI services
by the private sector; and
— Overseas Market Introduction Service.
TRADESHOW ACCESS
PROGRAMME (TAP)
Q282 and elsewhere
Mr Josypenko said that more money should have
gone over the past year to direct support for exports (such as
TAP).
Reply: Budgets are reviewed internally within
UKTI during the year and in the case of TAP an additional £300k
was added to the 2009-10 budget of £8.2 million in September.
DISPROPORTIONATE
EMPHASIS ON
BRIC MARKETS
Q283
Mr Josypenko thought there was too much emphasis
on BRIC markets at the expense of established markets.
Reply: UKTI emphasises emerging markets because
they are the fastest growing economies and can provide opportunities
now, during the recession in the UK's traditional export markets,
and increasingly for UK business in the years to come. This does
not mean that we are neglecting more developed markets. The Tradeshow
Access Programme, UKTI's largest single support scheme, provides
grants for SMEs across a broad range of sectors and markets—the
leading locations for TAP events are Germany and the USA.
TRANSFERRING MORE
RESOURCE TO
FRONTLINE SERVICES
Q298
This is a general point about the balance between
programme and admin in UKTI. Some 90% of UKTI's staff are in the
front line overseas, in the English regions, or in customer-facing
service delivery in headquarters. Posts in headquarters offices
in London and Glasgow have reduced by some 40% since March 2004.
TRANSFERRING MORE
RESOURCE TO
FRONTLINE SERVICES
Q298
This is a general point about the balance between
programme and admin in UKTI. Some 90% of UKTI's staff is in the
front line overseas, in the English regions, or in customer-facing
service delivery in headquarters. Posts in headquarters offices
in London and Glasgow have reduced by some 40% since March 2004.
We do not recognise the £30 million figure
referred to.
Mr Josypenko is contrasting a figure for programme
spend (£30 million) which relates to his definition of direct
support (Trade Access Programme, Passports etc) against the total
resource consumed by UKTI (£323 million). UKTI's total budget
of £323 million is split between Trade Services £250
million and Foreign Direct Investment £73 million.
UKTI's Departmental Report and Resource Accounts
2008-09 (HC 482) show that direct support to business on trade
support amounted to £201 million (this figure excludes BIS
admin).
UKTI's support to business takes the form of
grants like TAP (circa £8 million) but overwhelmingly
takes the form of services provided by UKTI's posts overseas (circa
£142 million), direct support to Defence and Security (circa
£24 million) and regional direct support (circa £20
million), it also covers events for business such as inward and
outward missions.
ALLOCATION OF
£10 MILLION STRATEGIC
INVESTMENT FUND
BUDGET
Q324 et passim
Mr Josypenko said that the extra £10 million
UKTI received for the Strategic Investment Fund should have been
spread more widely, including extra resource for TAP. He also
said that UKTI had not consulted on the uses for this money.
Reply: The funding was intended to be supportive
of the New Industries, New Jobs (NINJ) White Paper and therefore
was focused from the start on certain sectors (advanced engineering,
creative industries, energy, low carbon, construction, ICT and
financial services). Ministers also wanted to see the budget directed
towards a small number of high impact events visible to business
and not spread across general export activity. These events would
be designed to leverage a multiplying effect from partners to
reach the widest possible audience and produce an early impact
with strong legacy which the private sector can run with. Some
of this NINJ-related funding will in fact be used at overseas
exhibitions, including MEDICA in Dusseldorf, which are also TAP
supported.
INCREASED DELIVERY
OF UKTI SERVICES
BY THE
PRIVATE SECTOR
Q301-309
UKTI undertakes a substantial amount of partnering
with the private sector. We value these partnerships as the private
sector provides a business perspective, credibility and innovation
in the way we do things.
In UKTI's English regional network we have a
private sector delivery partner in each of the nine regions which
employs more than 300 people in international trade teams (including
International Trade Advisers) who are deployed on UKTI work. While
UKTI offers a national suite of services, our advisers work with
businesses locally to develop a deep understanding of the diverse
range of business needs that exist across the English regions.
In four of the nine regions, the Chambers of
Commerce, or their representative bodies such as Chamberlink on
behalf of the 17 North West Chambers, are partners in the trade
delivery organisations. In the case of the West Midlands we should
also make clear that it is not "Birmingham taking the lead
across a big chunk of the West Midlands" but an equal partnership
of all the Chambers in the region covering the whole of the West
Midlands. In the remaining five regions we have other business
service organisations supporting UKTI's trade service delivery.
In each region UKTI seeks delivery partners
that have a capability to deliver for UKTI, can generate synergy
with other business support services and offer value for money.
The Chambers can also bid for that work. UKTI will select the
best value suppliers ie the best quality at the most competitive
price, to work with. That will often be companies limited by guarantee
(like Chambers) where profits benefit the members, or companies
limited by shares. UKTI ensures that our delivery arrangements
integrate with the economic strategy, business support services
and private sector activity in each region.
In all nine regions, UKTI will partner with
different Chambers, depending on their strengths, on a range of
other activities such as business networking events or overseas
trade missions. But as the BISCOMM evidence suggests, not all
Chambers have the same reach or international capability.
Any organisation is entitled to bid for UKTI's
regional delivery activity, including Trade Associations (TAs).
UKTI has contact with over 100 TAs in an effort to ensure full
regional, or full sectoral coverage, though this does prove a
challenge. However, UKTI's regional teams also partner with a
range of regional and national sector organisations, as with Chambers,
on a range of business events.
In addition to working with city/regional Chambers,
UKTI has a longstanding and beneficial relationship with the British
Chambers of Commerce (BCC). The BCC manage two UKTI services—the
Export Marketing Research Scheme and the Export Communications
Review—where private sector specialists are deployed to
provide advice to companies on market research and export communications.
The BCC, under cover of a memorandum of understanding
from UKTI (and its predecessor Departments), administers the issuing
of non-preferential Certificates of Origin. Certificates are issued
by Chambers authorised by the BCC. The Chambers have fulfilled
this role for very many years. Some 250,000 certificates are issued
each year, generating modest income for the Chamber network.
OVERSEAS MARKET
INTRODUCTION SERVICE
(OMIS)
Q310-314
There is no doubt at all that targets for UKTI
services have been driving up both quality and the additional
profit achieved by businesses, as well as resulting in many more
businesses receiving these services and benefits. This means less
focus on targets is certainly not in the interests of UKTI clients,
particularly those of OMIS.
In terms of inconsistency, these exist because
Posts tailor their response very much to customer requirements.
Also, conditions and business cultures vary from market to market
so that in some places it takes very much longer to achieve the
same result than in others. The amount of information easily available
can also vary considerably between markets, even neighbouring
ones. The view of what constitutes quality will also vary from
company to company and individual to individual. Where differences
or lack of customer focus cannot be justified, we are working
hard to minimise problems and spread best practice.
UKTI has for some years had a policy of charging
for most activities overseas where a private company or group
of companies stands to profit from the help it provides. This
is in keeping with the approach to charging for other government
services such as passports and driving licences. As some of the
participants mention, charging does deter non-serious enquiries.
(In the past companies were commissioning unpaid reports and contact
lists from a number of posts and then choosing one or not bothering
to use them at all.) It also shows us where the real interest
is and enables us to direct scarce resources accordingly. There
are exceptions to this and, for an official UKTI or devolved administration
mission, we would not normally charge for a briefing. We charge
for time in organising and participating in receptions IF they
are appropriate to the market and sector and IF the organiser
wants one, because a proper focussed reception requires the presence
of potential customers and intermediaries relevant to the missioners
business objectives. This entails a level of research and effort
in putting the right people together, equivalent to researching
contacts.
We are clear that UKTI posts are providing a
service that is not normally available from private sector providers
and UKTI does not seek to compete with the private sector. However,
as is pointed out by some participants, where a product is new
to the post, initial internet research may have to be done at
junior level.
18 November 2009
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