Rebalancing the Economy: Trade and Investment - Business, Innovation and Skills Committee Contents


7  UKTI Effectiveness and Efficiency

Introduction

177. The memoranda we received on UKTI performance has been mixed but the headline is one of achievement. When it works well, it appears to work very well. For example, the UKTI recently won the Excellence in Export Development Initiatives' Award for the Best Trade Promotion Organisation from a Developed Country at the 8th World Conference of Trade Promotion Organisations in Mexico City.[213] In a similar vein, UKTI also won the award for the best Pavilion at the Shanghai Expo.[214]

178. While these examples are to UKTI's credit, it faces a challenging period ahead, in which it will need to continue to improve its performance in the context of reduced resources.

179. UKTI asserted that efficiency savings have constantly been sought and claimed that over the last three years it cut the average cost of assisting business by 25% from around £14k to around £10.5k. It also told us that over this same period, the satisfaction of its trade customers had remained steady, and the number of businesses who had recorded improved performance as a result of working with UKTI had increased. UKTI argued that together this demonstrated that it was becoming more efficient and effective while maintaining the standard of service to its trade customers.[215]

PIMS

180. UKTI performance is now measured by the PIMS system (Performance and Impact Monitoring Survey). PIMS measures the impact of UKTI trade services on the companies using them, and UKTI's performance in delivering those services. The surveys are carried out by an independent market research company and comprise quarterly telephone surveys of a statistically representative group of users of UKTI services.[216] UKTI told us that the survey questions cover both qualitative and quantitative business benefits; financial benefits; access to information and contacts not otherwise available; improvements to overseas marketing strategy; and their assessment of the quality of, and overall satisfaction with, UKTI services.[217]

181. Approximately 4,000 businesses are interviewed each year. An annual survey of UK exporters who have not used UKTI services is also carried out, as an additional way of assessing the difference UKTI's services can make to companies.

182. The PIMS survey covering 2009-10 showed that UKTI helped some 23,600 UK businesses and concluded that British companies attributed an additional £5bn to their bottom line profits as a result of working with UKTI, up from £3.6bn the previous year.[218] The £5bn additional profit reported by UKTI clients represents over £35bn additional UK exports generated as a direct result of the support UKTI provided.[219]

183. According to UKTI analysis this represents a £19 benefit to the UK for each £1 of Government spend on UKTI trade services. The UKTI strategy announced that this had been increased to £22 for each £1 in the last 12 months.[220]

184. Data from the survey also found that:

  • 41% of companies reported new or safeguarded jobs as a result of using UKTI trade services.
  • 67% of UKTI customers reported significant business benefit from upgrading their approach to overseas markets, gaining access to contacts and information not otherwise accessible, and overcoming legal or regulatory difficulties or cultural differences affecting access to opportunities overseas.
  • 39% of UKTI clients expect substantial growth over the next five years compared with 23% of other UK exporters. Some 87% of UKTI trade clients expect at least moderate growth, compared with 78% non-user exporters.
  • On average, UKTI trade support generates an additional £65k of research and development (R&D) per trade client. This reflects the role trade support can play in increasing the UK's overall innovation capability and R&D.
  • Some 53% of all businesses assisted through UKTI trade services improved their business performance as a direct result of UKTI support.
  • Around 70% of businesses assisted reported improved productivity and competitiveness.
  • Users of UKTI services are much more likely than non users to be in high growth markets (61% vs. 44% for non users); are more likely to plan to increase exports in response to the depreciation of Sterling (47% vs. 37%); and are more likely to have benefited from the depreciation overall (33% vs. 25%).[221]

185. The PIMS system was subject to scrutiny as part of the National Audit Office 2009 value-for-money report on UKTI's Trade Support in 2009.[222] The NAO found that:

    UK Trade & Investment is making good progress against its targets and has in place a robust system (PIMS) of assessing delivery.[223]

It also noted that "UK Trade & Investment has put in place extensive arrangements to obtain regular and systematic feedback on the quality of its services".[224]

186. In addition, as part of its annual work on reviewing the appropriateness of departmental performance measurement systems, the National Audit Office concluded that the UKTI performance measurement system (PIMS) merited the NAO's highest assessment.[225]

187. We welcome the positive assessment of UKTI's trade services work as set out in its PIMS performance measurement system. The fact that the PIMS system is highly rated by the National Audit Office gives greater credibility to the PIMS results. While we cannot confirm the accuracy of the claim that UKTI generates £22 benefit for each £1 of Government spend on UKTI trade services, it is clear that UKTI does provide a service valuable to UK companies.

188. Reductions in its budget and resources will put additional pressure on UKTI in maintaining its current performance levels. While we recognise that UKTI will have to do more with less, we believe that the Government should keep a close eye on PIMS data. Any significant reduction in the satisfaction levels of companies with UKTI's services will have to be addressed at the earliest opportunity.

Inward Investment

189. Unlike its export activities, the efficiency and productivity of its inward investment services are not measured by an independent organisation. UKTI undertakes analysis of the effectiveness of its inward investment network, providing an assessment of its performance. Its latest figures stated that:

  • Nearly half—758 of the 1,619 inward investment projects landed by the UK in 2009-10—were assisted by UKTI.[226]
  • Of these, nearly 80% agreed that UKTI (or its RDA delivery partners) had a significant, favourable influence on the decision to locate or expand in the UK, or on the scale or scope of the project.[227]

190. UTKI explained that an assessment that it had assisted in the decision made by a company was arrived at by satisfying a set of criteria, populated by data from investing companies and agreed with UKTI's partners in the English Regions and the Devolved Administrations. Other data analysing the decision to invest, made by companies assisted by UKTI, is taken from PIMS' inward investment survey, October 2010.[228]

191. The contracting out of the delivery of inward investment services will make it more difficult to assess the performance of UKTI in this area. However, that does not mean that it is any less necessary. The PIMS system of monitoring export support should be assessed as a possible vehicle for the monitoring of all inward investment services.

AWARENESS OF UKTI

192. While UKTI's performance monitoring has concluded that it provides a good service, surveys conducted by business organisations indicate that the UKTI still has a lot of work to do. Andrew Cave from the FSB said he found it "staggering how few businesses are aware of what UKTI can do for them".[229] A recent FSB survey of its members found that while 45% of its members had used a high street bank for business support and 44% had used Business Link, only 6% had used UKTI services.[230] The Government recognised itself in the Plan for Growth that:

    Small and medium sized enterprises, in particular, say that they have difficulties in obtaining support, advice and the required financing needed for accessing overseas markets.[231]

193. UKTI said that it had made considerable efforts to raise awareness of services through its website and through appropriate marketing activities, and through organisations such as Chambers of Commerce and trade associations, links with banks and through press articles.[232] It further highlighted a variety of outreach events based on regions, markets and sectors which were designed to enable companies to meet UKTI staff based in the UK and overseas, who could provide them with more detailed help.[233]

194. On a more positive note Alexander Ehmann from the IoD told us that when its membership was asked about their preferable mode of trade advice the responses demonstrated that:

    UKTI was the preferable mode of advice for 27% of our overall membership. We were second, as the IoD, at 9% and then the Chambers at 7%.[234]

195. We are concerned that although companies that use the services of the UKTI value them, only 6% of SMEs in the FSB have accessed UKTI services. We recognise that the UKTI is trying to reach out to these SMEs but we believe that more proactive work can and should be done. This needs to be addressed if the Government is to fulfil its growth aim of getting more SMEs exporting.


213   UK Trade & Investment, Britain open for business, May 2011, p 9. The Trade Promotion Network is hosted and managed by the International Trade Centre, a joint agency of the United Nations and the World Trade Organisation. Back

214   UK Trade & Investment, Britain open for business, May 2011, p 64. Q 163 Back

215   Ev 134 Back

216   Ev 142 Back

217   Ev 142 Back

218   Ev 142 Back

219   Ev 142 Back

220   UK Trade & Investment, Britain open for business, May 2011, p 6 Back

221   Ev 143 Back

222   Ev 143 Back

223   Ev 146 Back

224   Ev 146 Back

225   Ev 146 Back

226   Ev 143 Back

227   Ev 143 Back

228   Ev 143 Back

229   Q 105 Back

230   Ev 179 Back

231   HM Treasury and Department for Business, Innovation and Skills, Plan for Growth, March 201, p 57 Back

232   Ev 147 Back

233   Ev 147 Back

234   Q 107 Back


 
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Prepared 11 July 2011