UK export strategy hindered by data gaps

Written by Beckie Smith on 17 July 2020 in News
News

NAO report finds that Department for International Trade also needs to improve digital services

Credit: Greg Plominski from Pixabay

Missing data, patchy knowledge of new industries and questionable targets are holding back the Department of International Trade and UK Export Finance’s efforts to boost outbound trade by UK businesses, the National Audit Office said.

In a report today, the public spending watchdog found DIT and UKEF had made a “good start” in developing a strategy and arrangements to support UK businesses trading overseas. DIT had taken over trade functions from its predecessor departments and from the EU, and UKEF has expanded the export finance it offers to businesses while staying within Treasury limits, the NAO said.

But the watchdog said the two bodies faced “significant challenges” in boosting exports long term – among them, missing data on exporters and an underdeveloped understanding of some emerging sectors such as renewable energy.

The report found DIT had exceeded by more than £4bn its £20.91bn internal “exports wins” target for the value of exports it supports.


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And it was not clear whether DIT had focused its efforts and resources “in the regions and sectors where there are the greatest opportunities to support UK businesses”, the report said.

The report identified a gap in the data held by DIT on UK exporters. “It needs good data to identify which of the 5.9 million UK businesses already export or have the potential to do so,” the report said.

But while it had “good information” on some well-established industries, such as aerospace, the NAO said the department “could improve” its data on emerging sectors like renewable energy.

The department is “making early progress” on addressing that data gap, and expects the forthcoming trade bill to support data sharing between DIT and HM Revenue and Customs to help it identify UK exporters.

DIT’s digital services were also in need of improvement, the report said.

“To make the best use of its resources, DIT plans to target its bespoke support at larger businesses and to direct smaller businesses to its digital services. However, a recent DIT survey of its clients suggests that some services on its website are not meeting the needs of some UK businesses,” it said.

DIT is developing more specific guidance and an evaluation strategy to enable it to better understand the costs of its digital services, how well they meet users’ needs and where the gaps are, the report added.

The report said the department needed to do more to assess the impact of some of the longer-term support it provides.

While DIT had improved the way it measured its own performance, there was more to be done, the NAO said.

For example, while the “export win” target incentivised staff, its usefulness had “limitations”, according to the report.

And it said it was not clear how direct the link was between the framework DIT had developed to measure its own performance, and the government’s goal to increase exports from 30% to 35% of GDP.

In fact, the watchdog said it “[questioned] the value” of the goal, which was central to the government’s 2018 export strategy.

It said it was “difficult to hold DIT accountable” for its progress against the goal because the report did not set a timeframe to meet the goal – and because of other factors affecting export growth, some of which were outside the government’s control.

NAO head Gareth Davies said: “DIT has made a good start in developing a strategy and the arrangements it needs to support export growth, and UKEF has expanded its offer of export finance to support UK businesses. Continued progress is needed for both DIT and UKEF to strengthen their approach and address the significant challenges that UK trade exports will face.  

“To increase exports and boost UK productivity and growth, DIT and UKEF must work closely together and across government to ensure efforts and resources are focused in the regions and sectors where there are the greatest opportunities to support UK businesses.”

A DIT spokesperson said: “We will continue to support UK businesses across a range of sectors to export to all parts of the world, by focusing on securing longer-term opportunities as well as working hard to boost trade and investment in the short-term.

“We will do whatever it takes to ensure businesses can access the right tools, finance and in-market expertise to succeed on the global stage.”

 

About the author

Beckie Smith is a reporter for PublicTechnology sister publication Civil Service World, where this story first appeared. She tweets as @beckie__smith.

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