In a recent Commentary entitled ‘More UK Exports Please’ I warned of my concerns that there were those in Government and the Treasury that had a vested interest in making UKTI even smaller than it has already become. I reminded that Lord Maude, until a few weeks before the Minister charged with responsibility for UKTI, had somewhat surprisingly resigned and I suggested that “far too much of his time had been spent trying to further drive down costs in an already experience and skills depleted UKTI.
Of course, having previously been part of the Cabinet Office during most of the first Cameron led Coalition administration and with his colleague Oliver Letwin, challenged with the task of reducing government departmental costs wherever they could, it should not perhaps have come as that much of a shock that someone who might be seen as a poacher turned gamekeeper should be placed as a Minister in the Department of Business following the General Election of 2015.
To be fair to Lord Maude, the overall feeling within the department was that he did his best during his year in the job to understand the issues in hand and to stand up in support of what was best for the future of trade and industry. Hs was not a slash and burn strategy and indeed, in my March 3rd piece I also suggested that when Lord Maude was not attempting to bring order to a department in which there was clearly disorder that he was engaged in a great deal of firefighting to stop the organisation imploding altogether.
Such remarks received much interesting feedback and very little dissent. I then went on to question the strategy and approach of the current and still relatively new CEO of UKTI DR. Catherine Raines and of how the Business Select Committee has suggested in a recent report just how badly UKTI faired in the minds of those that had given evidence before it. In addition, I mentioned my concern as to what was occurring in UKTI DSO, a separate self-contained unit within overall UKTI responsibility since 2008 and that appeared to be further constrained through cuts in the ability to do its job properly of helping defence and security exports.
I went on to suggest [with apologies and no arrogance intended here] that “If I were in charge of UKTI and if the Government really was prepared to back and support UK exporters and that it was absolutely determined to do all that it could to reach the £1 trillion export target for goods and services by 2020 I would need to ensure that each industry and support service segment within UKTI had a team of at least 50 suitably qualified people working in support.
Finally in the context of this debate, I went on to suggest that I my preference would be to concentrate not just on the large industries but those that we are very good at even if some represented a small part of our overall exports.
In the eight weeks since I published that particular commentary much has occurred. I am not privy to all the detail but it is clear that questions have subsequently been asked of just what is going on within UKTI. And then, on Saturday April 9th, a story emerged in the press that confirmed almost everything that I had previously feared might be about to occur.
It seemed that Business Secretary Sajid Javid had, according to various articles, drawn up secret plans to sack up to 40% of UKTI staff despite many of these individuals apparently being locked in a battle to save the UK steel industry. Apparently, so the story goes, management consultancy firm McKinsey had in a leaked report suggested that 4,000 civil servants (1,526 of whom have already been earmarked) who were currently employed within UKTI could lose their jobs over a four year period in order to save money.
Sad to say that this story is not a figment of someone’s imagination – it is according to my informants exactly what was probably being intended. In the meantime we await with bated breath what happens next.
Two years ago the Adam Smith Institute suggested that UKTI was not delivering value for money. It suggested that the organisation was top heavy and that headquarters staff should be cut from 500 to 50 and that the organisation should be turned into a stand-alone executive agency, with UK regional staff integrated with Chambers of Commerce. The ASI suggested that putting the UK’s [potential] exporters and receivers of inward investment in charge because “it is not the role of civil servants and government officials to be picking winners and losers” was the way forward. Maybe but two years on while the cuts strategy appears to be in place the forward development strategy certainly does not.
I don’t particularly care whatever strategy emerges in terms of how government supports industry and commerce as long as there is something for small industry and commerce to hang its hat on and look too for support. If past history is anything to go by UKTI probably helped as many as 40,000 companies over the past year in some way or other. If true, that in itself is no mean feat on the budget that UKTI has. The organisation says that over 90% of its staff are in customer facing roles providing them with support and potential reach to international customers. Yes, I have no doubt that back office functions and engagement in creating statistical reports may need to be looked at and I can hardly doubt that there is room to improve overall efficiency.
In the meantime it appears that all sections of UKTI are potentially being targeted for cuts and that, not surprisingly, morale within the Department is extremely low. A personal view this may be but as far as I am concerned the current Business Secretary may now have lost further credibility within his organisation and that, following the initial ‘pithy’ handling of the Port Talbot steel issue, I am bound to wonder whether he is in the right government position.
IF, and it is a very big IF, the government really is serious about helping to better balance the economy between manufacturing and services, if it is really serious about raising exports, if it is really serious too about manufacturing more of what we consume here at home then we should be redoubling our efforts to strengthen rather than weaken UKTI.
To succeed requires employment by UKTI of specialists to help industry, those that know what they are talking about, can add value, that have targets set and that can be respected by the industry and service community for the various specialisms they have.
Whether or not we remain members of the European Community the point is that if we are to compete successfully in international markets we need to ensure that each and every part of our business community, be it large companies all the way through to small and medium sized enterprises have the guidance and help available from a revamped and strengthened UKTI and one that can be seen as a respected and well equipped government department that can give all of the more tools to do an even better job.
Of course, I fully realise the need for government to cut public sector costs and that some of the criticisms of UKTI are not unfounded. But as far as I am concerned our ability to succeed as a nation and our ability to strengthen our economy depends on our ability to win and do business internationally more successfully than we are currently doing. The German government not only provides incentives for their industries to succeed they provide an environment that encourages research and development investment and that provide other means of support to their respective industries. The French are hardly backward in coming forwards in support of their industries either.
Here’s to living in hope.
CHW (London – 20th April 2016)
Howard Wheeldon FRAeS
hwheeldon@wheeldonstrategic.com
Tel: 07710-779785