The IoD research paper, which includes the results of an NOP survey of IoD members, accuses the DTI of being ‘ambiguous’ in its purpose, partly because of its wide remit of responsibilities, but also because the department has suffered from an extraordinary level of political instability. There have been four different secretaries of state for trade and industry on the past five years alone, a situation that has led to frequent changes in the emphasis of policy.
The IoD points out that with 183 different programmes to help businesses, the sheer ‘plethora of schemes means that few of them gain any saliency’.
And it accuses the DTI of pursuing a contradictory agenda. ‘On the one hand, the department aims to promote a competitive and productive economy,’ it says. ‘On the other hand, it has increased the regulatory burden on business. The cost to business of the employment legislation alone introduced since 1997 amounts to £5bn per annum.’
And with a relatively small budget (approximately #5.1bn), the department’s ‘grandiose’ ambitions exceed its resources, according to the IoD. Consequently the DTI’s lack of knowledge and limited resources make the achievement of its goal of narrowing the productivity gap with the USA, Japan, Germany and France ‘problematic’. The survey of IoD members also reveals that:
- 65% of members were not aware of the changes being made to the DTI.
- Of those members who did realise that the DTI’s activities were being overhauled, only 12% thought that the resulting changes would have a positive effect on their business.
- 32% of those members who had contacted the DTI for advice (for example, about exporting, dealing with regulations, etc) considered that the advice was poor.
- 46% of members believed that the system of business support was suffering from institutional overload, with too many government funded organisations trying to help business.
IoD business policy executive Richard Wilson said that as part of the current review of the department by trade secretary Patricia Hewitt, the DTI should rationalise the system of business support and ‘champion’ enterprise in Whitehall and in the EU.
He added: ‘The DTI should endeavour to assist businesses to become more efficient where possible. It can do this by providing advice and information and by disseminating best business practice via the Business Link network and private sector bodies.’
Responding to the claims, a DTI spokesman said that from April next year, there would be a new, simplified business support regime in place with a tighter focus on productivity performance.