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Four Years After It Was Created, The Department For Trade Is Failing Small Businesses, MPs Say

The public accounts committee said a 'lack of robust metrics means it is not possible' to assess the trade department’s contribution to export performance (PA)

4 min read

The department for international trade has “not demonstrated measurable progress in tackling the big strategic challenges it faces” four years after its creation, a cross-party group of MPs has reported.

The Public Accounts Committee has accused it and UK Export Finance of not doing enough to identify developing businesses and said a “lack of strategic alignment…means that export opportunities may have been missed”. 

It also said a “lack of robust metrics means it is not possible” to assess the trade department’s contribution to export performance.

The results of its inquiry, published today, said the the two departments “have not developed sufficient understanding of the challenges smaller businesses face in exporting, such as applying for finance, and are not delivering the necessary support to help SMEs grow”.

Its report adds: “Out of an estimated 5.9 million UK businesses, DIT targets its bespoke support at just 230,000 potential exporters, which has been almost static for the last ten years, and UKEF directly supported only 199 businesses in 2019 - failing to meet its own target of 500.” 

Small firms are directed to digital services on a government website but “levels of satisfaction with the department’s digital services are low and use of these services is declining - registrations have dropped from 816 per month in 2018, to 450 per month in 2019”.

The committee has heard from the Federation of Small Businesses who said their members “are concerned about the varying quality of the department’s International Trade Advisors, opportunities for businesses to report trade barriers, and the financial support available for attending trade shows”. 

Tory MP Sir Geoffrey Clifton-Brown, the group’s deputy chair, said: "The department holds the keys to help the economy grow in the aftermath of the pandemic, but DIT and UKEF struggled to tackle the prevailing challenges when they were set up. 

“The committee identified a number of areas where the department could considerably improve its performance and ensure it is at the top of the international league of export advisors, particularly by designing a world-class digital offering.”

He added that DIT and UKEF, the government’s credit agency and a non-ministerial department which works alongside it, must “step up and take a nimbler, more knowledgeable, more active role at the centre of a transforming the economy”.

Asked by PoliticsHome whether the issues include the role of person at the top of the department, international secretary Liz Truss, Sir Geoffrey said: “We didn’t specifically examine that subject but the fact that we're wanting the department to have proper measurement metrics, so the department can demonstrate exactly what it's achieving to us, to Parliament and to the general population, I think tells you that we are looking at this department closely.

"Because it is critical for our recovery from Covid, because the only way you really grow an economy is to increase exports.”

Last night, the department attempted to promote its recent trade deal with Japan on social media.

 A government spokesperson said: “The conclusions of the report are not supported by the evidence. We have just struck a comprehensive deal with Japan that goes well beyond the EU, and over the past two years have signed or agreed in principle trade agreements with 51 countries, worth £144bn of UK trade in 2019. 

“Last year the UK overtook France to become the fifth largest exporter by value, and was the only top ten exporting nation to see an increase in exports.

“We are significantly enhancing our digital offer to businesses to help them compete and thrive in the modern global economy, and recently launched a new Export Growth Plan to help companies grow their trade overseas.

“Work to improve our offer will continue as part of the government’s ongoing support for exporters, and we are working closely with UK Export Finance as we develop our offer to small and green businesses."

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