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Supporting UK exporters overseas

The National Audit Office has underlined the need for a substantial contribution by the Foreign and Commonwealth Office and UK Trade and Investment if the Government’s target for increasing the value of UK exports to an annual £1 trillion is to be achieved.

Since 2010, the Government has been increasingly committed to supporting UK exporters abroad and, in the 2012 Budget, announced its ‘ambition’ to double the value of exports by 2020 to £1 trillion a year. However, according to today’s report by the spending watchdog, current performance has been flat over the last two years against a background of weak global demand and, to meet the Government’s ambition, exports will have to grow by 10 per cent year on year.

Many factors which affect export performance are outside the control of the FCO and UKTI, such as exchange rates and political and economic changes overseas. While the UK outperforms Germany, France and Italy in the Gulf, it has not traditionally performed as well in many other emerging markets, such as Russia, Brazil, Turkey and China. Success here is essential if the Government is to meet its target.

Promoting UK exports has been a key FCO objective since 2010 and a long-standing one for UKTI. There is a joint UKTI-FCO Board to oversee coordination of their work overseas but currently there is no further joint accountability for planning, monitoring and delivery against their goal.

UKTI and the FCO have key roles to play in increasing the level of exports and there are examples of their working together effectively overseas. However, their initial responses to the government’s objectives of increasing exports have not been sufficiently coordinated. FCO staff overseas have developed effective approaches to help promote exports, but there needs to be greater sharing of best practice. Traditionally, UKTI performance measures have tended to focus on volume of activity but it is now increasingly looking to measure actual business outcomes.

Among the NAO’s recommendations is that the FCO improve how it measures and monitors the impact of its activities supporting exports so that it can demonstrate that its spending of some £420 million a year yields tangible results.

UKTI is piloting the use of external business partners to provide some of its services, and needs to implement lessons from the evaluation of its pilot initiative to use external partners if it decides to roll it out.

“If the Government’s ambitious objective of export-led growth is to be pursued vigorously and cost-effectively by the FCO and UKTI, the two bodies will have to make a substantial contribution. To do this, the FCO and UKTI need to adopt tough measurable objectives in terms of actions and results across their global networks, improve evaluation of impact, and work together more effectively.”

Amyas Morse, head of the National Audit Office, 16 October 2013

Notes for Editors

Key Facts

£1 tn
Ambition to increase exports by 2020

£498bn
Current value of UK exports

£420m
Spent by the Foreign and Commonwealth Office (FCO) and UK Trade and Investment (UKTI) on supporting UK business overseas in 2012-13

100
Target number of high-value opportunities UKTI must pursue

50,000
Number companies UKTI must assist by 2015

29
Number of emerging markets prioritised by the FCO

20
Number of high-growth markets prioritised by UKTI

£22.5 million
FCO funding available in 2012-13 for projects which support growth overseas

1,265
UKTI staff overseas in 160 locations

1,000
FCO staff overseas who spend at least some of their time working on growth related activities

Notes for Editors

  1. In March 2011, the government published The plan for growth, which sets out its strategy for rebalancing the UK economy away from a reliance on a narrow range of sectors and regions, to a more diverse approach to increasing investment and exports, which would help underpin sustainable long-term growth.  In November 2011, the Prime Minister set a target of 100,000 more companies exporting by 2020 and, in the 2012 Budget, the Chancellor of the Exchequer set a very challenging ambition of doubling UK exports to £1 trillion by 2020.
  2. The FCO has a worldwide network of embassies and consulates, employing over 14,000 people in nearly 270 overseas posts. UKTI is a non-ministerial department of both the Department for Business, Innovation & Skills (BIS) and the FCO.
  3. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.
  4. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Amyas Morse, is an Officer of the House of Commons and leads the NAO, which employs some 860 staff. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy.

Contact

NAO Press Office
+44 (0)20 7798 7400 or email pressoffice@nao.gsi.gov.uk

PN: 58/13