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UK Trade & Investment: Trade Support

A National Audit Office report on UK Trade & Investment (UKTI) has found that, three years into its five-year strategy to deliver improved support to UK exporters, it is close to meeting most of its performance targets. UKTI lacks, however, sufficiently robust measures of the costs of delivering its individual services. Without such information it is hard to show that value for money is being optimised.

UKTI has put in place extensive arrangements to obtain regular and systematic feedback on the quality of its services. Some 52 per cent of businesses receiving support reported that their performance improved as a result of receiving support, exceeding its 50 per cent target.

UKTI asks its users to estimate the financial benefit arising as a result of its support. In the 12 months to June 2008, this figure was £229,000, on average, per business. UKTI uses this estimate to calculate its reported benefit to cost ratio of 15:1. But the underlying survey data shows that 29 per cent of users either did not know, or declined to provide an estimate, 30 per cent forecast some financial benefit and 40 per cent forecast no financial benefit. The survey focuses on forecast impact rather than actual financial impact which may, in practice, be achieved some years later.

UKTI has sought to improve its overall efficiency by, for example, shifting resources to better performing markets and services. In the year to March 2008 it reported that expenditure on trade support fell by 4.5 per cent while the number of businesses supported rose by 35 per cent. Some of this increase may be attributable to previous under-recording.

UKTI does not have a full picture of the costs of providing the individual services. It is therefore not in a position to gauge reliably the efficiency of its activities, the contribution of different parts of the organisation to these services, nor the relative costs and benefits of the different services it provides. In 2008 UKTI established a model for cost assessment, but this is not yet sophisticated enough to demonstrate whether value for money is being optimised.

 

“UKTI has made good headway in improving its support to UK exporters and is currently meeting, or close to reaching, all of its performance targets. However, to take informed decisions on the best use of taxpayers’ money, it needs to develop an improved cost model to determine accurately the costs of delivering its individual services.”

Tim Burr, head of the National Audit Office

Notes for Editors

  1. In 2007 UK exports totalled £368 billion and represented 26 per cent of the UK’s GDP. Total expenditure by UKTI in 2007-08 was £297 million of which £220 million was support of trade and £77 million went towards encouraging inward investment.
  2. UKTI, which is part funded by the Department for Business and Regulatory Reform (BERR) and the Foreign and Commonwealth Office (FCO), set out its five-year strategy in 2006 which aimed to deliver, by 2011, measurable improvement in the business performance of its international trade customers with particular emphasis on innovative firms.
  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 Comptroller and Auditor General, Tim Burr, is the head of the National Audit Office which employs some 850 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

PN: 24/09