Select Committee on Trade and Industry Appendices to the Minutes of Evidence


APPENDIX 1

Supplementary memorandum submitted by the Department of Trade and Industry

QUESTIONS ARISING FROM SIR MICHAEL SCHOLAR'S ORAL EVIDENCE OF 4 JULY

1.  (a)  Following the exchanges at Q97ff, it would be helpful to have a breakdown of DTI staff numbers for 1999-2000, showing the changes attributable to the establishment of (i) BTI and (ii) SBS

  The estimated outturn of staff in post in the 2000 Expenditure Plans Report included staff from both BTI and SBS in the total given for DTI (Gross Control Area). The final outturn, as measured on 5 April 2000, was 6,568 staff, compared to the estimate of 6,516 in the EPR. Of these BTI had 621 staff funded by DTI and SBS had 202 staff funded by DTI. (Note all figures are inclusive of casual staff and are based on full time equivalents.)

(b)  It would be helpful to have details of the changes in recent years in staff numbers and where possible grades in the component parts of the former Industry Group, referred to at Q118ff

  Please see below two tables relating to staff in the Business Competitiveness Group, previously the Industry Group. Table 1 shows the staff numbers split by Directorate, at the beginning of each financial year since 1 April 1997 and includes the latest monthly figures produced. The second table shows the split by grade in each of the directorates for the latest month, this information is not readily available for previous months. (Information derived from Monthly Staff in Post Reports.)

STAFF IN POST FIGURES FOR BUSINESS COMPETITIVENESS GROUP (PREVIOUSLY INDUSTRY GROUP)

  
   
1 April 1997
1 April 1998
1 April 1999
1 April 2000
1 August 2000
Director General & Industry Sponsorship Support
DG/IIS
11
15
11
12
14
British National Space Centre
BNSC
31
33
32
34
34
Chemicals & Biotechnology
CB
53
52
52
56
57
Communications & Information Industries
CII
127
125
135
154
163
Engineering Industries
EID
157
145
141
136
136
Environment
ENV
38
37
40
43
45
Industry Economics & Statistics
IES
18
15
15
14
14
Innovation Unit
IU
14
13
12
16
0
Consumer Goods Business & Postal Services
CGBPS
36
44
44
64
76
Innovation Policy & Standards
IPS
127
113
110
116
128
TOTAL
  
612
592
592
645
667


  The staff numbers shown are based on full time equivalents, ie two part timers working for half-a-week each, count as one.

  Following a Departmental reorganisation the Innovation Unit moved from the Group at the beginning of the 2000-01 financial year.

BUSINESS COMPETITIVENESS GROUP STAFF IN POST FIGURES BY RANGE AT 1 AUGUST 2000

Range
DG/IIS
BNSC
CB
CH
EID
ENV
IES
CGBPS
IPS
Total
Director General
1
0
0
0
0
0
0
0
0
1
Senior Civil Service
1
3
2
6
6
1
1
6
6
32
RANGE 11
1
2
1
8
6
2
2
6
7
35
RANGE 10
2
6
9
32
31
6
4
11
20
121
RANGE 9
1
5
5
19
13
5
0
5
15
68
RANGE 8
2
2
15
19
23
9
1
12
24
107
RANGE 7
1
1
4
9
11
2
1
2
4
35
RANGE 6
0
1
5
17
6
5
1
8
9
52
RANGE 5
3
4
3
13
13
5
2
10
12
65
RANGE 4
0
1
4
22
14
2
1
7
14
65
RANGE 3
2
7
4
8
10
3
0
7
7
48
RANGE 2
0
0
4
8
2
4
0
0
10
28
RANGE 1
0
1
0
0
0
0
0
0
0
1
FASTSTREAM
0
1
1
2
1
1
1
2
0
9
TOTAL
14
34
57
163
136
45
14
76
128
667


  The staff numbers shown are based on full time equivalents, ie two part timers working for half a week each, count as one.

2.  (a)  An example of a reduction in resources allocated because of a failure to meet a target would be of interest, as at Q 70-72

  We have not been able to identify a reduction in resources allocated within DTI because of failure to meet an Agency target. Failure by an Agency to meet a target will certainly lead to increased pressure in that area: questions may be raised at the Agency Steering Board; the DTI's Finance Directorate may seek an explanation; the Agency's management may review the issue. All parties will be seeking a management response which will lead to improving performance; and getting the Agency back on track to hitting the target which was missed. Increased resources may or may not be part of that management response. It is equally likely that improvements in working practices will feature in the response.

(b)  The Permanent Secretary offered cash and proportionate figures on the costs of purchasing green electricity (Q105)

  The Department is charged according to the consumption profile of its individual buildings, so there is no single flat-rate differential between green and brown electricity. In practice it varies between 5 per cent and 6 per cent.

  For our major buildings our 26 per cent green electricity increases our total electricity bill by 1.5 per cent or just under £10,000. This is more than offset by the £95,000 total electricity saving we have negotiated this year.

(c)  It would be helpful to know the number of bills paid by DTI in a typical year: and any results of the inquiries made as to particular problem areas (Q109ff)

  In 1999-2000 DTI paid about 46,500 invoices. The Committee asked which areas of the Department were not meeting the target. The following provides details of percentage of invoices paid on time and is calculated using a bespoke report on DTI's accounting system (RAB) using standard payment terms of 30 calendar days. The time taken to pay invoices is calculated either from the date of receipt or from the date a supplier dispute is resolved.

  The figures are:

    —  Business Competitiveness Group—86 per cent.
    —  Competition and Markets—98 per cent.
    —  Energy—89 per cent.
    —  Enterprise and Innovation—89 per cent.
    —  Legal Services—98 per cent.
    —  Ministerial Parliamentary Support Team—66 per cent.
    —  Office of Manpower Economics—95 per cent.
    —  Office of Science & Technology—97 per cent.
    —  Resource and Services—91 per cent.
    —  Small Business Service—97 per cent.
    —  Trade Policy—92 per cent.
    —  TOTAL DTI—92 per cent.

  These figures do not include our Executive Agencies, apart from the Small Business Service, or British Trade International.

  Some Groups' payment performance is very good, and only requires slightly more effort to achieve the 100 per cent target. However, overall the position remains disappointing.

(d)  The Permanent Secretary referred to an apparently unique bonus scheme for ECO staff (Q84): it would be helpful to have details

  A team bonus scheme was introduced in the Export Control Organisation (ECO) on 1 November 1999. The aim of the scheme was primarily to lift efficiency in the ECO, including in particular in relation to the targets for turning around export licence applications.

  Bonuses are awarded twice yearly, on the basis of performance against targets. They are awarded on the basis of the same cash amounts to all individual members of a team, irrespective of their pay range. Targets are set at for both the ECO as a whole and for individual teams. The ECO-wide targets relate to the Government-wide targets for turning around export licence applications and to the internal ECO target for its part of the process. The team-level targets relate, for example, to time taken at the different stages of the licensing process, and also include a range of quality related targets.

  Up to £75,00 is available for the team bonus scheme for the financial year 2000-2001 for the 140 staff in the ECO. The levels of bonuses to be awarded are decided by a panel consisting of the Director General, Trade Policy; the Director General Resources and Services and the Director, Export Control and Non Proliferation.

3.  TARGETS

(a)  It would be helpful to have updated out-turn figures where available, specifically on

(i)  productivity per hour and per worker (Q24)

  Recent productivity figures are measured on an output per worker basis, and output per hour basis against the G7. For the former measure, in 1999 with the UK indexed at 100, the G7 (excluding UK) measured 126. For the latter measure, with the UK indexed at 100, the G7 excluding UK measured 112 in 1998 (1999 figures are not yet available).

(ii)  sickness absences (Q83)

  Sickness absence figures for the whole of the Civil Service are collated, adjusted and analysed by Biomathematics and Statistics Scotland (BIOSS) and the results are subsequently published annually in a BMI report commissioned by The Cabinet Office. BIOSS make statistical adjustments to the figure to take account of factors such as geography and cyclical epidemics like influenza. This makes cross-deparmental comparisons possible.

  It is on these adjusted figures that Civil Service Departments are being judged against the targets set by the Treasury. The figures for calendar year 1999 should be available by the end of October and will be announced by the Cabinet Office in the normal way.

(iii)  the percentage of business expressing satisfaction with Business Links services due in April 2000 (Cm 4611, p15)

  MORI interviewed 527 users of Business Link between April and June 2000. The percentage indicating that they were satisfied with the overall service received was 74 per cent.

  Seventy-eight per cent of business with 10 to 249 employees were satisfied, compared with 75 per cent of businesses with 10 to 2000 employees in the last MORI survey (August/September 1997).

(iv)  the benchmarking results on SMEs wired up to the digital marketplace, due in June 2000 (ibid)

  The 1998 Competitiveness White Paper set a target to "increase from 350,000 to one million the number of UK SMEs wired up to the digital marketplace by 2002."[1] The 1999 International Benchmarking Study (IBS) indicated that rapid progress had been made against this target showing that 600,000 SMEs were now wired up. Three new targets were therefore set, namely to ensure that by 2002:

    (i)  1.5 million SMEs are wired up;

    (ii)  one million SMEs are trading online; and

    (iii)  the performance of the UK's smallest businesses is comparable to the best in the world.

  This year's study—to be published at the beginning of October—will show that 1.7 million SMEs are now wired up. Target (i) has therefore been achieved. In relation to target (ii), the study shows that 450,000 SMEs are trading on-line.[2] In relation to target (iii) the performance of UK micro businesses (with respect to being online and trading online) is average, compared to other benchmarked countries (ie the US, Canada, Japan, France, Germany, Italy and Sweden). There is more to do if we are to achieve the target. The performance of UK small businesses is better than average but still not the best in the world.

(v)  impact reports on the value of additional exports generated, due in April 2000 (ibid, p16)

  The establishment of British Trade International in May 1999 has meant significant changes in the remit for official export support, and further work on impact measurement. As British Trade International's Chief Executive reported to the Committee's joint meeting with the Foreign Affairs Committee in June of this year, new output and quality measurements are being developed. Their aim will be to assess the impact of export services on various aspects of business performance, and as a result the earlier work on impact measures has been amended. No reliable figures relating to the original target are available.

(vi)  the quality of the science and engineering base output due in June 2000 (ibid)

  The latest data (for 1999) to provide an indicator of the overall quality of the Science and Engineering Base output are being processed but the results are not yet available. The most recent (1998) figures available showed:

    —  Quality—the UK's per cent share of world citations was 10 per cent and international ranking at subject level was second in 14 of the 20 fields studied.

    —  Relevance—the UK's world ranking in terms of proportion of HEI funding from non-Governmental sources was second of the G7 countries.

    —  Cost effectiveness—UK's ranking against the G7 countries (and others) on number of papers published per £1 million investment was first.

  We will be happy to let the Committee have the figures updated to 1999 when they become available.



(b)  On pages 19-21 of Cm 4611 there are a number of references to figures being available in the summer or in April/May/June 2000. It would be helpful to have the figures now available.

  The figures now available are:

Departmental operationPSA Target Progress reported in Cm 4611Update
DTI Strategic Efficiency TargetDTI's strategic efficiency target is to achieve savings of 2.5 per cent of its running costs each year over the period covered by the Comprehensive Spending Review. DTI will continue to develop better measures of efficiency and extend these to cover a wider range of departmental activities, including complementary efficiency targets for other areas of the Department's running costs. Figures on progress will be available in Summer 2000.
DTI participates in Treasury Working Group measuring efficiency of HQ activities.
DTI achieved a saving of £10.594 million on projected costs of £406,628 million (a saving of 2.605 per cent). Major components of the 1999-2000 saving are direct and general savings from the introduction of the ELGAR and MANDRIN IT systems; savings between ACAS and ETS, accommodation savings; staff costs; usage of hard-charged services; postage and stationery costs.
Companies HouseMaintain an annual unit cost reduction target of 3 per cent (to be reviewed each year) in real terms on document registration. Companies House achieved a 6 per cent reduction in 1998-99, more than meeting the original target. It sought to achieve a 3 per cent reduction in 1999-2000. 6 per cent reduction achieved in 1999-2000.
Insolvency ServiceAchieve a 5 per cent reduction in real terms in case administration unit costs over the period 1999-2002. During 1999, the Service will propose a new target which will look for a reduction of the order of 10 per cent in the cost of investigations over the period 1999-2002. The Insolvency Service achieved a 5.1 per cent reduction in 1998-99, more than meeting the original target. InsS achieved an 11.8 per cent reduction in real terms administration unit costs in 1999-2000. With regard to their new target which looked for a reduction of the order of 10 per cent in the costs of investigations, they achieved 5.9 per cent in 1999-2000.
National Weights and Measures Laboratory To reduce the real cost of a programme hour by 4 per cent over the period 1997-2000. Target achieved. NWML achieved a 5.5 per cent reduction by May 1999. NWML achieved a 2.1 per cent reduction in 1999-2000.
Patent OfficeTo increase output in relation to current expenditure by an average of at least 2 per cent per annum over the period 1998-99 to 2002-03. The Patent Office achieved an increase of 2.1 per cent in 1998-99 and is on course to fulfil the target for 1999-2000 and future years. 9 per cent increase achieved in 1999-2000.
Employment Tribunals ServiceTo achieve a 3 per cent (to be revised each year) real terms reduction in administrative unit costs in the employment tribunals. Original target achieved and upgraded to 5 per cent. By September 1999 ETS had made a real terms administrative unit cost reduction of 6 per cent. 1999-2000 figures are due in April 2000. 7.65 per cent reduction in 1999-2000 (target upgraded to 5 per cent in September 1999).
Radiocommuni-cations AgencyAchieve a gain in financial efficiency (comparing costs with income at constant fee levels) of 20 per cent over the period 1998-99 to 2002-03. The Agency made efficiency gains of 5 per cent to August 1999 and is well on course to meeting the target. 1999-2000 figures are due in April 2000. RA will meet their yearly target of a 2 per cent gain.
AccommodationOperational costs per capita to be reduced by 3 per cent in real terms over two years on a 1997-98 baseline. By June 1999 the Department had achieved a 4.9 per cent saving in this area, ahead of target and well in line to achieve the overall objective. Next figures are due in June 2000. At the end of 1999-2000 (ie the duration of the target) the Department had achieved a reduction of 5.74 per cent on the baseline. Staff numbers increased by 5.62 per cent, while costs decreased by 0.44 per cent.
Better Quality ServicesRegularly and systematically review services and activities over a five year period in line with government policy as set out in the handbook "Better Quality Services". Develop a review programme by September 1999. The DTI Review Programme was submitted to Cabinet Office and accepted in November 1999. BQS reviews started in Companies House and NWML in February and are due to start in the Insolvency Service and Patent Office in May. The Department is on target to review 60 per cent of its service by the end of March 2003 and 100 per cent by the end of March 2005. The BQS review of CH is due by the end of October, those for INSS and PATS by the end of November and NWML's by the end of the year. A BQS review of the European Policy area of the central Department will be completed by the end of October. The overall BQS plan has been agreed with the Cabinet Office.
Electronic GovernmentSet a target by 31 March 1999 in support of the Government commitment that, by 2002, at least 25 per cent of government services will be accessible electronically. Productivity Target: Level of services accessible electronically: 8 per cent at October 1997. DTI has set a target of 25 per cent services to be accessible electronically by 2002.
Baseline: 8 per cent of services accessible electronically in October 1997.
By June 1999 23 per cent of DTI services were available on-line. Next update schedule for June 2000.
This target has been superseded by the March Cabinet agreement that all key services should be available on-line by 2005. Progress is being reported to the Cabinet Office. The Department is on course to achieve the 2005 target.
Sickness AbsenceDTI will work towards meeting the government-wide target to reduce Civil Service sickness absence rates by 20 per cent in 2001 and by 30 per cent in 2003. Targets specific to the DTI will be set by February 1999 and an action plan drawn up for achieving them and agreed with the Cabinet Office by June 1999. Targets for the Department have been agreed:
7.4 per cent days lost through sickness per staff year by end 2000-01.
6.9 per cent days lost by end 2002-03.
The Department's baseline is 8.0 days in 1998. Sick absence figures for 1999 will be available in late 2000.
The DTI Action Plan has been agreed with Cabinet Office. Work is in hand to promote best practice in sickness absence management including a video for managers; issuing regular management information to senior management on staff absences; earlier referral of long term sickness absence cases to the Medical Advisor; and reviewing DTI inefficiency procedures.
Work is in hand on an initiative to promote best practice in sickness absence management. This includes a video for managers; issuing regular management information to senior management on staff absences; earlier referral of long term sickness absence cases to the Medical advisor; and reviewing DTI inefficiency procedures.
Figures for 1998:
Unadjusted: 8.0.
Adjusted: 9.6.
BMI report on sickness absence for 1999 now due mid 2001.
FraudOperate a zero tolerance policy towards fraud. Review anti-fraud control systems in 1999. In 1999 the Department launched a review into its policy and approach to fraud in the context of risk management and expects to introduce revised arrangements during the first half of 2000. The Department has carried out a review of fraud policy and supporting procedures. The Departmental Board has endorsed a restatement of our policy of working to eliminate fraud and a streamlining of internal procedures. Updated guidance on fraud risk management will be promulgated to senior managers in the Autumn.
Procurement (1)Committed to the government-wide target that, by March 2001, 90 per cent of routine procurement of goods will be conducted electronically. The Department has an agreed action plan to increase the efficiency of purchasing, focusing on the introduction of electronic commerce and the encouragement of collaborative purchasing initiatives. Productivity Target: Level of routine procurement conducted electronically. The DTI action plan to increase efficiency of purchasing will be reinforced in light of recommendations of Gershon review. The Department has commissioned and received two studies and an outline technical specification from ICL Unitas aimed at increasing electronic procurement to 100 per cent. Two studies by ICL Unitas have highlighted that the market for electonic purchasing systems is not fully developed. In March 2000, OGC wrote to all Departments imposing a moratorium on the development of new systems, in anticipation of the award of contract for a Government electronic shopping mall or E-hub. In April, OGC commenced a review of the E-hub project, which has in turn led to a period of fact finding across the Government sector. The conclusions of the review are now awaited. In the light of these developments, DTI will work towards the 90 per cent target by expanding the use of the Government Procurement Card with our suppliers. Whereas we expect to see a substantial increase on current throughput, the chances of reaching the 90 per cent target are now very slim. Seventy per cent by March 2001 is a more realistic target for DTI.
Procurement (2)The DTI is committed to paying all correctly presented bills within 30 days of receipt of goods and services or a valid invoice, whichever is later, or other agreed payment terms. Target: 100 per cent 1999-2000. 1997-98: Target 97.5 per cent, outcome 98.2 per cent.
1998-99 Target 97.5 per cent, outcome 96.3 per cent.
Target 1999-2000 100 per cent, outcome expected mid 2000.
As of May 1999, the outcome against this target has slipped to 96.3 per cent. DTI will utilise the new reporting capabilities offered by its tracking database ORACLE RAB to monitor prompt payment on a regular basis, and push towards achieving future targets.
The return of April-June, drawn from our Oracle-based finance system, indicated that 92 per cent of all invoices were paid within the required timescale. This means that the Department still has some way to go to meet the target of full compliance, and that performance has dipped from the previous return. The Secretary of State and the Permanent Secretary have both expressed concern and have asked for renewed efforts to be put in place to address the issue. Directorates will utilise the reporting facilities offered by the Oracle RAB database to monitor prompt payment on a regular basis.


(c)  The Permanent Secretary offered to provide objectives and targets for lower levels of the Department. It would be helpful to have a set of these in full for:

(i)  the Vehicles Directorate

Automotive Directorate

OBJECTIVE 1:

  To develop and maintain a strategic knowledge and understanding of the automotive sector, by:

    —  maintaining a regular dialogue with leading vehicle and component manufacturers, and retailers;

    —  ensuring an understanding of the long term strategies of the major companies and their implications for the UK;

    —  maintaining effective dialogue with relevant trade associations so that their general knowledge and understanding of their sectors informs the government view.

OBJECTIVE 2:

  To understand the factors that determine the competitiveness of the UK automotive sector and encouraging the identification of, and action on, its strengths and weaknesses, by:

    —  maintaining knowledge and understanding of the key global challenges facing UK vehicle and component (original equipment and aftermarket manufacturers); and distributors and retailers, in particular SMEs;

    —  developing detailed competitiveness analyses of these different sectors and on the basis of this an agreed agenda for action with the industry;

    —  supporting the continued development of the SMMT Industry Forum as a means of helping deliver improved competitiveness to the automotive components sector;

    —  encouraging the establishment of a Retail Forum to complement Industry Forum and enable the total supply chain from raw materials to the final customer to be improved;

    —  encouraging the wider dissemination and sharing of best practice, and the development of suitable mechanisms for this;

    —  working with FMCEC on the development of a new competitiveness analysis for the construction equipment sector;

    —  considering with FMCEC the scope for development of an Industry Forum replication project.

OBJECTIVE 3:

  To provide timely and accurate information and advice for the information of Government, EU and international policy, by:

    —  ensuring HMG and legitimate industry views are taken into account in discussions at EU level on new standards and regulations, eg emissions and pedestrian safety;

    —  facilitating progress within Whitehall on regulatory issues impacting adversely on the industry, eg change to August registration plate.

OBJECTIVE 4:

  To assist the development of strong and competitive markets for the automotive sector and to encourage through partnership the exploitation of market opportunities, by:

    —  encouraging Trade Associations to work with British Trade International to enhance their focus on exports;

    —  contributing effectively to the European Commission's review of the Block Exemption and its work on successor arrangements, in consultation with the industry and other Member States;

    —  encouraging vehicle manufacturers to commit to reducing European car price differentials.

OBJECTIVE 5:

  To encourage and to spread best practice in the UK automotive sector, by:

    —  helping the UK automotive industry compete through developing the knowledge and skills of their people, in co-operation with the regional organisations, the education sector and other relevant bodies;

    —  encouraging best practice among Trade Associations with which we deal;

    —  maintaining contacts and co-operation with Regional Development Agencies and business support organisations (particularly following the creation of the Learning and Skills Councils and the SBS) to promote and disseminate Industry Forum type activities in the regions;

    —  developing Retail Forum and its advisory groups to strengthen dialogue between manufacturers and dealers;

    —  leading a partnership of education institutions from the Higher Education and Further Education sectors who are willing to work with the Automotive Directorate and the Industry Forum to improve the competitiveness of the automotive sector, both by delivering courses directly to companies and by making courses better suited to the needs of the industry;

    —  utilising excellence of motorsports sector for transfer of technology and best practice to automotive and wider engineering sector;

    —  SMMT, regional organisations and companies so as to become the definitive web source of the automotive industry.

OBJECTIVE 6:

  To promote a culture in the UK automotive sector of innovation, enterprise investment by:

    —  pursuing energetically barriers to trade by UK companies overseas;

    —  promoting the UK as an attractive investment location for foreign and global vehicle and component manufacturers; for both manufacturing and R&D;

    —  encouraging the UK automotive and motorsport industry to respond to the challenges of globalisation by promoting market opportunities, collaboration strategies, technology transfer and outward investment;

    —  improving awareness and understanding of the opportunities in key emerging and developed markets, eg China, Japan.

OBJECTIVE 7:

  To advance technological excellence in the UK automotive sector and to maximise its contribution to economic development and the quality of life, by:

    —  working with industry, its trade associations, academic professional bodies, user groups and OGDs including OST to take forward the Foresight Vehicle Programme;

    —  representing the interests of UK industry on technology policy and regulatory issues affecting the automotive sector.

(ii)  the company investigation directorates, beyond those referred to at paras 10.4-10.5 of Cm 4611

Company Investigations Branch—Current Objectives and Targets

  RAM2000 objectives and key performance measures

  Management Unit Objective(s)

    —  To ensure that complaints and concerns about corporate malpractice are quickly vetted and that, where appropriate, they are fully investigated and appropriate follow-up action is promoted.

  Key Performance Measure(s)

    —  To complete vetting of complaints within an average of 48 days of receipt;

    —  To complete investigations under section 447 Companies Act 1985 within an average of 90 days of issue of an authority and within 188 days of receipt of complaint;

    —  To refer cases requiring follow-up action to the relevant authority within six weeks of completion of investigation.

CIB Business Plan 2000-01 objectives and targets

  In addition to the RAM2000 objectives CIB, also has in place a set of business plan objectives and targets which reflect its three core activities. These objectives are broken down in detailed targets for the Directorate and reflect the range of activities that make up the CIB's work.

OBJECTIVE 1: TO CONSIDER REQUESTS TO USE STATUTORY POWERS QUICKLY AND CAREFULLY

Performance targets

Average time taken to complete pre-vetting process 14 days
Average time taken to decide on requests for investigation (vetting) 48 days
Maximum time between communication with complainants 28 days, after initial 15 day response
Reach decision on requests from overseas regulators 21 days


Action points

Initiate replacement of OSIRIS case management system By Apri 2001
Review consistency and quality of vetting decisions By April 2001

Commentary

The Department's statutory investigation powers must be invoked in genuine cases of public concern that satisfy the statutory tests. The performance measures have been complied with, notwithstanding a reduction in manpower. The action points identify a number of specific tasks that need to be undertaken to maintain or improve the quality and effectiveness, including cost-effectiveness, of the process.

OBJECTIVE 2: TO USE RESOURCES EFFECTIVELY FOR CARRYING OUT INVESTIGATIONS UNDER THE COMPANIES AND FINANCIAL SERVICES ACTS

Performance targets

Average time to commence statutory investigations 48 days
Commencement of public at risk investigations 7 days
Average time to complete internal statutory investigations 90 days
Average time to complete external statutory investigations 120 days

Action points

Put proposals to Minister to modernise investigatory powers March 2001
Develop a concordat with the FSA including guidelines for our relationship with that body after implementation of the Financial Services and Markets Act December 2001


Commentary

Performance targets have been met. Modernisation of investigatory powers will include new ways of using and developing investigatory expertise to ensure continuing contribution to departmental objectives.

OBJECTIVE 3: TO MANAGE INSPECTIONS AND FOLLOW-UP WORK EFFECTIVELY AND CONSISTENTLY

Performance targets

Appoint external inspectors (from when decision to appoint taken) 4 weeks
Appoint internal inspectors (from when decision to appoint taken) 12 weeks
Agree an outline timetable with inspectors (from appointment date) 6 weeks
Meet with inspectors (on average)3 months
Decide whether to disclose reports and, if so, to disclose through relevant gateways (from completion of report) 6 weeks (FSA)
10 weeks (CA)
Provide assistance in response to ad hoc requests from inspectors 7 days (easy)
28 days (hard)


Action points

Contribute to Company Law Review on powers of intervention Ongoing
Complete annual review of supplemental guidance to inspectors By April 2001


Commentary

  Performance targets have been adhered to.

Background on CIB Responsibilities

  Companies Investigation Branch (CIB) carries out statutory fact-finding investigations under the Companies, Financial Services and other Acts. Statutory investigations are carried out mainly by CIB's own staff under the authority of section 447 of the Companies Act 1985. This gives powers to compel companies to produce their records and give explanations of them. Such investigations are not generally made known to the public. This is in contrast to inspections by inspectors appointed by the Secretary of State under section 432 of the Companies Act 1985, where the appointment and the inspectors' report are generally published. CIB provides a liaison and management function for such inspections.

  Requests for investigations stem primarily from the general public, either directly or indirectly (through other parts of the department, other regulators or MPs). If matters of public concern are revealed by CIB's enquiries, its investigations form the basis for a variety of follow-up action including: civil action to wind up companies engaged in activities that are against the public interest and to disqualify individuals from acting as company directors; and referrals to DTI's own prosecution lawyers (or often the Serious Fraud Office or Crown Prosecution Service) to see whether a criminal investigation and prosecution by them is justified.

  CIB is part of CLI Directorate, which is also responsible for:

    —  Corporate governance and the development and administration of company law.

    —  The three-year independent Company Law Review which is expected to report in 2001.

    —  Financial reporting and sponsorship of the accountancy and audit professions.

  CIB comprises about 80 staff in steady state (excluding an administrative support unit serving the whole of CLI, which is located within CIB).

(iii)  the achievement of diversity in the workforce, as set out at page 23 and paragraphs 13.49-13.53 of Cm 4611

Benchmarks identified by the various programmes of action

BENCHMARKS FOR WOMEN BY BAND WITHIN THE DTI

  
1999 %
2002 %
2004 %
2005 %
Band B
40.0
43.0
47.0
50.0
Band C
26.0
32.0
37.5
40.0
SCS
21.0
28.0
32.5
35.0


BENCHMARKS FOR ETHNIC MINORITY STAFF BY BAND/RANGE

  
1998 %
2001 %
2003 %
2005 %
2010 %
Band B
11.0
14.0
16.0
18.0
19.0
Band C
3.6
5.5
6.3
8.5
10.0
of which:
Range 9
7.0
9.0
10.0
12.0
15.0
Range 10
2.0
4.0
5.0
7.0
8.0
Range 11
3.4
4.0
5.0
7.0
8.0
SCS
0.5
2.0
3.5
4.0
5.0


BENCHMARKS FOR STAFF WITH DISABILITIES

  
2000 %
2002 %
2004 %
2005 %
Band A
8.0
8.9
9.4
9.5
Band B
4.9
5.7
6.3
6.7
Band C
3.3
3.4
3.7
3.8
SCS
3.8
3.9
4.2
4.7

PROGRESS MADE TOWARDS ACHIEVING BENCHMARKS

  There was a small increase in the proportion of women in managerial grades (Bands B and C) which is now 34.15 per cent compared with 31.17 per cent in 1999.

  Female representation in the Senior Civil Service continues to increase: from 21 per cent in 1999 to 23.7 per cent in 2000.

  Three hundred and fourteen members of staff now work part-time, compared with 309 in 1999. However there has been no overall increase in the percentage of staff working part-time due to additional recruitment.

  15.7 per cent of staff are known to be of ethnic minority origin, and there continues to be an increase in ethnic minority representation in managerial grades (Band B an increase from 11.4 per cent in 1999 to 12.8 per cent in 2000 and Band C an increase from 4.1 per cent in 1999 to 4.6 per cent in 2000). These figures indicate progress towards the DTI's benchmarks of 16 per cent at Band B and 6.3 per cent at Band C by 2003 respectively.

  In 2000 5.1 per cent of staff are known to have disabilities (compared with 4.2 per cent in 1999) and staff with disabilities continue to be employed at all levels including the Senior Civil Service.

Broad overview of the key objectives of the various programmes of action

1.  RAISING AWARENESS AND IDENTIFYING CULTURAL BARRIERS

  To create a more favourable climate by raising awareness of issues affecting particular groups including cultural and attitudinal factors that are barriers to such staff developing their full potential at work, and to find ways of overcoming such obstacles.

2.  VALUING STAFF

  To promote a culture in which all staff feel valued and respected, regardless of their ethnic origin, sex, whether they have disabilities or work part-time.

3.  CAREER DEVELOPMENT, PROGRESSION AND PROMOTION

  To contribute to achieving a proportion of relevant groups selected on merit in each range throughout the Department that broadly reflect their proportion in the relevant sector of the working population. To achieve a fair representation in all management levels. To ensure that disabled staff have access to a wide variety of posts which will give them opportunities to gain experience of work in the range.

4.  INTERNAL AND EXTERNAL RECRUITMENT

  When external recruitment takes place, to seek fair representation of minorities among recruits, with the particular aim of increasing representation in Band B and above.

5.  TRAINING

  To ensure that all staff receive the necessary Equal Opportunities training. To ensure that staff from all groups have equal access to, and are encouraged to take up training and development opportunities to realise their full potential.

6.  ALTERNATIVE WORKING PATTERNS

  To remedy any gaps or flaws in the opportunities for flexible working and the underpinning systems and to provide the promotion, presentation and acceptability of non-standard patterns of work.

7.  CARING RESPONSIBILITIES

  To raise the awareness within the Department and encourage support for all staff with caring responsibilities by adopting a flexible approach to meeting work commitments.

8.  THE WORKING ENVIRONMENT

  To ensure that steps are taken so that the working environment does not prevent disabled people from taking up positions and gaining advancement.

22 September 2000


1   A business is "wired up" or "on-line" (according to DTI's connectivity indicator) if it makes frequent use of external e-mail, EDI (Electronic Data Interchange) or has a website. Back

2   A business "trades online" if it both (1) orders online or allows its customers to do so, and (2) makes payments online or allows its customers to do so.  Back


 
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