Memorandum submitted by the Department
of Trade and Industry
REVIEWS OF THE DEPARTMENT OF TRADE AND INDUSTRY'S
SUPPORT FOR BUSINESS AND ITS PRIORITIES AND STRUCTURE
1. The Clerk of the House of Commons Science
and Technology Select Committee wrote on 29 November to Robin
Young, Permanent Secretary at the DTI, asking for a memorandum
explaining the implications of the DTI Review for the Office of
Science and Technology (OST).
2. Following the Review the position of
the Office of Science and Technology, including the role of the
Chief Scientific Adviser, is essentially unchanged. The OST will
remain as part of the DTI. However the Review presents the opportunity
to get more value from the UK's investment in science, and to
strengthen the links between the OST and the rest of the Department.
A new group will be created, the Science Technology and Innovation
Group, one of whose objectives will be to maximise the Government's
significant investment in science. Further details are set out
in paragraph 7 of the attached annex. John Taylor, Director General
of the Research Councils, will head up this group on a temporary
basis in the Department until an externally recruited Director
General is appointed. The Director General will also sit on a
newly established Knowledge Transfer Strategy Committee, along
with the head of the Science, Technology and Innovation Group
and the Chief Scientific Adviser and others, to ensure that we
make the most of the knowledge that comes from our investment
in the science base.
3. The remainder of this memorandum describes
the changes in greater detail.
4. In June 2001 the Secretary of State for
Trade and Industry launched major reviews of the DTI's support
for business, and of its priorities and structure. This memorandum
summarises progress on the conduct of the reviews and their broad
conclusions to date. A diagram showing the new structure for the
Department is annexed, together with a note on the details of
5. Both reviews are being conducted by joint
teams of officials, consultants and secondees. Over the summer
and the early part of the autumn they undertook an extensive exercise
to gather views from the Department's key stakeholders. On 22
November the Secretary of State announced the changes the DTI
would be making to respond to criticisms from its stakeholders
and how it would be working to fulfil its central role of driving
up UK productivity and competitiveness.
6. Work on the detail of the changes will
continue. The reviews are expected to be complete by the end of
the year, and the main elements of the changes to be in place
by 1 April 2002. Full transition to the new structures and ways
of working is likely to take a further year to complete.
7. In addition to DTI staff, almost 1,500
organisations and individuals gave their views to the review team
regional workshops (for about 500
people in total);
face-to-face discussions (eg with
CBI, TUC, BCC, IOD, NCC etc);
consultation with other Government
letters to businesses (including
the FTSE 100);
an NOP survey of 450 businesses and
business support organisations;
8. Much of the feedback was very positive.
Many of those who commented thought the DTI ran some effective
programmes, had considerable expertise and good, well-motivated
staff. Above all, it was clear that key stakeholders wanted the
DTI to succeed and to matter.
9. But there were also criticisms of the
Department, notably that:
it lacked a core focus for its work
and a clear strategy;
it needed to get more value from
the investment in UK science and to strengthen the links between
the Office of Science and Technology and the rest of DTI;
its customers needed a clearer understanding
of what is done at the national, regional and local level;
its organisational structure was
too confusing and silo-like;
it was too inward looking;
it did not provide effective leadership
for business in Whitehall.
10. The main criticisms of business support
the Department had too many schemes
and many were of low value and had low impact;
confusion was created by numerous
programmes, names and brands;
there was no strategic overview.
11. The Secretary of State is clear that
the DTI's role should be to work with businesses, employees and
consumers to drive up sustainable UK productivity and competitiveness.
To do that it must focus on three strategic priorities: innovation,
enterprise and competitive frameworks. These priorities will be
linked by a new productivity strategy that will focus all DTI
activity and embrace resource as well as labour and capital productivity.
They will be underpinned by a Core Services Group that will deliver
services both to external customers and to the rest of DTI.
12. Delivering its new role and priorities
will require some radical changes. The Department must:
become truly customer focused;
ensure the best possible delivery
of its services;
focus on driving innovation; and
develop and sustain consistent and
transparent competitive frameworks.
Becoming truly customer focused
13. The Department needs to identify the
customers for whom it can really make a difference, to understand
their needs and to work with them to help them grow and become
more productive. To do this it must also excel at creating effective
partnerships with and between Regional Development Agencies, Business
Links, the Learning and Skills Councils, the Research Councils
and other public bodies, as well as with business, unions and
other key partners with which it works. This will mean re-focusing
the work of the Department's sector teams so that they develop
the relationships with customers and partners that are needed.
Transforming our delivery
14. DTI must make a dramatic improvement
in the way that it delivers services to all its customers. In
the area of business support, it will simplify the services it
offers to customers, moving from a plethora of schemes to five
strategically driven portfolios. Customers will be able access
the Department in whatever way they find most convenientin
person, by telephone or via the weband the service it provides
will be consistent and delivered to the standards of the best.
The Small Business Service will be strengthened and will build
on its achievements to improve service delivery.
15. People will be drawn from across the
Department and from outside to develop a new group responsible
for innovation and technology. The division will act as a catalyst,
connecting the key players and formulating an overview of the
issues. It will build on our investment in the science base to
ensure that UK businesses are able better to exploit the results
of scientific research and the latest technologies and create
better, cleaner products and processes. It will do this through
an innovation strategy co-developed with a variety of key partners
from universities, Research and Technology Organisations, business,
unions and others. A priority will be to ensure that we properly
exploit the considerable investment we make in scientific excellence
and particularly to help raise awareness of, and stimulate demand
for, technology within business and manufacturing industry.
Creating competitive frameworks
16. The UK is already one of the best places
to do business in the world. The Department will build on this
success by focusing more on best practice and better regulation,
particularly for small businesses. It will ensure that the best
practice it sets in one sector is transferred to other sectors
and will develop a more consistent approach to sectoral regulation.
It will continue to empower consumers and to drive competition
through all markets so that consumers enjoy more choice, better
service and competitive prices. It will also set standards for
the treatment of employees and encourage best practice and partnership
to help workplaces become more productive.
A NEW DTI ORGANISATION
Changes in the way the Department works
17. The DTI must be at the forefront of
modern Government. It is the Department closest to business and
sees at first hand the most innovative and effective ways of working.
As an organisation with over 10,000 staff and responsible for
an annual budget of £4.5 billion it should be managed like
a first-rate business. It must be:
better led and focused on productivity
and competitiveness. A new small Strategy Board with Ministers,
officials and outside non-Executives will strengthen the Department's
leadership and management. A new Strategy Unit including a new
Chief Economist will help develop productivity strategy;
open to its customers and stakeholders
and deliver measurable results. Its policies will be developed
with business, employees and consumers. People with relevant skills
will be invited to act as non-executives on new Group Boards to
strengthen our leadership and management, and challenge us to
become more effective. First-rate policy analysis will not be
enough: the Department must be able to make things happen. Delivery
skills will be more highly valued and nurtured and internal management
and training will be strengthened to improve the setting and achieving
of goals. DTI staff will spend more time in business and the programme
of two-way secondments will be stepped up. For a start, all senior
officials will be required as from next year to spend a week a
year in business, particularly smaller businesses;
better connected across boundaries.
Project working will become a way of life and staff will all spend
more time working in teams that cut across organisational boundaries.
The Department will also capture and share knowledge more effectively
across the organisation and with our external partners and customers.
The new structure
18. A new organisational structure has been
designed to help facilitate the changes set out in this memorandum.
A structure alone will not bring about the changes, but it draws
people together to focus on the Department's new priorities and
it has been designed to support some of the new ways of working
that will be needed to implement them.
11 December 2001