21 March 2007
Reshape DTI, says manufacturers' organisation
Speculation about the possible future abolition of the DTI is damaging, says manufacturers' organisation EEF – instead, the Department should be retained and restructured to give it sharper focus
In a new report published this week, EEF has called on the next Prime Minister to give a personal commitment to maintaining key business support functions in a single government department responsible for driving the productivity agenda and promoting economic growth.
EEF director general, Martin Temple says: “The issue of how best government can support business and promote economic growth is far too important to be periodically kicked about from pillar to post. Whilst the status quo is not sustainable, the increasing speculation is damaging both to business and to the DTI itself.
“This year will see a major change in the UK’s political landscape. There is now a persuasive case to put in place a single government department within a modern Whitehall structure with the responsibility of promoting economic competitiveness.”
In the report, EEF argues that it is too simplistic to abolish the DTI completely and split its functions into other departments. The department has four core functions, which are interlinked and have clear synergies between them: trade promotion, fair markets (covering competition and business regulation), business support and, science and innovation. These will all have to be carried out somewhere in government and economic analysis suggests will be more effective when grouped together.
However, EEF also believes that the current system, where there is often overlap with the Treasury in promoting economic growth, is not sustainable. This causes confusion and leads to the DTI being seen as of marginal importance.
In response, EEF is proposing three key priorities:
1. A single government department responsible for the overall co-ordination of strategy and delivery of the productivity agenda, which includes the current core functions of the DTI. This could be the, DTI, Treasury or, a new department, which specifically focuses on economic growth and productivity and is distinct from the management of the nation’s finances. Less important than the name of the department is the fact that it must be represented at senior level within the Cabinet.
2. A single ‘Department for Infrastructure’, which would include responsibility for energy, transport and planning. There are clear synergies between these functions, which are a vital component of economic performance. They could be grouped together in a single department taking a strategic approach to infrastructure policy. This would have a clear remit for promoting economic growth and engaging with business.
3. A commitment across government to the promotion of competitiveness. This should be entrenched in the PSA targets or business plans of all government departments that take decisions that affect the competitiveness of business. To underpin this we believe that these departments should follow best-practice models employed elsewhere in government in terms of stakeholder engagement. Specifically we believe that each needs a dedicated interface for engaging with business.
Temple added: “Bringing these functions together, along with planning, into a single ‘Infrastructure Department’ could provide much needed focus to addressing the crucial challenges of improving the UK’s infrastructure.
“We recognise that there is an argument that infrastructure issues are linked to the climate change agenda and could be moved to DEFRA. This would be a mistake. These policy areas are critical to UK economic performance and should not be dominated by the environmental agenda alone.”
In its review, EEF also considered moving responsibility for skills to the DTI or its successor. However, on balance, it concluded that skills should stay in Department for Education & Skills given the importance of the relationship between skills and education. But both must have a strong relationship with business.
EEF (Engineering Employers Federation)
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