Weaknesses in how the Department for Business and Trade (DBT) supports UK industries must be addressed if government is to maximise the impact of its forthcoming Industrial Strategy and achieve its priority mission of growing the economy, according to a new National Audit Office (NAO) report.
In support of this priority, government announced a new Industrial Strategy in October 2024 and identified eight growth-driving sectors that can boost output and productivity growth over the long term.
DBT’s role is to support businesses, including those operating in these priority sectors, to invest, grow and export, creating jobs and opportunities across the country.
In the two years since it formed, DBT has done well to merge structures and teams from the former Department for Business, Energy and Industrial Strategy (BEIS) and Department for International Trade (DIT) and address its immediate skills gaps. It has engaged extensively with industry stakeholders to understand their needs and developed sector plans using its knowledge of the economy. It also shares its business intelligence widely across government.
However, DBT does not have a complete overview of what it and wider government spends supporting industry – hindering its ability to make sound decisions in the future and allocate resources strategically.
Gareth Davies, head of the NAO, said: “DBT was created to provide a ‘front door’ to the UK’s key industries, supporting government’s priority mission of growing the economy.
“It has made early headway, and now needs to build on its approach to supporting industry and make transparent, informed decisions about where best to deploy its resources.”
To date, DBT has not looked at its industry sector strategies collectively, with limited consideration of the trade-offs between different business support decisions and different sectors. This can make it difficult for stakeholders to understand DBT’s decision making, and for DBT to demonstrate how and why it is prioritising certain decisions over others. DBT also makes too little use of evidence of what works to inform its approach to developing new industry support initiatives.
Despite government’s ‘mission-driven’ approach and its stated aim to encourage cross-departmental ways of working, DBT is not always able to exert influence over other departments to achieve policy change that supports business.
And while DBT has taken steps to improve how it collaborates with other departments, a lack of clarity has caused frustration among some businesses regarding which department can best support their needs.
The success of the Industrial Strategy will depend on whether DBT and other government departments can work effectively together, and with industry, to prioritise and target interventions that drive growth in the priority sectors and across the whole economy.
The NAO recommends that DBT uses the forthcoming Industrial Strategy to review its operating model for supporting key industry sectors.
It should also clarify the metrics it uses, and the trade-offs it makes, when prioritising certain business support decisions over others; consider how it can collate its spending to support business in a more useful way; lean more heavily on evidence when making such decisions; and develop its approach to monitoring and evaluation to understand what works.
