Recommendations & Conclusions
51 items
2
Conclusion
34th Report - Department for Business a…
Accepted
Within the Overturned Convictions Scheme, there are a number of complex cases where claims have not yet been submitted, meaning ongoing delays in compensation for these individuals. The Overturned Convictions Scheme was set up to compensate those who had their convictions overturned by the courts. The scheme is separate from …
Read more
Within the Overturned Convictions Scheme, there are a number of complex cases where claims have not yet been submitted, meaning ongoing delays in compensation for these individuals. The Overturned Convictions Scheme was set up to compensate those who had their convictions overturned by the courts. The scheme is separate from the Horizon Convictions Redress Scheme, which was created to compensate those who had their convictions quashed via Government legislation. 4 There are 111 individuals eligible for financial redress through the Overturned Convictions Scheme. By 31 March 2025, 86 had submitted full and final claims, of which 69 had been paid, one had accepted an offer and was awaiting payment and a further 8 had received offers. The remaining 8 were awaiting offers from the Post Office. It is possible that claims may not be received for the remaining 25 eligible individuals until into 2026 due to the complexity of their cases. These individuals have received an interim payment of £200,000, with a further £250,000 payment to be made on receipt of a claim. With effect from 3 June 2025, the Department will take on direct responsibility for management of the scheme from the Post Office. There is a 3-month transition period underway to transfer the relevant data and handling of claims from the Post Office to the Department. recommendation The Department should outline how it plans to handle remaining cases under the Overturned Convictions Scheme, including how claims will be handled differently following the transition of the scheme from the Post Office to the Department.
Show less
Government response AI summary
The government confirmed the Overturned Convictions scheme claims transferred to the Horizon Convictions Redress Scheme (HCRS), which will operate with case management processes and an independent panel including Dentons and Sir Gary Hickinbottom. Further guidance on these roles and the Alternative Dispute Resolution process will …
Read full response →
HM Treasury
4
Conclusion
34th Report - Department for Business a…
Accepted
The Department’s efforts to recover fraud losses incurred through the Bounce Back Loan Scheme have been largely unsuccessful, with only a small fraction of losses recovered to date, for which the Department is unable to confirm the value. The Department has estimated it will incur a total loss of at …
Read more
The Department’s efforts to recover fraud losses incurred through the Bounce Back Loan Scheme have been largely unsuccessful, with only a small fraction of losses recovered to date, for which the Department is unable to confirm the value. The Department has estimated it will incur a total loss of at least £1.9 billion due to fraud within the Bounce Back Loan Scheme. The Department remains reliant primarily on lenders to recover losses due to fraud, despite the limited commercial incentives placed on those lenders due to the 100% guarantee provided. Of the amount paid by the Department to lenders under the guarantee, £130 million has been returned, but the Department is unable to confirm how much of this relates to fraud. The highest risk fraud cases were being passed to the National Investigation Service (NATIS) to investigate. But recoveries by NATIS have been minimal, with £8.6 million disclosed in the Department’s Annual Report and Accounts for 2023–24. The significant level of fraud within the Bounce Back Loan Scheme has been well known for years and has been subject to previous scrutiny by this Committee. The low value of recoveries, and the lack of clarity on the value of recoveries that relate to cases of suspected fraud, indicate that the actions taken to date by the Department have not been adequate. Following our evidence session in April, on 15 May 2025 the Department announced that its review of NATIS’ performance had shown public money was not being spent effectively, that NATIS would be audited to determine accurate figures for fraud recovery, and that the Insolvency Service will take over NATIS’s viable investigation cases. recommendation a. The Department should write to the Committee to provide the key findings from the NATIS audit, including the value of recoveries. b. The Department should write to the Committee in one year, to provide information on the performance of the Insolvency Service in recovering amounts lost due to fraud. 6
Show less
Government response AI summary
The government agrees and commits to writing to the Committee in one year to provide obtainable information on the Insolvency Service's performance in recovering fraud losses from the Bounce Back Loan Scheme. It did not address the request for NATIS audit findings.
Read full response →
HM Treasury
5
Recommendation
34th Report - Department for Business a…
Accepted
The restructuring process which created the Department left it insufficiently resourced to deliver its 2023–24 Annual Report and Accounts on a timely basis and unable to establish appropriate controls and processes across the 2023–24 financial year. The Department inherited limited finance staff from the former Department for Business, Energy and …
Read more
The restructuring process which created the Department left it insufficiently resourced to deliver its 2023–24 Annual Report and Accounts on a timely basis and unable to establish appropriate controls and processes across the 2023–24 financial year. The Department inherited limited finance staff from the former Department for Business, Energy and Industrial Strategy and initially relied on the finance team of the former Department for International Trade. The accounts of the new Department are significantly more complex than the accounts of the former Department for International Trade, including hard to value assets and liabilities, and requiring the consolidation of 19 Partner Organisations. The Government Internal Audit Agency was only able to issue a limited assurance opinion for 2023–24, noting that further work was required to strengthen controls, capability and capacity following the restructure. The Department has undertaken a lessons learned exercise and has a clear plan for the laying of its 2024–25 accounts in September 2025 and for its 2025–26 accounts to be laid before Parliament’s 2026 summer recess. recommendation The Department should provide a written update to the Committee if it expects that its planned dates for laying its accounts before Parliament will not be met. If so, it should set out the reasons why, and what actions it is taking to address the problems. 7 1 Horizon Compensation Schemes Introduction
Show less
Government response AI summary
The government agrees to provide a written update if planned dates for laying accounts are missed, and confirms that the Annual Report and Accounts production is currently on target for September publication.
Read full response →
HM Treasury
1
Conclusion
34th Report - Department for Business a…
Accepted
On the basis of its Annual Report and Accounts 2023–24, we took evidence from the Department for Business and Trade (the Department).1 We focused on the Horizon Compensation Schemes, Bounce Back Loan Scheme, and the preparation of its the Annual Report and Accounts.
Read more
On the basis of its Annual Report and Accounts 2023–24, we took evidence from the Department for Business and Trade (the Department).1 We focused on the Horizon Compensation Schemes, Bounce Back Loan Scheme, and the preparation of its the Annual Report and Accounts.
Show less
Government response AI summary
The government commits to finalising letters for remaining Horizon Shortfall Scheme (HSS) claimants by September 2025, reviewing the recommended HSS closure date and responding by October 10, 2025. It also plans to write to all individuals eligible for the Horizon Convictions Redress Scheme (HCRS) who …
Read full response →
HM Treasury
6
Conclusion
34th Report - Department for Business a…
Accepted
For the 2023–24 external audit, the Comptroller & Auditor General (C&AG) recorded a qualified opinion on the Department’s accounts due to the Department being unable to obtain sufficient appropriate evidence that the value of provisions for the HSS and HCRS were free from material misstatement. This was due to the …
Read more
For the 2023–24 external audit, the Comptroller & Auditor General (C&AG) recorded a qualified opinion on the Department’s accounts due to the Department being unable to obtain sufficient appropriate evidence that the value of provisions for the HSS and HCRS were free from material misstatement. This was due to the schemes being at an early stage of receiving and settling claims.5 The HSS had a provision of £671 million and the HCRS had a provision of £698 million in the 2023–24 Annual Report and Accounts.6 We were concerned with the progress of these schemes and the likelihood of being able to lift qualifications in the short term.7
Show less
Government response AI summary
The government agrees with the committee's concern regarding the qualified audit opinion due to Horizon scheme provisions. It commits to finalizing HSS letters by September 2025, reviewing the HSS closure date recommendation by October 2025, and writing to unregistered HCRS individuals by September 2025 to …
Read full response →
HM Treasury
7
Conclusion
34th Report - Department for Business a…
Accepted
In the Department’s 2023–24 Annual Report and Accounts, it estimated that £866 million of the combined Horizon Schemes provisions would be settled within 1 year.8 In a letter provided after our oral evidence session, the Department confirmed that it paid a total of £701 million in scheme settlements during 2024–25, …
Read more
In the Department’s 2023–24 Annual Report and Accounts, it estimated that £866 million of the combined Horizon Schemes provisions would be settled within 1 year.8 In a letter provided after our oral evidence session, the Department confirmed that it paid a total of £701 million in scheme settlements during 2024–25, of which £552 million had been included in the provision in the 2023–24 Accounts.9 The payment figures therefore fell short of the expectations set in the 2023–24 Annual Report and Accounts.10
Show less
Government response AI summary
The government agrees with the committee's observation. It commits to finalising and sending letters to remaining Horizon Shortfall Scheme claimants by September 2025 and will write to unregistered Horizon Convictions Redress Scheme claimants by the end of September 2025. It is also reviewing a recommended …
Read full response →
HM Treasury
8
Conclusion
34th Report - Department for Business a…
Accepted
For the Horizon Shortfall Scheme (HSS), the main uncertainty when calculating the overall settlement provision is regarding the volume of claimants. The Department told us that in order to establish the number of eligible claimants, the Post Office is writing to postmasters to make them aware of the Scheme and …
Read more
For the Horizon Shortfall Scheme (HSS), the main uncertainty when calculating the overall settlement provision is regarding the volume of claimants. The Department told us that in order to establish the number of eligible claimants, the Post Office is writing to postmasters to make them aware of the Scheme and how to apply.11 The Department confirmed that as of 31 March 2025, 18,528 letters had been sent, with approximately a further 5,000 expected to be sent in 2025 to those not yet contacted. The response rate as of 31 March 2025 was 21% but the Post Office estimates that this will 4 Horizon Convictions Redress Scheme, HLWS43, 30 July 2024 5 DBT ARA 2023–24, pp 108-110 6 DBT ARA 2023–24, pp 107-110, 202-203 7 Q 1 8 DBT ARA 2023–24, p 200. ‘Combined Horizon Schemes provisions’ is reported under the headings ‘Post Office Limited’ and ‘Postmaster redress’. 9 Correspondence from Department for Business and Trade, 2 May 2025 10 Qq 12-15 11 Q 3 9 rise to between 25% and 30%.12 On the value per claim, the Department told us it has greater certainty over this figure, with 98% of applicants accepting the £75,000 settlement option.13
Show less
Government response AI summary
The government agrees with the committee's observations on the HSS and commits to finalizing letters to remaining eligible claimants by September 2025. It will also review the proposed HSS closure date by October 2025 and write to all unregistered HCRS individuals by September 2025 to …
Read full response →
HM Treasury
9
Conclusion
34th Report - Department for Business a…
Accepted
For the HCRS, the Department told us that the uncertainty within this scheme relates to the value per claim, rather than the number of claimants. The Department told us that justice authorities (Ministry of Justice, Justice Directorate Scotland and the Department of Justice Northern Ireland) had issued letters to the …
Read more
For the HCRS, the Department told us that the uncertainty within this scheme relates to the value per claim, rather than the number of claimants. The Department told us that justice authorities (Ministry of Justice, Justice Directorate Scotland and the Department of Justice Northern Ireland) had issued letters to the approximately 800 individuals who have had their convictions quashed.14 As of 31 March 2025, 536 individuals have applied and 339 had accepted the fixed and final sum of £600,000.15 The Department told us that lawyers representing claimants have indicated that about 85% of those applying to the scheme will accept the £600,000 offer. Other participants in the scheme were deciding whether to accept the fixed sum or go through the detailed assessment process. The Department told us it expects that the first itemised claims for full assessment are unlikely to be received until early autumn 2025, due to claimants seeking external advice relevant to their claims. The Department explained that as these cases are more complex, the spread of potential payments is far greater.16
Show less
Government response AI summary
The government agrees with the committee's implicit recommendation, setting an Autumn 2025 target. It will finalise letters for the Horizon Shortfall Scheme (HSS) by September 2025, review a recommended HSS closure date, and write to eligible HCRS individuals by end of September 2025 to encourage …
Read full response →
HM Treasury
10
Conclusion
34th Report - Department for Business a…
Accepted
The Department told us that it is confident the level of uncertainty over the number of potential claimants in HSS will reduce over the 2025–26 financial year. The uncertainty over the number of potential claimants within the HSS was a key reason for the C&AG’s qualification of the Annual Report …
Read more
The Department told us that it is confident the level of uncertainty over the number of potential claimants in HSS will reduce over the 2025–26 financial year. The uncertainty over the number of potential claimants within the HSS was a key reason for the C&AG’s qualification of the Annual Report and Accounts 2023–24. For HCRS, the uncertainty over the claim values was a key reason for the C&AG’s qualification.17 The Department confirmed there is ongoing uncertainty over the value of the smaller number of fully assessed claims within the HCRS, as they are expected to take longer to resolve.18
Show less
Government response AI summary
The government agrees with the committee's implicit recommendation for reducing uncertainty in the redress schemes, setting an Autumn 2025 target. It will finalise letters for the Horizon Shortfall Scheme (HSS) by September 2025, review a recommended HSS closure date, and write to HCRS eligible individuals …
Read full response →
HM Treasury
12
Conclusion
34th Report - Department for Business a…
Accepted
Following feedback from scheme applicants and the Business and Trade Select Committee in its report published January 2025, the Department has agreed to take on direct responsibility for management of the OC Scheme from 3 June 2025.23 There is a 3-month transition period underway to ensure continuity of service and …
Read more
Following feedback from scheme applicants and the Business and Trade Select Committee in its report published January 2025, the Department has agreed to take on direct responsibility for management of the OC Scheme from 3 June 2025.23 There is a 3-month transition period underway to ensure continuity of service and to transfer the relevant information the Department needs from the Post Office. The Department told us progress during the transition has been positive, that it has had early engagement with the Post Office and good pre-existing relationships with the claimants’ lawyers.24
Show less
Government response AI summary
The government agrees with the committee's implicit recommendation, confirming that from June 3rd, 2025, the Overturned Convictions (OC) scheme claims transferred to the Department-delivered Horizon Convictions Redress Scheme (HCRS). The HCRS will apply the same principles, and further guidance on case management and alternative dispute …
Read full response →
HM Treasury
13
Conclusion
34th Report - Department for Business a…
Accepted
As part of the scheme administration, the Department told us it has employed Sir Gary Hickinbottom, a former judge, to hold case management hearings and work through areas of disagreement between claimants and the Post Office or Department. Sir Gary Hickinbottom has been praised by the Business and Trade Committee …
Read more
As part of the scheme administration, the Department told us it has employed Sir Gary Hickinbottom, a former judge, to hold case management hearings and work through areas of disagreement between claimants and the Post Office or Department. Sir Gary Hickinbottom has been praised by the Business and Trade Committee for his support in case management.25
Show less
Government response AI summary
The government confirms Sir Gary Hickinbottom's continued role in case management within the new Horizon Convictions Redress Scheme (HCRS) and commits to publishing further guidance on his role and the Alternative Dispute Resolution process by the end of Summer 2025.
Read full response →
HM Treasury
14
Conclusion
34th Report - Department for Business a…
Accepted
According to the Department, there are 111 individuals eligible for financial redress through the OC scheme. As at 31 March 2025, 86 had submitted full and final claims, of which 69 had been paid, 1 had accepted an offer and was awaiting payment and a further 8 had received offers. …
Read more
According to the Department, there are 111 individuals eligible for financial redress through the OC scheme. As at 31 March 2025, 86 had submitted full and final claims, of which 69 had been paid, 1 had accepted an offer and was awaiting payment and a further 8 had received offers. The remaining 8 were awaiting offers from the Post Office.26
Show less
Government response AI summary
The government agrees with the committee's report on the OC scheme's progress, confirming the OC scheme closed on June 3, 2025, with claims transferred to the HCRS under the same principles. It commits to publishing further guidance on the HCRS processes, Dentons' and Sir Gary …
Read full response →
HM Treasury
15
Conclusion
34th Report - Department for Business a…
Accepted
The Department told us it is possible that claims may not be received for the remaining 25 eligible individuals until into 2026 due to the complexity of their cases. The Department hopes however that these 25 individuals will feel more comfortable in engaging in the process once it is no …
Read more
The Department told us it is possible that claims may not be received for the remaining 25 eligible individuals until into 2026 due to the complexity of their cases. The Department hopes however that these 25 individuals will feel more comfortable in engaging in the process once it is no longer 20 Q 8 21 Correspondence from Department for Business and Trade, 2 May 2025 22 Q 10 23 HC 341 Post Office and Horizon scandal redress: Unfinished business, 1 January 2025; HC 778 Post Office Horizon scandal redress: Unfinished business: Government response, 25 March 2025 24 Qq 16, 20 25 Post Office and Horizon scandal redress: Unfinished business 26 DBT, Post Office Horizon financial redress data as of 31 March 2025, May 2025 11 managed by the Post Office.27 The Department told us that these individuals have received an interim payment of £200,000, with a further £250,000 payment to be made on receipt of a claim.28 Financial sustainability of the Post Office
Show less
Government response AI summary
The government has transferred claims to the new Department-delivered Horizon Convictions Redress Scheme (HCRS) from June 2025, outlining enhanced case management processes and committing to publish further guidance by the end of Summer 2025 to address complex cases and improve claimant engagement.
Read full response →
HM Treasury
16
Conclusion
34th Report - Department for Business a…
Accepted
The Post Office is wholly owned by the Department, although the Department does not have responsibility for the day-to-day running of the Post Office. The Department supports the Post Office through the funding of all Horizon redress compensation schemes. However, this funding alone is insufficient to guarantee the financial stability …
Read more
The Post Office is wholly owned by the Department, although the Department does not have responsibility for the day-to-day running of the Post Office. The Department supports the Post Office through the funding of all Horizon redress compensation schemes. However, this funding alone is insufficient to guarantee the financial stability of the Post Office. The Department provides an annual ‘Letter of Support’ to the Post Office, giving assurance that the Department will deliver financial support to help the organisation meet is liabilities as they fall due. The existence of the Letter of Support and a summary of the assurance it provides is disclosed in both the Department and Post Office Annual Report and Accounts. The Post Office Board places significant reliance on this letter annually when stating the Post Office is a going concern.29
Show less
Government response AI summary
The government commits to writing to the Committee in Autumn 2025, following the publication of the Treasury Minute, concerning the Post Office's financial stability and the ongoing reliance on the annual Letter of Support.
Read full response →
HM Treasury
20
Conclusion
34th Report - Department for Business a…
Accepted
The Department told us that it has confidence in the Post Office’s short- term liquidity, through the assurance provided by UKGI and that there is a longer-term question regarding the financial viability of the Post Office. The Department told us that it is looking at the policy objectives, the most …
Read more
The Department told us that it has confidence in the Post Office’s short- term liquidity, through the assurance provided by UKGI and that there is a longer-term question regarding the financial viability of the Post Office. The Department told us that it is looking at the policy objectives, the most cost-effective way of funding the Post Office and the most efficient way to achieve that in order to put the Post Office onto a long-term footing.34
Show less
Government response AI summary
The government commits to writing to the Committee in Autumn 2025, following the publication of the Treasury Minute, implying an update on the Post Office's long-term financial viability which the Department is actively addressing.
Read full response →
HM Treasury
21
Conclusion
34th Report - Department for Business a…
Accepted
The Department did not consider the Letter of Support to require separate notification to Parliament in line with the requirements of Managing Public Money on the basis of the following:35 • Issuing the Letter of Support is not outside of the Department’s normal course of business • The Department does …
Read more
The Department did not consider the Letter of Support to require separate notification to Parliament in line with the requirements of Managing Public Money on the basis of the following:35 • Issuing the Letter of Support is not outside of the Department’s normal course of business • The Department does not deal with Post Office on a commercial basis • The size of the liability (excluding redress which has separate budgetary cover) is not large relative to the Department’s overall budget • Issuing the letter is neither novel, contentious nor repercussive.
Show less
Government response AI summary
The government commits to providing a formal notification to the Committee when the Letter of Comfort to the Post Office Limited is issued, with a target implementation date of Winter 2025.
Read full response →
HM Treasury
22
Recommendation
34th Report - Department for Business a…
Accepted
Managing Public Money explains that whilst departments may make commitments to future expenditure without explicit parliamentary authority, Parliament should be notified of the existence of these commitments on a 31 DBT ARA 2023–24, p 154 32 Q 21 33 Correspondence from Department for Business and Trade, 2 May 2025 34 …
Read more
Managing Public Money explains that whilst departments may make commitments to future expenditure without explicit parliamentary authority, Parliament should be notified of the existence of these commitments on a 31 DBT ARA 2023–24, p 154 32 Q 21 33 Correspondence from Department for Business and Trade, 2 May 2025 34 Q 23 35 Correspondence from Department for Business and Trade, 2 May 2025 13 timely basis. Best practice is to do this via a Written Ministerial Statement and Departmental Minute.36 In this instance, the Department included disclosures regarding the Letter of Support in its 2023–24 Annual Report and Accounts that were published in January 2025, relatively soon after the Letter of Support had been issued.37 In written correspondence after the session the Department agreed to notify the Committee of the next Letter of Support when it is issued.38 36 HM Treasury, Managing Public Money, May 2023, para A5.4.27 37 DBT ARA 2023–24, p 154 38 Correspondence from Department for Business and Trade, 2 May 2025 14 2 Bounce Back Loans Scheme Introduction
Show less
Government response AI summary
The government agrees with the recommendation and commits to formally notifying the Committee when the Letter of Comfort to the Post Office Limited is issued, with a target implementation date of Winter 2025.
Read full response →
HM Treasury
25
Conclusion
34th Report - Department for Business a…
Accepted
As at 31 March 2024, there remained 1.03 million loans outstanding, to a value of £17.8 billion.41 The Department estimates that total losses to the taxpayer due to fraud in the scheme will be at least £1.9 billion over its lifetime.42 For the purposes of fraud investigation, the Department grouped …
Read more
As at 31 March 2024, there remained 1.03 million loans outstanding, to a value of £17.8 billion.41 The Department estimates that total losses to the taxpayer due to fraud in the scheme will be at least £1.9 billion over its lifetime.42 For the purposes of fraud investigation, the Department grouped suspected fraudulent loans into tiers. The largest cases are passed to the National Investigation Service (NATIS), a fraud investigation service provided by Thurrock Council. Other cases were left to commercial lenders to investigate, who the Department regard to be experts in this field.43 39 The Insolvency Service, Factsheet: Bounce Back Loans, March 2022 40 C&AG’s Report, Bounce Back Loan Scheme: an update, Session 2021–22, HC 861, 3 December 2021, pp 5-8 41 DBT, COVID-19 loan guarantee schemes performance data as at 31 March 2024, August 2024 42 DBT ARA 2023 to 2024, p 105 43 C&AG’s Report, Bounce Back Loan Scheme: an update, Session 2021–22, HC 861, 3 December 2021, p 11 15 Recovery of fraud losses
Show less
Government response AI summary
The government commits to providing key findings from the National Investigation Service (NATIS) audit, including recovery values, by August 2026 and information on the Insolvency Service's performance in recovering fraud losses by July 2026, addressing concerns about BBLS fraud investigations.
Read full response →
HM Treasury
26
Conclusion
34th Report - Department for Business a…
Accepted
The Department has estimated that total losses due to fraud on the BBLS will be at least £1.9 billion. This figure is the sum of losses on defaulted loans that lenders have reported as suspected fraud, and future losses estimated by the Department by applying its suspected fraud loss rate …
Read more
The Department has estimated that total losses due to fraud on the BBLS will be at least £1.9 billion. This figure is the sum of losses on defaulted loans that lenders have reported as suspected fraud, and future losses estimated by the Department by applying its suspected fraud loss rate to the open loan book. The Department has acknowledged that not all cases of fraud will have been identified by lenders and that total losses due to fraud will exceed the figure quoted.44
Show less
Government response AI summary
The government acknowledges the estimated £1.9 billion BBLS fraud losses and commits to providing key findings from the National Investigation Service (NATIS) audit by August 2026, along with information on the Insolvency Service's performance in recovering fraud losses by July 2026.
Read full response →
HM Treasury
28
Conclusion
34th Report - Department for Business a…
Accepted
The Department told us that it is tackling fraud in a range of ways. These include the in-house fraud team which oversees all the counter-fraud activity, an audit and assurance process carried out by BBB with oversight from a Board, which includes representatives from the Treasury and Cabinet Office as …
Read more
The Department told us that it is tackling fraud in a range of ways. These include the in-house fraud team which oversees all the counter-fraud activity, an audit and assurance process carried out by BBB with oversight from a Board, which includes representatives from the Treasury and Cabinet Office as well as BBB and the Department.46
Show less
Government response AI summary
The government agrees and commits to reducing taxpayer loss from BBLS fraud by transferring cases to the Insolvency Service for recovery, commissioning an audit of recovery efforts with findings due by August 2026, and reporting back on performance in one year.
Read full response →
HM Treasury
29
Conclusion
34th Report - Department for Business a…
Accepted
The Department explained that it also outsources the most complex cases to a provider, to follow up on the most extreme and serious cases of fraud. These cases are complex and detailed, and take a while to appear as a recovery.47 The Department’s Annual Report and Accounts states that its …
Read more
The Department explained that it also outsources the most complex cases to a provider, to follow up on the most extreme and serious cases of fraud. These cases are complex and detailed, and take a while to appear as a recovery.47 The Department’s Annual Report and Accounts states that its external partner, NATIS, recovered £8.6 million from the BBLS in 2023–24.48
Show less
Government response AI summary
The government commits to providing key findings from the National Investigation Service (NATIS) audit, including the value of recoveries, to the Committee by August 2026, and will provide an update on the Insolvency Service's performance in recovering fraud losses by July 2026.
Read full response →
HM Treasury
30
Conclusion
34th Report - Department for Business a…
Accepted
The Department explained that the first and primary responsibility for chasing fraud remains with the lenders. Due to the 100% guarantee provided to lenders under the BBLS, the incentive is not there to recover fraudulent loans. The Department has, however, worked with lenders to recoup some of the losses.49
Read more
The Department explained that the first and primary responsibility for chasing fraud remains with the lenders. Due to the 100% guarantee provided to lenders under the BBLS, the incentive is not there to recover fraudulent loans. The Department has, however, worked with lenders to recoup some of the losses.49
Show less
Government response AI summary
The government agrees with the committee's finding regarding the lack of lender incentive for BBLS fraud recovery, detailing actions like the Insolvency Service taking over fraud cases, commissioning an audit by August 2026, and providing a progress report in one year.
Read full response →
HM Treasury
31
Conclusion
34th Report - Department for Business a…
Accepted
The Department told us that as a result of assurance activity which has involved data and analytics, £1.1 billion of loans have been withdrawn from guarantee cover, meaning that any losses on these loans are borne by the 44 DBT ARA 2023 to 2024, pp 105-106 45 Q 27 46 …
Read more
The Department told us that as a result of assurance activity which has involved data and analytics, £1.1 billion of loans have been withdrawn from guarantee cover, meaning that any losses on these loans are borne by the 44 DBT ARA 2023 to 2024, pp 105-106 45 Q 27 46 Q 27 47 Q 27 48 DBT ARA 2023 to 2024, p 39 49 Q 27 16 lender rather than by the taxpayer. The Department withdraws loans from guarantee cover where it feels that the lender has not done all that it should have done. The Department told us that it considers its lender assurance activity and the removal of loans from guarantee cover to be an incentive for lenders to maximise recoveries.50 The £1.1 billion figure quoted by the Department is the value of loans removed from guarantee cover across all of its Covid loan guarantee schemes; statistics published by the Department confirm that the value of BBLS loans where the guarantee has been removed is £376 million.51
Show less
Government response AI summary
The government agrees with the committee's observation on lender assurance and outlines specific actions to tackle BBLS fraud, including the Insolvency Service taking over cases, commissioning an audit by August 2026, and reporting on recovery performance in one year.
Read full response →
HM Treasury
32
Conclusion
34th Report - Department for Business a…
Accepted
The Department told us that at the time the BBLS was set up, the real worry was the number of businesses which could fail, and up to around half a million businesses were sustained by the intervention. However, the scheme design does not help in terms of tackling fraud and …
Read more
The Department told us that at the time the BBLS was set up, the real worry was the number of businesses which could fail, and up to around half a million businesses were sustained by the intervention. However, the scheme design does not help in terms of tackling fraud and error.52
Show less
Government response AI summary
The government agrees with the committee's finding regarding the BBLS design's weakness in tackling fraud, committing to actions including the Insolvency Service taking over fraud cases, commissioning an audit by August 2026, and reporting on recovery performance in one year.
Read full response →
HM Treasury
33
Conclusion
34th Report - Department for Business a…
Accepted
We wrote to the Department, following our evidence session on 7 April, to obtain greater clarity on the value of losses to fraud that have since been recovered. We specifically requested the value of losses recovered which were incurred due to suspected fraud within the BBLS. We requested that this …
Read more
We wrote to the Department, following our evidence session on 7 April, to obtain greater clarity on the value of losses to fraud that have since been recovered. We specifically requested the value of losses recovered which were incurred due to suspected fraud within the BBLS. We requested that this be split by method of recovery, distinguishing between amounts recovered by lenders, and those recovered by other enforcement activity. The Department responded that £130 million paid to lenders under the guarantee had subsequently been repaid by them, but it could not confirm how much of this £130 million related to cases of suspected fraud, or how much related to lender recoveries or Department-led enforcement activities.53
Show less
Government response AI summary
The government acknowledges the Department's inability to confirm BBLS fraud recovery values and commits to providing key findings from the National Investigation Service (NATIS) audit by August 2026, and information on the Insolvency Service's performance in recovering fraud losses by July 2026.
Read full response →
HM Treasury
34
Conclusion
34th Report - Department for Business a…
Accepted
On 15 May 2025 the Minister for Services, Small Business and Exports issued a statement announcing that the Department will not renew the contract with NATIS, instead the Insolvency Service will take over the remaining casework.54 In the accompanying press release the Department confirmed that the decision to appoint NATIS …
Read more
On 15 May 2025 the Minister for Services, Small Business and Exports issued a statement announcing that the Department will not renew the contract with NATIS, instead the Insolvency Service will take over the remaining casework.54 In the accompanying press release the Department confirmed that the decision to appoint NATIS has cost the taxpayer approximately £38.5m, resulting in only 14 convictions, with the amount recovered unclear. The Department confirmed problems with NATIS governance and reporting of recoveries, that public money was not being spent effectively, and that the Insolvency Service would take over NATIS’s viable investigation cases. The Government Internal Audit Agency (GIAA) has been asked to conduct an additional audit of NATIS to determine and report accurate recovery figures.55 50 Qq 27, 30 51 DBT, COVID-19 loan guarantee schemes performance data as at 31 March 2024, August 2024 52 Q 31 53 Correspondence from Department for Business and Trade, 2 May 2025 54 Transition of services from NATIS to the Insolvency service, 15 May 2025 55 DBT, Covid fraud investigations to be led by Insolvency Service, 15 May 2025 17 3 Production of the Department’s 2023–24 accounts Introduction
Show less
Government response AI summary
The government agrees with the implicit recommendations. It commits to providing key findings from the NATIS audit by August 2026 and information on the Insolvency Service's performance in recovering fraud losses by July 2026.
Read full response →
HM Treasury
36
Conclusion
34th Report - Department for Business a…
Accepted
Government departments prepare financial statements in accordance with the International Financial Reporting Standards (IFRS) and the Government Financial Reporting Manual (FReM).57 As a result of the inclusion of the balances and transactions relating to the business-focused elements of BEIS the Department was required to prepare financial statements which were wider …
Read more
Government departments prepare financial statements in accordance with the International Financial Reporting Standards (IFRS) and the Government Financial Reporting Manual (FReM).57 As a result of the inclusion of the balances and transactions relating to the business-focused elements of BEIS the Department was required to prepare financial statements which were wider in scope and complexity when compared to those of DIT. These financial statements also include financial information relating to arm’s length bodies the Department is responsible for, known as a ‘departmental group’. The DIT ‘departmental group’ comprised the core department and one arm’s length body, the Trade Remedies Authority. As part of the changes, the Department became responsible for eighteen further bodies which vary in scale and include the British Business Bank, Companies House and the Insolvency Service.58
Show less
Government response AI summary
The government agrees with the committee's observation regarding the wider scope and complexity of the department's financial statements. It commits to publishing the Annual Report and Accounts, including these complex elements, by September 2025.
Read full response →
HM Treasury
37
Conclusion
34th Report - Department for Business a…
Accepted
HM Treasury sets timetable expectations for the laying of Departmental resource accounts before Parliament in a ‘Dear Accounting Officer’ letter. This provides direction to Accounting Officers of Departments and other public bodies on preparing their Annual Report and Accounts under IFRS and the FReM. The 2023–24 letter set out that …
Read more
HM Treasury sets timetable expectations for the laying of Departmental resource accounts before Parliament in a ‘Dear Accounting Officer’ letter. This provides direction to Accounting Officers of Departments and other public bodies on preparing their Annual Report and Accounts under IFRS and the FReM. The 2023–24 letter set out that “Departments should aim to lay resource accounts [ … ] by the administrative deadline of 30 June 2024 56 HMG, Making Government Deliver for the British People, February 2023, p 6 57 HM Treasury, DAO 02/24 - Accounts Directions 2023–24, June 2024 58 DBT ARA 2023–24, p 8 18 where possible, and no later than the parliamentary summer recess”.59 The Department published its first set of accounts, for the year ended 31 March 2024, on 30 January 2025–ten months following the financial year end, and seven months after HM Treasury’s administrative deadline.60 The Production of the 2023–24 accounts and the Department’s plan for future accounts
Show less
Government response AI summary
The government agrees with the committee's finding on missed deadlines, committing to a September 2025 target publication date for future Annual Report and Accounts and pledging to inform the committee if this deadline is likely to be missed.
Read full response →
HM Treasury
39
Conclusion
34th Report - Department for Business a…
Accepted
The Department explained challenges it faced in being required to merge the financial information of its predecessor departments to present three years of financial information. As instructed by the FReM, the Department was required to restate comparatives for the previous period in accordance with IAS 1 Presentation of Financial Statements.62 …
Read more
The Department explained challenges it faced in being required to merge the financial information of its predecessor departments to present three years of financial information. As instructed by the FReM, the Department was required to restate comparatives for the previous period in accordance with IAS 1 Presentation of Financial Statements.62 This required the production and audit of three statements of financial position, in addition to comparatives for all other relevant statements and notes in the financial statements and comparatives in the Annual Report. The Department described the amount of work to produce and audit this information as a “huge endeavour”.63
Show less
Government response AI summary
The government agrees with the committee's observation on the challenges of merging financial information for accounts, setting a September 2025 target for future publications and promising to notify the committee if that deadline faces risk.
Read full response →
HM Treasury
40
Conclusion
34th Report - Department for Business a…
Accepted
The Department said that the increased complexity of its accounts when compared to those of DIT was driven by balances moving across from BEIS.64 These balances had to be accounted for to a much higher level of precision due to the accounting concept of ‘materiality’. The materiality level set in …
Read more
The Department said that the increased complexity of its accounts when compared to those of DIT was driven by balances moving across from BEIS.64 These balances had to be accounted for to a much higher level of precision due to the accounting concept of ‘materiality’. The materiality level set in BEIS for the audit of the Core Department was £575 million.65 The new department’s gross expenditure is significantly lower than that spent by BEIS and accordingly, the materiality level for the 2023–24 accounts of the Department was £43.5 million.66 This meant that some 59 HM Treasury, DAO 06/23 - Accounts Directions 2023–24, December 2023 60 DBT ARA 2023–24 61 Q 35 62 HM Treasury, Government Financial Reporting Manual: 2023–24, December 2023, p 84 63 Q 35 64 Q 35 65 BEIS, Annual report and accounts 2022 to 2023, p 179 66 DBT ARA 2023–24, p 123 19 balances which were previously immaterial in BEIS became highly material to the new department, necessitating increased work by the Department’s finance team.
Show less
Government response AI summary
The government agrees with the Committee's observation and confirms that Annual Report and Accounts production and audit are progressing well, on target for a September 2025 publication, and will inform the Committee if the deadline is at risk.
Read full response →
HM Treasury
42
Conclusion
34th Report - Department for Business a…
Accepted
The third reason given by the Department for delays to the completion of its 2023–24 accounts was the Post Office provisions. This was due to: the complexity in estimating the provision liabilities; the effort required to justify those estimates; and the need to ensure the alignment of estimates with the …
Read more
The third reason given by the Department for delays to the completion of its 2023–24 accounts was the Post Office provisions. This was due to: the complexity in estimating the provision liabilities; the effort required to justify those estimates; and the need to ensure the alignment of estimates with the Post Office Limited’s own accounts.73 As set out earlier in this report, the C&AG qualified his opinion on two of the compensation scheme provisions. This was due to the significant uncertainty associated with the value and volume of future redress payments and the limited data available to support the Department’s assumptions.74
Show less
Government response AI summary
The government agrees with the committee's conclusion regarding the complexities of Post Office provisions delaying accounts. It commits to finalizing HSS letters by September 2025, reviewing the HSS closure date recommendation by October 2025, and writing to unregistered HCRS individuals by September 2025 to encourage …
Read full response →
HM Treasury
43
Conclusion
34th Report - Department for Business a…
Accepted
The Department stated that it has worked to bring forward the delivery of its 2024–25 accounts to September 2025, a four-month improvement in timeliness. To do so, the Department said it had performed a significant lessons-learned exercise alongside the National Audit Office and increased the capability and capacity of its …
Read more
The Department stated that it has worked to bring forward the delivery of its 2024–25 accounts to September 2025, a four-month improvement in timeliness. To do so, the Department said it had performed a significant lessons-learned exercise alongside the National Audit Office and increased the capability and capacity of its finance team. HM Treasury’s accounts direction for the 2024–25 resource accounts retains the equivalent deadlines 67 Q 35 68 Department for International Trade, Annual report and accounts 2022 to 2023, July 2023, p 179 69 DBT ARA 2023–24, p 133 70 Q 37 71 Q 35 72 Q 40 73 Q 35 74 National Audit Office, Department for Business and Trade Annual Report and Accounts 2023–24, January 2025 20 as for 2023–24.75 The Department acknowledged that the knock-on impact of the late delivery of the 2023–24 accounts means it will fail to deliver the 2024–25 accounts on time and in accordance with the directions.76 National Audit Office guidance on achieving high quality, timely and efficient audits states “timely reporting supports Parliamentary scrutiny of public spending and gives the public assurance over the way in which public money is being used.”77 The delayed publication of the Department’s accounts therefore undermines Parliamentary scrutiny and the public’s assurance over the spending of public money. The Department stated that it has agreed a detailed timetable and expectations with the National Audit Office to achieve the September laying of its 2024–25 accounts. The Department aims to publish its 2025–26 accounts in line with the timetable set out in HM Treasury’s accounts directions, which would mean in time for the parliamentary summer recess.78
Show less
Government response AI summary
The government agrees with the Committee's observation, stating that the Annual Report and Accounts production is on target for a September 2025 publication and commits to informing the Committee should this deadline be missed.
Read full response →
HM Treasury
44
Conclusion
34th Report - Department for Business a…
Accepted
Alongside producing a more complex set of accounts in a timely manner, the Machinery of Government change meant that the Department had to develop a new framework of governance, risk management and control for an organisation comprised of teams from the former DIT and BEIS. There was a further need …
Read more
Alongside producing a more complex set of accounts in a timely manner, the Machinery of Government change meant that the Department had to develop a new framework of governance, risk management and control for an organisation comprised of teams from the former DIT and BEIS. There was a further need to put in place a system of common and consistent controls where previously teams had worked in differing control environments.79
Show less
Government response AI summary
The government acknowledges the challenges of developing new governance and control frameworks due to Machinery of Government changes, stating that Annual Report and Accounts production and audit are on target for September 2025 and committing to inform the Committee if this deadline is missed.
Read full response →
HM Treasury
46
Conclusion
34th Report - Department for Business a…
Accepted
The GIAA highlighted six themes which required action to strengthen controls: Machinery of Government Change; Capacity and Capability; Governance; Strategy and Business Planning; First Line of Defence; and 75 HM Treasury, DAO 03/24 Accounts Directions 2024–25, January 2025 76 Q 35 77 National Audit Office, Working together to achieve high …
Read more
The GIAA highlighted six themes which required action to strengthen controls: Machinery of Government Change; Capacity and Capability; Governance; Strategy and Business Planning; First Line of Defence; and 75 HM Treasury, DAO 03/24 Accounts Directions 2024–25, January 2025 76 Q 35 77 National Audit Office, Working together to achieve high quality, timely and efficient audits, February 2025, p 5 78 Q 35 79 DBT ARA 2023–24, p 53 80 Definitions for each of these assurance conclusions can be found within: Cabinet Office, Government efficiencies and savings (2022/23): Technical note, January 2025 81 DBT ARA 2023–24, p 55 21 Second Line of Defence. The Department stated in its Governance Statement that the Machinery of Government changes were a contributary factor for all themes identified.82
Show less
Government response AI summary
The government agrees with the committee's implicit recommendation to address themes requiring action to strengthen controls, setting a September 2025 target date for the Annual Report and Accounts publication, which it states is progressing well and on target.
Read full response →
HM Treasury
47
Conclusion
34th Report - Department for Business a…
Accepted
The Department said that the need to build up teams due to the organisational changes was the key factor in this opinion being received and that appropriate governance structures were not in place for the full financial year. The Department considers that by the end of financial year 2023–24 the …
Read more
The Department said that the need to build up teams due to the organisational changes was the key factor in this opinion being received and that appropriate governance structures were not in place for the full financial year. The Department considers that by the end of financial year 2023–24 the capability and capacity necessary to implement a sufficient framework of governance was in place.83 The Department said that internal audit concerns were reasonable given the scale of the changes which occurred. The first four months of the financial year, the Department considered it was working on an “interim-type” model before moving to a “steady-state position” from Autumn 2023 onwards.84 Based upon the improvements it considers were implemented by the end of the 2023–24 financial year, the Department expects that it will receive a ‘moderate’ assurance opinion from GIAA for its 2024–25 accounts.85 This is defined as “some improvements are required to enhance the adequacy and effectiveness of the framework of governance, risk management and control”.86 82 DBT ARA 2023–24, p 55 83 Q 38 84 Q 40 85 Q 39 86 Cabinet Office, Government efficiencies and savings (2022/23): Technical note, January 2025 22
Show less
Government response AI summary
The government agrees with the Committee's observation and states that the Annual Report and Accounts production and audit are progressing well and are on target for a September 2025 publication, with a commitment to notify if the deadline is missed.
Read full response →
HM Treasury
2
Conclusion
33rd Report - Supporting the UK’s prior…
Accepted
The Department is not working effectively enough with other departments to support industry and achieve the greatest impact. The Department views the economy through the lens of 10 economic sectors and 41 sub-sectors. While the Department is responsible for supporting businesses in general, it is not itself responsible for all …
Read more
The Department is not working effectively enough with other departments to support industry and achieve the greatest impact. The Department views the economy through the lens of 10 economic sectors and 41 sub-sectors. While the Department is responsible for supporting businesses in general, it is not itself responsible for all the relationships and policy interventions involving these sectors and must work with at 3 least 10 other government departments. The Department’s relationships with these bodies vary in maturity and there is no shared understanding of sector ownership, roles, or responsibilities. Prior to the announcement of the Industrial Strategy, the Department proposed formalising sector roles and responsibilities between departments by agreeing ‘handshakes’ which were akin to memorandums of understanding (MoU), but this approach was not widely adopted. Some cross-government structures have developed which aim to look at issues in an integrated way, such as the Office for Life Sciences, a skills forum, and the recent Growth Mission Board, and there is potential for this approach to be used more widely. The Department analyses and shares business intelligence across government, giving insight into senior engagement with businesses and sectoral issues, but its reporting could be improved. recommendation The Department should develop the way it works with other departments to support industry, looking to: • reach a common understanding of industry sectors, roles, and responsibilities with other government departments, formalise this with MoUs, and consider the most appropriate models for effective cross-government working; and • take steps to improve its intelligence sharing and explore digital solutions.
Show less
Government response AI summary
The government states it developed the Industrial Strategy in partnership with other departments, established governance and boards for coordination, and implemented a new digital Strategic Company Insight Tool (SCIT) to improve cross-government intelligence sharing, with usage currently expanding.
Read full response →
HM Treasury
3
Conclusion
33rd Report - Supporting the UK’s prior…
Accepted
The Department lacks a comprehensive understanding of its support for industry, including how much it spends per sector and the types of support it offers. The Department supports industry through a range of interventions, which vary in form and scale. Some interventions support individual sectors while others are designed to …
Read more
The Department lacks a comprehensive understanding of its support for industry, including how much it spends per sector and the types of support it offers. The Department supports industry through a range of interventions, which vary in form and scale. Some interventions support individual sectors while others are designed to improve the general business environment. The Department currently tracks its programme spending, grant expenditure, and spending by its Business Group (the part of the Department leading on support for industry). In 2023–24, it spent £790.9 million on business support grants and £530.3 million on business support programmes. While the Department can provide information on its individual items of support and their desired policy outcomes, it does not have a comprehensive understanding of its support. The Department found it difficult to readily provide the National Audit Office (NAO) with a breakdown of its industry support; does not routinely categorise the composition of it (for example, by industry sector or type); and has a limited understanding of what can be provided to sectors by other government departments. Maintaining good oversight of spending enables good decision-making, prioritisation, and accountability, and reduces the risk of inefficiencies in how public funds are used to stimulate 4 economic growth. Without a good understanding of the profile of current spending, the Department cannot effectively adapt its approach to a new Industrial Strategy. recommendation The Department should consolidate its understanding of the support for industry it offers; take steps to improve its reporting, for example, by type, value and sector; and use this information to inform decision-making on future support.
Show less
Government response AI summary
The government states it will collaborate across government to enhance tracking and reporting of support to Industrial Strategy sectors, refine sector definitions, and conduct strategic analysis to assess policy effectiveness and economic trends.
Read full response →
HM Treasury
4
Conclusion
33rd Report - Supporting the UK’s prior…
Accepted
It is not clear how the Department balances multiple government objectives, such as growth and net zero, when making decisions about how to support industry. Government needs to consider a wide range of metrics when making investment decisions including employment, net zero, and economic growth. Pursuit of these metrics requires …
Read more
It is not clear how the Department balances multiple government objectives, such as growth and net zero, when making decisions about how to support industry. Government needs to consider a wide range of metrics when making investment decisions including employment, net zero, and economic growth. Pursuit of these metrics requires trade-offs, but how the Department assesses and balances these factors is not transparent. This can make it difficult for stakeholders to understand government priorities, the rationale behind support, and for the Department to evaluate the effectiveness of its portfolio of support. Steel, for example, provides critical inputs into other sectors such as construction, manufacturing, and defence. Despite this, government policies, such as those designed to support decarbonisation, can put UK steel companies at a competitive disadvantage. There are new forums which can consider these policy choices and trade-offs and inform ministerial decisions, including the Growth Mission Board and the Permanent Secretaries’ Growth and Delivery Group. The Department acknowledges that decisions are made using a mix of data, facts and evidence, and judgement and that there is no easy formula for balancing competing objectives. recommendation The Department should provide greater transparency on the factors it considers when supporting industry, including how these factors are balanced when making decisions on what to support and how, and the processes underpinning these.
Show less
Government response AI summary
The government will provide greater transparency by using new 'place-based business cases' and supplementary guidance to assess projects and private sector contributions. It will also work with various bodies to maximise the impact of business-facing funds, with an approach already outlined in the Industrial Strategy's …
Read full response →
HM Treasury
5
Conclusion
33rd Report - Supporting the UK’s prior…
Accepted
There is a risk that the Department is not set up internally to support the aims of the forthcoming Industrial Strategy and to respond to ongoing issues facing UK businesses. The composition of sector teams in the Department’s Business Group varies by size and grade distribution, and is not always …
Read more
There is a risk that the Department is not set up internally to support the aims of the forthcoming Industrial Strategy and to respond to ongoing issues facing UK businesses. The composition of sector teams in the Department’s Business Group varies by size and grade distribution, and is not always related to the priority, size or needs of the sectors they are intended to support. The Department has said that a review of its structure is ongoing, to clarify responsibilities and to allocate resources to the top priority sectors. However, there does not seem to be an overarching approach which considers the needs of individual sectors while accounting 5 for pan-sector issues such as skills, regulation, or geography. Using the forthcoming Industrial Strategy as a clear framework to direct and prioritise its activity is an important next step to address this. The Department must also be able to respond to urgent and emerging issues that businesses face. It needs to allocate and flex resources to meet the needs of important sectors such as steel, which is subject to fluctuating external challenges. recommendation The Department should critically review its internal structures and resourcing model to ensure they reflect the objectives and demands of the forthcoming Industrial Strategy. This could include, for example: its approach to individual sectors, including foundational sectors such as steel; pan-sector issues; geography; and how it will ensure it can respond effectively to emerging issues that affect UK businesses.
Show less
Government response AI summary
The government states it has transitioned the Industrial Strategy Unit into a permanent delivery unit and has set out plans to restructure teams to focus on Industrial Strategy delivery, with this transformation already in progress and mostly completed by Spring 2026.
Read full response →
HM Treasury
6
Conclusion
33rd Report - Supporting the UK’s prior…
Accepted
It is essential that the government’s forthcoming Industrial Strategy has clear measures of success and effective processes for monitoring and evaluation. The government’s forthcoming Industrial Strategy is central to its economic growth mission. The Department is placing great emphasis on the Strategy and sees it as an opportunity to set …
Read more
It is essential that the government’s forthcoming Industrial Strategy has clear measures of success and effective processes for monitoring and evaluation. The government’s forthcoming Industrial Strategy is central to its economic growth mission. The Department is placing great emphasis on the Strategy and sees it as an opportunity to set a clear strategic direction for the UK economy over the next decade. The Department is less clear however on the practical implications of the Strategy and how it will change the nature of its support for industry, noting at the time we took evidence that it was in the middle of a spending review process. The Department acknowledges that its monitoring and evaluation has been inconsistent and, moving forward, wishes to embed evaluation from the start of its interventions. The Strategy provides the Department, HM Treasury and wider government an opportunity to address these shortcomings and set clear measures of success. While the government has yet to specify objectives for its Industrial Strategy, the Department’s Permanent Secretary is clear that it would be a failure if, in two to three years, the UK’s growth rate had not improved to at least the G7 average from 1.6% to 1.8%. recommendation The Department should update the Committee in six months on how it is adapting to the Industrial Strategy and the metrics it will use to measure success. 6 1 Support for industry Introduction
Show less
Government response AI summary
The government has committed to regularly reviewing progress against the Industrial Strategy, supported by the ISAC, and has implemented a public monitoring and evaluation approach underpinned by an impact pathway outlined in the technical annex. All government departments will carry out monitoring and evaluation for …
Read full response →
HM Treasury
1
Conclusion
33rd Report - Supporting the UK’s prior…
Accepted
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Business and Trade (the Department) and HM Treasury on support for the UK’s priority industry sectors.1
Government response AI summary
The government states it conducted a detailed consultation, introduced a cross-government Account Management initiative with dedicated account managers and ministerial engagement, and established a dedicated area to coordinate business engagement. It also published 'The UK’s Modern Industrial Strategy' and will explore establishing dedicated Sector Offices.
Read full response →
HM Treasury
7
Recommendation
33rd Report - Supporting the UK’s prior…
Accepted
To support industry, government must listen to the needs of businesses. The Department told us that while every government department engages with industry in some form, the Department for Business and Trade aspires to be a ‘front door’ for all businesses.10 The Department told us that the government wanted to …
Read more
To support industry, government must listen to the needs of businesses. The Department told us that while every government department engages with industry in some form, the Department for Business and Trade aspires to be a ‘front door’ for all businesses.10 The Department told us that the government wanted to be organised around businesses’ needs, and that integrating its international and domestic support for businesses was the clearest rationale for creating the Department of Business and Trade.11 However, there have been instances where businesses have received duplicate or conflicting information from the Department and other government departments.12 The Department said that its sector teams work closely at working level with other departments, for example with the Department for Culture, Media and Sport on creative industries, but acknowledged the challenge identified in the NAO report that it could 6 C&AG’s Report, paras 1.3, 1.10, Figure 8 7 C&AG’s Report, para 2 8 The eight ‘growth-driving’ sectors are: advanced manufacturing, clean energy industries, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services. 9 C&AG’s Report, paras 2, 6 10 Q 51 11 Q 42 12 C&AG’s Report, para 2.15 8 go further.13 The Department said that its Business Group covered all businesses, and that if a company approached the Department with a need, it could help resolve their issue.14
Show less
Government response AI summary
The government conducted a detailed consultation with business through the green paper Invest 2035, introduced a cross-government Account Management initiative, appointing dedicated account managers to lead strategic relationships with key businesses, and established a dedicated area to coordinate business engagement and insights.
Read full response →
HM Treasury
8
Recommendation
33rd Report - Supporting the UK’s prior…
Accepted
The Department recognised the importance of sharing business intelligence across government. It said that while the legal and technical issues surrounding this could be resolved, creating the right culture and incentives was harder. The Department told us it takes an account management approach to structure its engagement with industry but …
Read more
The Department recognised the importance of sharing business intelligence across government. It said that while the legal and technical issues surrounding this could be resolved, creating the right culture and incentives was harder. The Department told us it takes an account management approach to structure its engagement with industry but that it recognises that across Whitehall, departments need to be more disciplined in checking with account owners and sharing information.15 The Department told us it has worked with HM Treasury and Downing Street on its ‘top accounts’. It explained it had identified “50 companies [with a] disproportionate impact on the growth mission and industrial policy” and had put in place a new system. The Department told us that, as a consequence: When senior officials and Ministers are speaking to those companies, everyone knows who has talked to whom. We know what the issues of concern are from that company and how they are being progressed, and we have a single senior person, at both ministerial and official level, to own that relationship.16
Show less
Government response AI summary
The government has developed a new cross government digital customer relationship management system called the Strategic Company Insight Tool (SCIT) to improve the sharing of business intelligence, enable logging of business engagements, sharing company statistics, business insights and government priorities for engagement.
Read full response →
HM Treasury
9
Recommendation
33rd Report - Supporting the UK’s prior…
Accepted
We asked the Department about its ability to monitor its engagement with economic sectors, given that officials do not consistently record their interactions with companies, and its digital system — DataHub — is not accessible across the whole of Whitehall.17 The Department noted the challenges of different digital platforms operating …
Read more
We asked the Department about its ability to monitor its engagement with economic sectors, given that officials do not consistently record their interactions with companies, and its digital system — DataHub — is not accessible across the whole of Whitehall.17 The Department noted the challenges of different digital platforms operating in different government departments, and that a single digital architecture across Whitehall would help with joining up departments. The Department told us it had moved former BEIS and DIT officials onto a single digital platform; piloted AI tools; and was looking to increase digital capacity in the Department, because of the potential this would offer.18 13 Q 52 14 Q 51 15 Q 56 16 Q 84 17 C&AG’s Report, paras 2.19-2.20 18 Qq 84-87 9 Working with other government departments to support industry
Show less
Government response AI summary
The government developed a cross government digital customer relationship management system called the Strategic Company Insight Tool (SCIT) to improve the sharing of business intelligence.
Read full response →
HM Treasury
12
Conclusion
33rd Report - Supporting the UK’s prior…
Accepted
In the absence of formal agreements, the NAO reported that teams had taken different approaches to agree roles and that structures had emerged to overcome cross-departmental barriers.24 The Department highlighted the Office for Life Sciences (OLS), its cross-department skills forum, and the recent Growth Mission Board as examples of government …
Read more
In the absence of formal agreements, the NAO reported that teams had taken different approaches to agree roles and that structures had emerged to overcome cross-departmental barriers.24 The Department highlighted the Office for Life Sciences (OLS), its cross-department skills forum, and the recent Growth Mission Board as examples of government taking an integrated approach.25 The Department told us that the Office for Life Sciences was created in the early 2010s as a small team to be the voice of the pharmaceutical and life sciences industries within government, integrating different issues and views and providing a single interface to industry. It considered this model had been effective and that there was potential for the approach to be used more widely.26 19 C&AG’s Report, para 13 20 C&AG’s Report, para 2.8 21 Q 61 22 C&AG’s Report, para 2.10 23 Qq 78-79 24 C&AG’s Report, paras 2.9-2.11 25 Qq 52,75 26 Qq 52-53 10
Show less
Government response AI summary
The department developed the whole of the Industrial Strategy in partnership with other departments and this ongoing programme of work involves sector councils and taskforces.
Read full response →
HM Treasury
16
Recommendation
33rd Report - Supporting the UK’s prior…
Accepted
The Department does not have a complete overview or accurate data on what it, and wider government, spends on supporting industry. The Department found it difficult to readily provide the NAO with a breakdown of its support for industry. It does not routinely categorise the composition of its support, for …
Read more
The Department does not have a complete overview or accurate data on what it, and wider government, spends on supporting industry. The Department found it difficult to readily provide the NAO with a breakdown of its support for industry. It does not routinely categorise the composition of its support, for example by sector or support type, and it holds a limited understanding of initiatives delivered by other government departments and arms-length bodies and public entities such as the British Business Bank.33 We asked the Department how it could make decisions about the right kind and level of support to different sectors, if it does not know the current level and composition of its support. The Department did not clearly articulate why it lacked this information, instead noting that interventions to support industry were designed to address specific policy challenges. The Department told us that interventions under £20 million were considered by its grants delivery team, and interventions over this amount were considered by its Investment Committee using HM Treasury’s five principles.34 33 C&AG’s Report, paras 1.16-1.18 34 Qq 65-67 12 2 The forthcoming Industrial Strategy Trade-offs and transparency in decision-making
Show less
Government response AI summary
The government will collaborate across government and public bodies to enhance tracking and reporting of support to the Industrial Strategy sectors, refine sector definitions, and conduct strategic analysis to assess policy effectiveness and economic trends.
Read full response →
HM Treasury
20
Recommendation
33rd Report - Supporting the UK’s prior…
Accepted
We asked the Department to clarify its relationships with other departments and the influence it has in decision-making and trade-offs.40 The Department recognised it cannot deliver the forthcoming Industrial Strategy in isolation, and that other government departments have a role to play, although their objectives may not always be aligned. …
Read more
We asked the Department to clarify its relationships with other departments and the influence it has in decision-making and trade-offs.40 The Department recognised it cannot deliver the forthcoming Industrial Strategy in isolation, and that other government departments have a role to play, although their objectives may not always be aligned. The Department provided examples of how it works across Whitehall to align interests effectively, such as the Growth Mission Board, chaired by the Chancellor, and a permanent secretaries’ business and growth group. The Department specifically highlighted the example of working with HM Treasury on electricity prices, which it said needed to be considered in the round and ultimately decided on by Cabinet.41 HM Treasury told us that it would consider the strategic case around each investment and would not just focus on a single number.42 Resourcing the forthcoming Industrial Strategy
Show less
Government response AI summary
The government developed a cross government digital customer relationship management system called the Strategic Company Insight Tool (SCIT) to improve the sharing of business intelligence.
Read full response →
HM Treasury
25
Conclusion
33rd Report - Supporting the UK’s prior…
Accepted
The Department said it recognises that, with limited resources, it will be required to make difficult decisions about what it is prioritising in the forthcoming Strategy, noting that “some people will be disappointed in what we are able to do for them, because government cannot do everything.” The Department told …
Read more
The Department said it recognises that, with limited resources, it will be required to make difficult decisions about what it is prioritising in the forthcoming Strategy, noting that “some people will be disappointed in what we are able to do for them, because government cannot do everything.” The Department told us the new government had been clear about what it saw as the sources of growth and highlighted that the UK’s last industrial strategy was criticised as trying to provide “all things for all people”.51 We asked the Department what the Industrial Strategy will mean for sectors not designated ‘growth-driving’. The Department acknowledged that while it cared about all sectors, it had been clear about where it would put its focus to drive exports and investment. The Department told us it recognised that sectors such as steel were foundational to the UK economy and that it wanted to ensure the wider UK environment is a good place for all businesses to prosper.52
Show less
Government response AI summary
The government will align industry support with strategic priorities, introduce new 'place-based business cases' and supplementary guidance, and collaborate with advisory bodies by Summer 2026 to maximize impact across jobs, skills, and regional growth. It also details the analytical approach used to identify and support …
Read full response →
HM Treasury
26
Conclusion
33rd Report - Supporting the UK’s prior…
Accepted
We asked the Department what the forthcoming Industrial Strategy will mean for the scale and composition of its support for industry going forward. The Department told us it was preparing for an upcoming spending review and therefore could not provide more insights now, but that it was using the process …
Read more
We asked the Department what the forthcoming Industrial Strategy will mean for the scale and composition of its support for industry going forward. The Department told us it was preparing for an upcoming spending review and therefore could not provide more insights now, but that it was using the process as an opportunity to consider its options. The Department said it would “caution against measuring the success of an industrial policy by the amount of funding that goes into it,” stating that while funding is “obviously important [ … ] it is not just about the money.” By way of an example, the Department referenced a recent Department for Transport mandate on zero emissions vehicles as being as important for the future of the automotive industry as any financial support it could offer for research and development.53 49 C&AG’s Report, para 2 50 Qq 81-83 51 Q 82 52 Q 82 53 Q 81 16
Show less
Government response AI summary
The government states the Modern Industrial Strategy priorities are embedded in budgets and commits to collaborating across government to enhance tracking, reporting, and strategic analysis of support for Industrial Strategy sectors, developing an analytical program with ISAC for monitoring and evaluation.
Read full response →
HM Treasury
27
Conclusion
33rd Report - Supporting the UK’s prior…
Accepted
We asked the Department about gaps in its monitoring and evaluation of support programmes.54 Of the Department’s Business Group’s 32 initiatives to support sectors, it provided monitoring and evaluation evidence for just 11.55 The Department told us there is a value for money judgement regarding where it focuses its monitoring …
Read more
We asked the Department about gaps in its monitoring and evaluation of support programmes.54 Of the Department’s Business Group’s 32 initiatives to support sectors, it provided monitoring and evaluation evidence for just 11.55 The Department told us there is a value for money judgement regarding where it focuses its monitoring and evaluation efforts. However, it recognised that its approach had been inconsistent, and noted that a step-change was required in quality and consistency of evaluation. The Department told us that going forward, it wanted to embed evaluation from the very start of an intervention.56
Show less
Government response AI summary
The government states it has implemented a recommendation (though the committee labelled it a conclusion) by committing to regularly review progress against the Industrial Strategy, supported by the ISAC and a public monitoring and evaluation approach. This framework is underpinned by an impact pathway for …
Read full response →
HM Treasury
28
Conclusion
33rd Report - Supporting the UK’s prior…
Accepted
We asked the Department how it would measure success. Officials told us growth was its overarching objective as measured by GDP per head and real household disposable income. The Department highlighted that trade-offs were required under an industrial strategy and deciding to support one sector over another could not be …
Read more
We asked the Department how it would measure success. Officials told us growth was its overarching objective as measured by GDP per head and real household disposable income. The Department highlighted that trade-offs were required under an industrial strategy and deciding to support one sector over another could not be put down to a simple formula.57 While the Department has yet to specify objectives for the forthcoming Industrial Strategy, the Permanent Secretary said it would be a failure if, in two to three years, the UK growth rate had not improved to at least the G7 average from 1.6% to 1.8%.58 54 Q 80 55 C&AG’s Report, paras 3.3-3.5 56 Q 80 57 Qq 43-45 58 Q 88 17
Show less
Government response AI summary
The government states it has implemented a recommendation (though the committee labelled it a conclusion) by committing to regularly review progress against the Industrial Strategy, supported by the ISAC and a public monitoring and evaluation approach. They have defined top-level objectives as increases in GDP …
Read full response →
HM Treasury