Recommendations & Conclusions
21 items
3
Conclusion
34th Report - Department for Business a…
Acknowledged
The Department has issued a far-reaching letter of support, which commits it to supporting the Post Office to pay its liabilities as they fall due, but there is no clear plan for how long this will continue, or how to eventually make Post Office Limited financially independent. The Post Office …
Read more
The Department has issued a far-reaching letter of support, which commits it to supporting the Post Office to pay its liabilities as they fall due, but there is no clear plan for how long this will continue, or how to eventually make Post Office Limited financially independent. The Post Office is reliant on the Department for its financial survival. The Department issued a ‘Letter of Support’ to the Post Office in December 2024 which, in addition to the Department’s pre-existing commitment to fund the Post Office’s redress schemes, and an extension of established loan facilities, provides assurance that the Department will continue to provide financial support to help the Post Office to meets its liabilities as they fall due more widely. This includes support for: the running of Horizon remediation matters, Horizon support and technology replacement, taxation related liabilities, and for other potential liabilities. Without this financial support, the Post Office would not be able to meet its liabilities as they fall due. In 2023–24 the Department provided £260 million in grants and subsidies to the Post Office. By 31 March 2024, the Post Office also had total borrowings of £786 million with the Department. The Department has assured the Committee that it is working closely with the Post Office to identify ways to make the Post Office more financially independent. The Department did not consider the Letter of Support to require separate disclosure to Parliament under Managing Public Money requirements. However, the Department has agreed to notify the Committee of the next Letter of Support when it is issued. 5 recommendation a. Alongside its Treasury Minute response to this report, the Department should write to the Committee setting out its assessment of the nature and value of all financial support it might need to provide to Post Office Limited and its plans for working with the Post Office to make it financially independent of government. b. The Department shoul
Show less
Government response AI summary
The government agrees with the recommendation but provides no specific commitment or timeline for writing to the Committee with an assessment of financial support or plans for Post Office Limited's financial independence.
Read full response →
HM Treasury
17
Conclusion
34th Report - Department for Business a…
Acknowledged
The 2023–24 Annual Report and Accounts show that the Department provided £260 million in grants and subsidies to the Post Office and had total borrowings of £786 million with the Department, made up as follows: 30 Type of Support Description Value Annual support Capital Grants £90m Annual support Subsidies to …
Read more
The 2023–24 Annual Report and Accounts show that the Department provided £260 million in grants and subsidies to the Post Office and had total borrowings of £786 million with the Department, made up as follows: 30 Type of Support Description Value Annual support Capital Grants £90m Annual support Subsidies to support £120m Horizon Inquiry & Compensation Schemes Annual support Subsidies to Post Office £50m Limited to support normal function Loan Limited Term Loan £45m Loan Working Capital Facility £741m Other contractual Funding for future £840m commitments Horizon Redress Scheme (estimated Settlements (Post Office value) Administered Schemes) 27 Q 16 28 Q 24 29 Q 22; DBT ARA 2023–24, p 154; Post Office Limited, Annual Report and Consolidated Financial Statements 2023/24, December 2024, pp 72-74, 86-91, 146-147 30 DBT ARA 2023–24, pp 103, 158, 176, 200, 207 12
Show less
Government response AI summary
The government acknowledges the committee's observation regarding the Post Office's financial support and borrowings, and commits to writing to the Committee in Autumn 2025 following the publication of the Treasury Minute.
Read full response →
HM Treasury
18
Conclusion
34th Report - Department for Business a…
Acknowledged
The Letter of Support also provides assurances for other financial risks that, were they to crystallise, may result in the Post Office not being able to meet its liabilities as they fall due.31
Government response AI summary
The government acknowledges the committee's conclusion that the Letter of Support provides assurances for Post Office financial risks and commits to writing to the Committee in Autumn 2025 with an update.
Read full response →
HM Treasury
19
Conclusion
34th Report - Department for Business a…
Acknowledged
We were concerned that the Letter of Support effectively acts as the Post Office having a “blank cheque” from the Department, and asked what conditions were attached to it.32 The Department told us that there is a rolling working capital requirement that the Department manage. The Department explained it involves …
Read more
We were concerned that the Letter of Support effectively acts as the Post Office having a “blank cheque” from the Department, and asked what conditions were attached to it.32 The Department told us that there is a rolling working capital requirement that the Department manage. The Department explained it involves UK Government Investments (UKGI) to provide assurance around the financial structures of the Post Office. In a subsequent letter from the Department, it confirmed it will provide financial support to the Post Office to enable it to meet its liabilities as they fall due for a period of no less than 15 months from December 2024, but is subject to receiving HM Treasury approval and the application of the Subsidy Control Act 2022. As such it reaffirms the Department’s commitment to support the Post Office but deliberately falls short of being a financial guarantee.33
Show less
Government response AI summary
The government acknowledges the committee's conclusion regarding concerns about the Letter of Support's perceived 'blank cheque' nature and commits to writing to the Committee in Autumn 2025 with an update following the Treasury Minute.
Read full response →
HM Treasury
23
Conclusion
34th Report - Department for Business a…
Acknowledged
The Bounce Back Loan Scheme (BBLS) was established as part of a suite of measures to provide support to small businesses during the COVID-19 pandemic, with a maximum loan value of £50,000. The loans were provided by commercial lenders directly to businesses, who were expected to repay the debt in …
Read more
The Bounce Back Loan Scheme (BBLS) was established as part of a suite of measures to provide support to small businesses during the COVID-19 pandemic, with a maximum loan value of £50,000. The loans were provided by commercial lenders directly to businesses, who were expected to repay the debt in full. Government provided lenders with a 100% guarantee against the loans, meaning if the borrower did not repay the loan, the government will step in and repay the lender. The BBLS is administered by the British Business Bank (BBB), which is fully owned by the Department.39
Show less
Government response AI summary
The government acknowledged its responsibility for the ongoing management of the Bounce Back Loan Scheme.
Read full response →
HM Treasury
35
Conclusion
34th Report - Department for Business a…
Acknowledged
The Department for Business and Trade (the Department) was formed in February 2023 as one of three Government Departments which replaced the Department for Business, Energy and Industrial Strategy (BEIS). This action, is known as a ‘machinery of Government change’. This brought together the business-focused parts of the former BEIS, …
Read more
The Department for Business and Trade (the Department) was formed in February 2023 as one of three Government Departments which replaced the Department for Business, Energy and Industrial Strategy (BEIS). This action, is known as a ‘machinery of Government change’. This brought together the business-focused parts of the former BEIS, and the totality of the former Department for International Trade (DIT).56
Show less
Government response AI summary
The government acknowledges the creation of the Department for Business and Trade in February 2023.
Read full response →
HM Treasury
38
Conclusion
34th Report - Department for Business a…
Acknowledged
The Department told us that the delay in publishing its 2023–24 accounts was due to three key reasons. These were: the requirement to merge the financial information of its predecessor departments; the challenging learning curve required to account for more complex balances aligned with insufficient resources; and the complexity inherent …
Read more
The Department told us that the delay in publishing its 2023–24 accounts was due to three key reasons. These were: the requirement to merge the financial information of its predecessor departments; the challenging learning curve required to account for more complex balances aligned with insufficient resources; and the complexity inherent in the accounting for the Post Office compensation provisions.61
Show less
Government response AI summary
The government agrees with the committee's observation regarding the reasons for past delays in publishing accounts. It notes that the Annual Report and Accounts production and audit are progressing well and are on target for a September 2025 publication.
Read full response →
HM Treasury
41
Conclusion
34th Report - Department for Business a…
Acknowledged
The second key reason the Department gave for the delay in the completion of its 2023–24 accounts was that the finance team who were tasked with producing the accounts previously worked in DIT and had to understand the complex balances which the Department inherited from BEIS.67 DIT had total operating …
Read more
The second key reason the Department gave for the delay in the completion of its 2023–24 accounts was that the finance team who were tasked with producing the accounts previously worked in DIT and had to understand the complex balances which the Department inherited from BEIS.67 DIT had total operating expenditure in 2022–23 of £588 million across its departmental group.68 This represents a fraction of the £3,951 million in the Department’s group operating expenditure when restated for the equivalent period which includes the relevant portion of BEIS expenditure.69 The finance team’s experience from producing the DIT accounts was therefore insufficient to provide the capability to prepare the Department’s accounts. The Department considers the complexity of its balance sheet is “different by orders of magnitude” compared to DIT70 and that the 2023–24 accounts production process was a steep learning curve.71 The Department said it had needed to recruit “literally a couple of hundred” finance staff to provide sufficient capability within its finance function.72
Show less
Government response AI summary
The government acknowledges the committee's conclusion regarding delays in its 2023-24 accounts due to finance team capability and complexity. It reports that Annual Report and Accounts production is progressing well and is on target for a September publication.
Read full response →
HM Treasury
45
Conclusion
34th Report - Department for Business a…
Acknowledged
This control framework is subject to annual review by the Government Internal Audit Agency (GIAA). GIAA provides four levels of assurance opinion following its reviews: substantial, moderate, limited or unsatisfactory.80 The conclusion for the Department in 2023–24 was ‘limited’, indicating there were significant weaknesses in the framework of governance, risk …
Read more
This control framework is subject to annual review by the Government Internal Audit Agency (GIAA). GIAA provides four levels of assurance opinion following its reviews: substantial, moderate, limited or unsatisfactory.80 The conclusion for the Department in 2023–24 was ‘limited’, indicating there were significant weaknesses in the framework of governance, risk management and control such that it could be, or could become inadequate and ineffective. This was based upon 35 individual reviews of the Department’s governance, risk management, financial processes and other controls.81
Show less
Government response AI summary
The government acknowledges the committee's conclusion regarding the 'limited' GIAA assurance on its control framework. It reports that Annual Report and Accounts production is progressing well and is on target for a September publication.
Read full response →
HM Treasury
10
Recommendation
33rd Report - Supporting the UK’s prior…
Acknowledged
While the Department is responsible for supporting businesses overall, it does not ‘own’ every sector of the economy nor is it responsible for every support intervention delivered by government. Many of the levers needed to bring about change to the business environment sit outside of the Department. The financial services …
Read more
While the Department is responsible for supporting businesses overall, it does not ‘own’ every sector of the economy nor is it responsible for every support intervention delivered by government. Many of the levers needed to bring about change to the business environment sit outside of the Department. The financial services sector, for example, primarily sits with HM Treasury, whereas skills is the responsibility of the Department for Education and Skills England. As a consequence, the Department must work with and influence at least 10 other government departments to achieve its objectives.19
Show less
Government response AI summary
The government acknowledges the recommendation and states the department developed the whole of the Industrial Strategy in partnership with other departments, with Sector Plans led by relevant departments and that this is an ongoing programme.
Read full response →
HM Treasury
11
Recommendation
33rd Report - Supporting the UK’s prior…
Acknowledged
The Department’s working relationships with others in government vary in maturity and other government departments have mixed views on the Department’s remit.20 To agree roles and responsibilities between departments, the Department told us it had introduced ‘handshake agreements’.21 However, the NAO’s report highlighted these had yet to be adopted by …
Read more
The Department’s working relationships with others in government vary in maturity and other government departments have mixed views on the Department’s remit.20 To agree roles and responsibilities between departments, the Department told us it had introduced ‘handshake agreements’.21 However, the NAO’s report highlighted these had yet to be adopted by the majority of sector teams.22 We asked the Department about its assessment of the need for joined-up, whole-of-government thinking, and why it does not have an MoU with every department it interacts with to ensure they have shared expectations. The Department told us it was confident government departments were aligned under the growth mission, but it committed to consider the potential of having formal agreements between itself and its partners.23
Show less
Government response AI summary
The government acknowledges the recommendation and states the department developed the whole of the Industrial Strategy in partnership with other departments, with Sector Plans led by relevant departments and that this is an ongoing programme.
Read full response →
HM Treasury
13
Recommendation
33rd Report - Supporting the UK’s prior…
Acknowledged
To monitor the performance of economic sectors and share information, the Department produces business intelligence products. The Department told us it recognised these products had not previously been shared well across Whitehall and that it had taken steps to do so in a more comprehensive and consistent way. The Department …
Read more
To monitor the performance of economic sectors and share information, the Department produces business intelligence products. The Department told us it recognised these products had not previously been shared well across Whitehall and that it had taken steps to do so in a more comprehensive and consistent way. The Department told us its recurring business intelligence reports were now being shared with over 2,500 officials across government, including ministers and 16 permanent secretaries.27 The Department said it had support from Downing Street and senior officials in this area.28 Oversight of departmental spending
Show less
Government response AI summary
The government acknowledges the recommendation and states the department developed the whole of the Industrial Strategy in partnership with other departments, with Sector Plans led by relevant departments and that this is an ongoing programme.
Read full response →
HM Treasury
14
Conclusion
33rd Report - Supporting the UK’s prior…
Acknowledged
While it is not the only department to do so, the Department for Business and Trade directly supports industry through a range of interventions with a range of policy objectives. Some of the Department’s interventions are aimed at specific sectors whereas others are designed to improve the general business environment. …
Read more
While it is not the only department to do so, the Department for Business and Trade directly supports industry through a range of interventions with a range of policy objectives. Some of the Department’s interventions are aimed at specific sectors whereas others are designed to improve the general business environment. The form and scale of this support varies and includes grants, advice, and international agreements.29 Examples of high-profile support initiatives delivered by the Department include the British Industry Supercharger (designed to reduce energy costs for energy intensive industries) and the Automotive Transformation Fund (an initiative to create an internationally competitive electric vehicle supply chain in the UK).30
Show less
Government response AI summary
The department currently supports industry through a range of interventions, the scale and form of which varies greatly, spending £790.9 million on business support grants in 2023–24, with 62.5% going to the advanced manufacturing sector and 29.9% to the energy sector.
Read full response →
HM Treasury
15
Conclusion
33rd Report - Supporting the UK’s prior…
Acknowledged
The Department tracks its programme spending, grant expenditure and Business Group resource spending across sector teams but does not have processes to break this down by support type using existing systems. In 2023–24, the Department spent £790.9 million on business support grants, 62.5% of which was allocated to advanced manufacturing, …
Read more
The Department tracks its programme spending, grant expenditure and Business Group resource spending across sector teams but does not have processes to break this down by support type using existing systems. In 2023–24, the Department spent £790.9 million on business support grants, 62.5% of which was allocated to advanced manufacturing, 29.9% to energy, and 6.4% to pan-sector support. The Department’s Business Group reported spending £530.3 million on business support programmes. Of this, £250.1 million went to the Automotive Transformation Fund.31 The Department told us that its support for a sector was not just financial, and provided the financial services sector as an example, noting the main engagement with this sector is led by HM Treasury. The Department told us that to ensure the UK has an international advantage in the sector, it is not about financial support to banks, but rather ensuring that the regulatory environment, for example, is appropriate.32 27 Q 55 28 Q 56 29 C&AG’s Report, para 1.3 30 C&AG’s Report, case studies 1 and 4 31 C&AG’s Report, key facts, para 10 32 Q 63 11
Show less
Government response AI summary
The department currently supports industry through a range of interventions, the scale and form of which varies greatly, spending £790.9 million on business support grants in 2023–24, with 62.5% going to the advanced manufacturing sector and 29.9% to the energy sector.
Read full response →
HM Treasury
17
Conclusion
33rd Report - Supporting the UK’s prior…
Acknowledged
While its primary objective is economic growth, the Department uses a range of metrics to guide its work, some of which require trade-offs. Factors considered by the Department when designing support initiatives include GVA, net zero ambitions, and national security. The NAO found that the Department lacked a standardised approach …
Read more
While its primary objective is economic growth, the Department uses a range of metrics to guide its work, some of which require trade-offs. Factors considered by the Department when designing support initiatives include GVA, net zero ambitions, and national security. The NAO found that the Department lacked a standardised approach to balance different metrics when making decisions to support industry. This can make it difficult for stakeholders to understand the rationale behind interventions; for the Department to demonstrate why it prioritised one intervention over another; and hampers its ability to evaluate the effectiveness of its interventions.35
Show less
Government response AI summary
The government is aligning industry support with strategic priorities, including the Industrial Strategy, and will use new 'place-based business cases' to assess complementary projects in specific regions, with supplementary guidance on economic resilience.
Read full response →
HM Treasury
18
Conclusion
33rd Report - Supporting the UK’s prior…
Acknowledged
We asked the Department how it balances trade-offs when making decisions about support, and how it makes this explicit. Officials told us that it assesses interventions using HM Treasury’s five principles. Proposals are then put to Ministers who make decisions based on advice from the Department and their own understanding …
Read more
We asked the Department how it balances trade-offs when making decisions about support, and how it makes this explicit. Officials told us that it assesses interventions using HM Treasury’s five principles. Proposals are then put to Ministers who make decisions based on advice from the Department and their own understanding of what the trade-offs should be. HM Treasury told us it would want to look at the best range of evidence in making an overall assessment, and that it would vary from policy to policy. In the case of the forthcoming Industrial Strategy, the principal objective is growth, but it also has other objectives, including net zero, security, resilience and regional impact. The Treasury said it would expect the forthcoming Industrial Strategy document to say more about the methodology, and how the government made such trade-offs.36
Show less
Government response AI summary
The government is aligning industry support with strategic priorities, including the Industrial Strategy, and will use new 'place-based business cases' to assess complementary projects in specific regions, with supplementary guidance on economic resilience.
Read full response →
HM Treasury
19
Conclusion
33rd Report - Supporting the UK’s prior…
Acknowledged
The Department noted that one of the criticisms of the 2017 Industrial Strategy was that it was too broad and not enough choices were made. The government has now designated eight growth-driving sectors, and the Department told us these were selected on the basis of joint analysis with HM Treasury, …
Read more
The Department noted that one of the criticisms of the 2017 Industrial Strategy was that it was too broad and not enough choices were made. The government has now designated eight growth-driving sectors, and the Department told us these were selected on the basis of joint analysis with HM Treasury, considering evidence from the last decade and forecasts of growth and productivity over the next decade. The Department said 35 C&AG’s Report, para 8 36 Qq 68-70 13 that industries such as steel are crucial foundational sectors to the economy and, as part of the wider growth mission, the government wants to ensure the broader business environment is conducive to growth in all sectors.37 We asked about the example of policies aimed at supporting decarbonisation, and how this put some industries such as steel at a competitive disadvantage.38 The Department explained that it was not practical to make decisions based on just a few measures and listed factors it had considered, including jobs, wages, exports and investment, when deciding which industries to support and what interventions will be prioritised in the forthcoming Industrial Strategy.39
Show less
Government response AI summary
The government is aligning industry support with strategic priorities, including the Industrial Strategy, and will use new 'place-based business cases' to assess complementary projects in specific regions, with supplementary guidance on economic resilience.
Read full response →
HM Treasury
21
Conclusion
33rd Report - Supporting the UK’s prior…
Acknowledged
Following its formation in February 2023, the Department consolidated teams from the former BEIS and DIT into 25 sector-facing teams within its Business Group. These sector teams vary by size and grade distribution. The Department’s Business Group also has teams that work across sectors, such as the Business Intelligence Unit. …
Read more
Following its formation in February 2023, the Department consolidated teams from the former BEIS and DIT into 25 sector-facing teams within its Business Group. These sector teams vary by size and grade distribution. The Department’s Business Group also has teams that work across sectors, such as the Business Intelligence Unit. There are 820 full time equivalent (FTE) staff in the Business Group (as of September 2024).43 We asked the Department about the correlation between the number of people employed in certain teams, and the amount it is spending on support. The Department told us that the number of staff per sector team was not always an 37 Q 82 38 Q 71 39 Q 45 and Q 82 40 Qq 71-72 41 Qq 71-72 42 Q 74 43 C&AG’s Report, para 12, Figure 7 14 indication of the size or importance of the industry the team aims to support, or of the size of the budget available. The Department told us that the way it would work with each sector would vary, depending on the needs of the sector and the type of support intervention.44
Show less
Government response AI summary
The department will ensure effective implementation of the Industrial Strategy by using a permanent delivery unit and restructuring teams, which will be mostly completed by Spring 2026.
Read full response →
HM Treasury
22
Conclusion
33rd Report - Supporting the UK’s prior…
Acknowledged
We asked the Department about its overall priorities and whether it had aligned its resources accordingly. The Department explained that when the former DIT and BEIS merged, two sets of teams came together, which it structured around 10 economic sectors. Its directorates were approximately the same size, but the size …
Read more
We asked the Department about its overall priorities and whether it had aligned its resources accordingly. The Department explained that when the former DIT and BEIS merged, two sets of teams came together, which it structured around 10 economic sectors. Its directorates were approximately the same size, but the size of specific sector teams varied. The Department told us that it was continuing to review its structure and make changes in light of the forthcoming Industrial Strategy, noting that it had to allocate resources to the top priority sectors, with fewer resources in other sectors.45 We asked the Department how it reconciled individual sector needs with cross-economy issues, to develop an overarching approach. The Department acknowledged the complexity of needing to think about individual sectors, cross-economy issues, and what is happening in different geographies, and that it had to bring those perspectives together. It told us that integration would come through the forthcoming Industrial Strategy.46
Show less
Government response AI summary
The department will ensure effective implementation of the Industrial Strategy by using a permanent delivery unit and restructuring teams, which will be mostly completed by Spring 2026.
Read full response →
HM Treasury
23
Conclusion
33rd Report - Supporting the UK’s prior…
Acknowledged
We asked the Department if it was agile enough to respond to emerging issues such as changing tariff rates affecting UK businesses. The Department told us it understands the importance of ‘surging’ resource to where it is needed most urgently, and said it has been able to flex resources across …
Read more
We asked the Department if it was agile enough to respond to emerging issues such as changing tariff rates affecting UK businesses. The Department told us it understands the importance of ‘surging’ resource to where it is needed most urgently, and said it has been able to flex resources across teams. The Department also told us it has a small, dedicated team that can respond to events and shocks, and that this was a critical resource which it could deploy on major priorities.47 We asked the Department what steps it was taking to recruit to specialist roles where it must compete with the private sector, for example in IT or construction. The Department told us it was working to address recruitment challenges in roles such as technology and digital, financial, and programme management, noting that it was critical to balance being competitive alongside ensuring value for money for the taxpayer.48 44 Q 63 45 Q 61 46 Q 62 47 Q 64 48 Q 59 15 Tracking progress towards the ambitions in the Industrial Strategy
Show less
Government response AI summary
The department will ensure effective implementation of the Industrial Strategy by using a permanent delivery unit and restructuring teams, which will be mostly completed by Spring 2026.
Read full response →
HM Treasury
24
Recommendation
33rd Report - Supporting the UK’s prior…
Acknowledged
The government’s forthcoming Industrial Strategy, which aims to channel support to eight growth-driving sectors, is expected to be published in spring 2025 alongside the Spending Review.49 The Department told us the eight priority sectors were collectively responsible for 30% of GDP and 60% of growth. To inform the Strategy’s design, …
Read more
The government’s forthcoming Industrial Strategy, which aims to channel support to eight growth-driving sectors, is expected to be published in spring 2025 alongside the Spending Review.49 The Department told us the eight priority sectors were collectively responsible for 30% of GDP and 60% of growth. To inform the Strategy’s design, the Department told us its Green Paper consultation had received over 27,000 responses. The Department told us the Strategy will set out a clear vision, be developed in partnership with industry, and have consistency in approach. There will also be external challenge from the new Industrial Strategy Advisory Council.50
Show less
Government response AI summary
The government has committed to regularly reviewing progress against the Industrial Strategy, supported by the ISAC through its expertise on monitoring and evaluation and continued advice on policy development and delivery.
Read full response →
HM Treasury