Recommendations & Conclusions
24 items
2
Recommendation
Twenty-First Report - Government suppor…
Not Addressed
The Department for International Trade and UK Export Finance are not yet doing enough to identify and help the businesses of tomorrow to export. The Department’s level of insight into exporters in different sectors of the UK economy is variable. For example, the Department is still developing its understanding of …
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The Department for International Trade and UK Export Finance are not yet doing enough to identify and help the businesses of tomorrow to export. The Department’s level of insight into exporters in different sectors of the UK economy is variable. For example, the Department is still developing its understanding of which businesses are ready to export in emerging sectors, such as renewable energy and low carbon industries. Over the last year, the Department has developed its sector teams by recruiting sector leads to help it better understand emerging sectors. The Department also continues to offer peer support where firms get an opportunity to hear how it is done from an experienced exporter. Initiatives such as the Europe trade hub have been welcomed by businesses of all sizes. We remain concerned, however, that the Department focuses on identifying which overseas markets might provide contracts for the UK’s existing exporters, rather than pursuing opportunities for future export growth by supporting new, innovative businesses. The Federation for Small Businesses (FSB) informed us that there needs to be a greater link between innovation funding and export finance. But, the Department is not confident that UK Research & Innovation (UKRI) fully understands what support companies need to become exporters, or whether its own staff consider whether innovation funding might be available to support a potential exporter. Recommendation: The Department and UKEF should develop a more integrated approach for working with other government departments, in particular with the Department for Business, Innovation and Skills and UK Research & Innovation, in order to build the UK’s industrial capability and prioritise investment in sectors of growing importance and export opportunity, such as renewable energy. The 6 Government support for UK exporters Department should also consider other ways of supporting potential exporters and companies exporting for the first time, for example,
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Government response AI summary
The government's response addresses funding decisions for the Towns Fund and Levelling Up Fund, providing no direct engagement with the recommendation on DIT/UKEF's integrated approach or support for exporters.
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HM Treasury
3
Recommendation
Twenty-First Report - Government suppor…
Rejected
The Department for International Trade’s contribution to export performance is unclear because of a lack of robust metrics. It is important for any public body to be clear about and accountable for what it is trying to achieve, and the criteria it will use to judge whether it is being …
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The Department for International Trade’s contribution to export performance is unclear because of a lack of robust metrics. It is important for any public body to be clear about and accountable for what it is trying to achieve, and the criteria it will use to judge whether it is being successful, including performance information that allows Parliament and the taxpayer to understand how effective they are and what impact they are having. However, the government has not set a timescale for achieving its export growth ambition to increase from 30% to 35% of GDP, and the target is dependent on multiple factors such as economic conditions and contributions from other parties including independent efforts by UK industry. The Department measures its annual exports performance through its ‘export wins’ measure but this target does not encourage it to focus on longer-term export growth. The Department was unable to provide us with details of other measures that cover the broad scope of its role in supporting exports, such as removing market access barriers. The Department says that it aims to develop better measures for understanding the impact of FTAs and to help it target specific markets. Recommendation: By the end of 2020, the Department should set out longer- term outcome measures that enable us, Parliament and the taxpayer to hold it to account for its impact on exports, and which capture the full range of its activities to support exports. Measures should include supporting exports, such as removing market access barriers, including better international comparators, the impact of free trade agreements and the number of exporters. DIT’s performance against all measures, existing and new, should be reported transparently.
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Government response AI summary
The government explicitly rejects this recommendation, stating it already publishes a balanced suite of metrics and is developing more for priority outcomes. It will not commit to publishing any specific additional metrics until their robustness and accuracy are confirmed.
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HM Treasury
4
Recommendation
Twenty-First Report - Government suppor…
Not Addressed
The Department for International Trade is not doing enough to address the challenges that small businesses face when they export. Out of an estimated 5.9 million businesses in the UK, the Department focuses its bespoke support on around 230,000 which has been almost identical for many years, with a turnover …
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The Department for International Trade is not doing enough to address the challenges that small businesses face when they export. Out of an estimated 5.9 million businesses in the UK, the Department focuses its bespoke support on around 230,000 which has been almost identical for many years, with a turnover of over £500,000 and directs businesses below this threshold to digital services on its website. Levels of satisfaction with the Department’s digital services are low (under half of the Department’s clients report that services to help them identify export opportunities are good at meeting their needs) and use of these services is declining (registrations have dropped from 816 per month in 2018, to 450 per month in 2019). Small businesses with fewer staff may not be able to afford the time required to use the Department’s website to identify the right opportunities. In addition, smaller exporters are concerned about the varying quality of the Department’s International Trade Advisors, opportunities for businesses to report trade barriers, and the financial support available for attending trade shows. The FSB has welcomed the Small and Medium-sized Enterprises (SMEs) chapter in the free trade agreement with Japan. The Department intends to include such chapters in all its trade agreements, but the FSB informs us that utilisation of FTAs by smaller Government support for UK exporters 7 businesses is disproportionately low when compared to larger firms. There is scope for the Department to learn from other countries, such as Denmark, about how it could better target support at individual companies. Recommendation: DIT should take urgent action to ensure that more small businesses become exporters. Specifically, it should: • Improve the support it offers to smaller businesses. It should improve the quality of the International Trade Adviser service and explore the merits of introducing accreditation, ensure that its digital services meet the needs of smaller business
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Government response AI summary
The government's truncated response indicates the department will provide annual updates on the success of a fund through monitoring and evaluation. It does not explicitly address the specific recommendations to improve ITA quality, explore accreditation, or ensure digital services meet smaller business needs.
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HM Treasury
5
Recommendation
Twenty-First Report - Government suppor…
Accepted in Part
UK Export Finance directly supported only 199 customers in total in 2019–20, failing to meet its own target of 500. UKEF attributes failing to meet its customer target to a lack of awareness among smaller businesses of what UKEF offers, a potential decline in demand, a lack of appetite from …
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UK Export Finance directly supported only 199 customers in total in 2019–20, failing to meet its own target of 500. UKEF attributes failing to meet its customer target to a lack of awareness among smaller businesses of what UKEF offers, a potential decline in demand, a lack of appetite from banks and issues with its application process. UKEF is introducing more flexible products which are expected to be more attractive to smaller businesses in a wider range of markets and help increase customer numbers. These include the General Export Facility which will support businesses’ overall export working capital requirements, rather than linking this support to specific contracts. In response to the COVID-19 pandemic it has also expanded the scope of its Export Insurance Policy to a wider number of markets, with the aim of protecting UK exporters from the risk of non-payment, and it has taken steps to proactively engage with the renewable energy sector, supporting projects in Taiwan, Spain and Ghana. However, how effective UKEF is at meeting its customers’ needs is unclear because, unlike the Department, it does not survey its customers to assess their satisfaction with its products and application processes. Recommendation: UKEF should report back to us in writing by September 2021 with an update on progress and action is has taken to: • Proactively target the green technology and renewable energy market. • Increase the number of SMEs it is supporting in a wider range of countries through take up of its new General Export Facility, and consider using UKEF recently approved marketing budget to do that. 8 Government support for UK exporters • Support exporters during the COVID-19 pandemic, particularly in relation to the expansion of the scope of its Export Insurance Policy to a wider number of markets. • Develop and implement a customer satisfaction survey. UKEF should consider the merits of developing its own survey as well as working with the Department to identify oppor
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Government response AI summary
The government agrees to the recommendation, stating it launched the General Export Facility (GEF) and refreshed its "Exporters Edge" marketing campaign to increase support for SMEs. However, the response does not explicitly address the recommendations to proactively target green technology, support exporters during COVID-19, or …
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HM Treasury
6
Recommendation
Twenty-First Report - Government suppor…
Accepted
It is more difficult for businesses who are not customers of five of the largest commercial banks to access export finance. Smaller businesses would benefit from shorter turnaround times and simpler requirements when they apply for export finance. UKEF has introduced greater delegated authority to five of the largest commercial …
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It is more difficult for businesses who are not customers of five of the largest commercial banks to access export finance. Smaller businesses would benefit from shorter turnaround times and simpler requirements when they apply for export finance. UKEF has introduced greater delegated authority to five of the largest commercial banks who can apply for some of UKEF’s products using an online portal and obtain immediate cover. In 2019–20, 389 applications were made through this portal. However, we heard that businesses who are not customers of these five banks cannot access the portal. Instead, they need to use a manual process that takes much longer. UKEF said that it intends to expand the number of other banks that can apply for its products using an online portal ‘shortly’. First, it wants to establish the system with the big five and create a single set of standard documentation. Recommendation: To make it simpler for smaller businesses to apply for export finance, UKEF should accelerate its expansion of the number of banks that can apply for UKEF’s products using the quicker online process. In its Treasury Minute response, we expect UKEF to confirm by when it expects to achieve this. Government support for UK exporters 9 1 Promoting export growth
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Government response AI summary
The government agrees to accelerate the expansion of banks operating under the delegated approach for UKEF products, aiming for September 2021. It will sign up new institutions for the General Export Facility and engage with other funders, including FinTechs, to adapt products to simplify access …
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HM Treasury
1
Conclusion
Twenty-First Report - Government suppor…
Not Addressed
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for International Trade (the Department) and UK Export Finance about support for exports.1
Government response AI summary
The government's response provides general background information about UK exports and the Department for International Trade's role, as the committee's initial paragraph was purely introductory and did not require action.
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HM Treasury
7
Conclusion
Twenty-First Report - Government suppor…
UKEF is concerned that where the Department’s staff do not have the technical skills to promote export finance, UKEF may consequently have missed opportunities to use export finance to support UK exports in some markets. For example, UKEF had supported exports to 72 countries in 2018–19, but 80% of the …
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UKEF is concerned that where the Department’s staff do not have the technical skills to promote export finance, UKEF may consequently have missed opportunities to use export finance to support UK exports in some markets. For example, UKEF had supported exports to 72 countries in 2018–19, but 80% of the value of these exports was concentrated in five of these countries.11 UKEF informed us that it does not want export finance to be overlooked and, over the least two years, it has recruited 12 export finance executives to support the Department’s teams in overseas regions. These ‘country heads’ help the Department to respond to opportunities and have a closer, more regular interaction with exporters and buyers in their region. UKEF told us that it planned to place up to 20 country heads in embassies around the world.12 Helping the businesses of tomorrow to export
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HM Treasury
8
Conclusion
Twenty-First Report - Government suppor…
The Department’s insight into exporters in different sectors of the UK economy is variable; stronger in well-established sectors, such as aerospace, but less developed and less well-understood for some emerging sectors such as renewable energy.13 The Department told us that it has aimed to substantially increase the skills of its …
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The Department’s insight into exporters in different sectors of the UK economy is variable; stronger in well-established sectors, such as aerospace, but less developed and less well-understood for some emerging sectors such as renewable energy.13 The Department told us that it has aimed to substantially increase the skills of its sector teams over the last year, and has recruited a number of sector directors to help “get under the skin” of those sectors where the Department’s knowledge was less well advanced, and where it was less able to support businesses. The Department highlighted that the transition to low carbon industries is a priority for the Department as it is for other government departments.14 The Department also noted that it expects the technology sector to play a large part in any future government strategy and that it is seeking to support more technology exports. For example, it referred to its recent success in a collaborative bid with the Department for Culture, Media & Sport to put a digital trade network into the Asia-Pacific region.15 7 Qq 48, 49 8 Q 42 9 C&AG’s Report, paras 18, 2.30. 10 Q 44 11 C&AG’s Report, paras 18, 2.29. 12 Qq 42, 43 13 C&AG’s Report, paras 15. 14 Q 50 15 Qq 11, 67 Government support for UK exporters 11
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HM Treasury
9
Conclusion
Twenty-First Report - Government suppor…
We were concerned that the Department concentrates on identifying which overseas markets might provide contacts for the UK’s existing exporters.16 These may be larger firms in more established markets that already generate high value exports. However longer-term export growth will come from focusing on some of the smaller innovative businesses …
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We were concerned that the Department concentrates on identifying which overseas markets might provide contacts for the UK’s existing exporters.16 These may be larger firms in more established markets that already generate high value exports. However longer-term export growth will come from focusing on some of the smaller innovative businesses which have potential to grow. The Department noted that large companies often employ a lot of people and create a lot of value but agreed that it should also focus on smaller firms, and encourage companies that are not currently exporting to do so.17 The Department recognises that one of the most significant things in encouraging businesses to export is peer support and hearing from others of how it is done.18 The Department also emphasised that it seeks to put resources into regions where it expects growth. For example, it has increased its staff in both Africa and Latin America, while more mature markets like North America have received less additional funding over the past few years.19 The Department established the Europe trade hub in April 2019 to provide extra support to businesses in recognition of the changing trading environment resulting from the UK leaving the EU. It was considered successful and welcomed by businesses of all sizes.20
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HM Treasury
10
Conclusion
Twenty-First Report - Government suppor…
Accepted
Although sector teams within the Department for Business, Energy & Industry Strategy and the Department for International Trade work together, officials at both departments consider there is scope for a better joint understanding of how to exploit emerging opportunities in overseas markets.21 The Department noted that there is a high …
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Although sector teams within the Department for Business, Energy & Industry Strategy and the Department for International Trade work together, officials at both departments consider there is scope for a better joint understanding of how to exploit emerging opportunities in overseas markets.21 The Department noted that there is a high correlation between innovating, high productivity and exporting, and that it does work with UK Research and Innovation (UKRI). However, the Federation of Small Businesses (FSB) considers that there needs to be better links between innovation funding and export finance.22 The Department acknowledged that not everybody in UKRI is fully aware of what support a company needs to export and that its own staff may not consider what innovation funding is available when working with businesses.23 Lack of robust metrics
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Government response AI summary
The government describes an integrated approach developed with BEIS, applying a new framework to critical net zero technologies to link innovation and export potential from early policy stages. While there are no immediate plans to partner on UKRI studies, DIT and UKEF will continue to …
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HM Treasury
11
Conclusion
Twenty-First Report - Government suppor…
Rejected
In 2018, the Government announced its export strategy and an ambition to raise exports as a proportion of GDP from 30% to 35%.24 This committee has recently highlighted how important it is for any public body to be clear about and accountable for what it is trying to achieve, and …
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In 2018, the Government announced its export strategy and an ambition to raise exports as a proportion of GDP from 30% to 35%.24 This committee has recently highlighted how important it is for any public body to be clear about and accountable for what it is trying to achieve, and the criteria it will use to judge whether it is being successful. Furthermore, we emphasised the need for performance information that helps public bodies understand how effective they are and what impact they are having, so they can judge progress and take corrective action when they are not on track.25 However, the Government has not set a timescale for achieving its export growth ambition, and the 35% 16 Q 54 17 Q 24 18 Q 70 19 Q 67 20 Qq 40, 41 21 C&AG’s Report, para 2.14. 22 Federation of Small Businesses written evidence to the Public Accounts Committee inquiry into Government support for UK exporters, 11 September 2020, para 11 23 Q 69 24 C&AG’s Report, para 13 25 Committee of Public Accounts, 107th Report, 2017–19, Consumer Protection, 12 July 2019, HC 1752 12 Government support for UK exporters target is dependent on contributions from other parties including independent efforts by UK industry.26 In our view, the measure is not satisfactory because it can also be affected by fluctuations in GDP.27
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Government response AI summary
The government explicitly disagrees, stating it already publishes a balanced suite of export performance indicators and has developed a framework including a theory of change. It will not commit to publishing additional metrics until they are robust and accurate, effectively rejecting the committee's implicit call …
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HM Treasury
12
Conclusion
Twenty-First Report - Government suppor…
Rejected
The Department informed us that it has a “raft of other measures” that it could be measured against, including international comparators. It highlighted its ‘export wins’ measure, which is the value of exports that it thinks it has directly contributed to, as determined and agreed by the companies that it …
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The Department informed us that it has a “raft of other measures” that it could be measured against, including international comparators. It highlighted its ‘export wins’ measure, which is the value of exports that it thinks it has directly contributed to, as determined and agreed by the companies that it has helped.28 However, the Department’s annual export wins target has limitations because it focuses efforts on short-term export support rather than on longer-term activities that are needed to grow exports. Activities that require a longer timeframe (for example, building capacity in domestic supply chains and understanding the impacts of addressing market barriers) are not currently captured in the Department’s metrics.29 The Department said that there may not be a single measure that provides a link between its own contributions, export performance and UK prosperity. It plans to develop new performance metrics that will help it to understand the impact of Free Trade Agreements (FTAs), and to segment and target support better to individual companies.30
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Government response AI summary
The government explicitly disagrees, stating it already publishes a balanced suite of metrics and is developing more for priority outcomes. It commits to developing a better understanding of its impact but will not commit to publishing any specific additional metrics until their robustness is confirmed.
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HM Treasury
13
Conclusion
Twenty-First Report - Government suppor…
Rejected
The Department told us that it has recently introduced a value for money model to assess the impact of its different interventions, but it is still relatively new. It recognised that there is work to do to improve its overall evidence base, particularly how exports change over time, and to …
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The Department told us that it has recently introduced a value for money model to assess the impact of its different interventions, but it is still relatively new. It recognised that there is work to do to improve its overall evidence base, particularly how exports change over time, and to make sure that it understands the long-term impacts of its interventions.31 26 C&AG’s Report, paras 13, 1.16 27 Q 21 28 Q 21 29 C&AG’s Report, paras 22, 3.13 30 Qq 18, 22 31 Q 30 Government support for UK exporters 13 2 Supporting smaller businesses to export The challenges that small businesses face when they export
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Government response AI summary
The government explicitly disagrees with the implied recommendation, stating it already publishes a balanced suite of export performance metrics and is developing a theory of change. It commits to developing a better understanding of its impact but will not commit to publishing any specific additional …
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HM Treasury
14
Conclusion
Twenty-First Report - Government suppor…
Accepted
The Department intends to focus its bespoke support on around 230,000 businesses that have greatest potential to generate high-value exports, specifically those with a viable service or product to export and a turnover above £500,000. We were concerned that this is a small fraction of a total of 5.9 million …
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The Department intends to focus its bespoke support on around 230,000 businesses that have greatest potential to generate high-value exports, specifically those with a viable service or product to export and a turnover above £500,000. We were concerned that this is a small fraction of a total of 5.9 million businesses in the UK.32
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Government response AI summary
The government agrees and commits to continuing support for SMEs through a new £38 million Internationalisation Fund, exploring accreditation for International Trade Advisers, enhancing digital services, and promoting the 'report a trade barrier' service. These actions aim to broaden support beyond the largest businesses by …
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HM Treasury
15
Conclusion
Twenty-First Report - Government suppor…
Accepted
The Department will provide support to all other potential exporters mainly through its website services.33 However, the National Audit Office reported that businesses have low satisfaction with the Department’s digital services (under half of the Department’s clients reported that services to help them identify export opportunities were good at meeting …
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The Department will provide support to all other potential exporters mainly through its website services.33 However, the National Audit Office reported that businesses have low satisfaction with the Department’s digital services (under half of the Department’s clients reported that services to help them identify export opportunities were good at meeting their needs). In addition, use of these services is declining (registrations have dropped from 816 per month in 2018, to 450 per month in 2019, although the Department noted that businesses can use its services without registering).34 Small businesses with fewer staff may not be able to afford the time they need to use the Department’s website to identify the right opportunities, and that smaller exporters often receive little follow-up once they have registered with the website.35
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Government response AI summary
The government agrees and commits to enhancing its digital offer for exporters by iterating services to increase quality and provide relevant content, data, and digital services. This aims to address concerns about low satisfaction and declining use of existing digital support for small businesses, with …
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HM Treasury
16
Recommendation
Twenty-First Report - Government suppor…
Accepted in Part
The FSB also reported that the Department’s International Trade Advisors can vary in quality, that small businesses do not know about the Department’s ‘Report a trade barrier’ scheme and are not using it, and that very small firms do not have the opportunity to apply for a Tradeshow Access Programme …
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The FSB also reported that the Department’s International Trade Advisors can vary in quality, that small businesses do not know about the Department’s ‘Report a trade barrier’ scheme and are not using it, and that very small firms do not have the opportunity to apply for a Tradeshow Access Programme (TAP) grant.36 Pact (which represents the independent television, film and digital media production sector including many small businesses) told us that, because of the COVID-19 pandemic, many trade shows will take place virtually for the foreseeable future. However, TAP grants are not available for virtual trade shows and many businesses may not be able to attend without financial support.37 In written evidence, the Department informed us that it currently assesses the performance of TAP through its client survey but that it intends to develop ways of measuring the long- term effectiveness and impact of the programme.38 There is scope for the Department to learn from other countries, such as Denmark, about how it could better target support at individual companies.39 The department should look at how many businesses export once but not again, and the reasoning why.
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Government response AI summary
The government agrees and will explore accreditation for International Trade Advisers and promote the 'report a trade barrier' service by September 2021. However, the response does not explicitly address the recommendation regarding TAP grants for virtual trade shows or analyzing why businesses export only once.
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HM Treasury
17
Conclusion
Twenty-First Report - Government suppor…
Accepted
The FSB informed us that the utilisation of Free Trade Agreements by smaller businesses is disproportionately low when compared to larger firms. It has welcomed the inclusion of a small business chapter in the published objectives for each of the FTA 32 Q 70 33 C&AG’s Report, paras 12, 1.13. …
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The FSB informed us that the utilisation of Free Trade Agreements by smaller businesses is disproportionately low when compared to larger firms. It has welcomed the inclusion of a small business chapter in the published objectives for each of the FTA 32 Q 70 33 C&AG’s Report, paras 12, 1.13. 34 Q 34; C&AG’s Report, para 2.20 35 Q 35 36 Federation of Small Businesses written evidence to the Public Accounts Committee inquiry into Government support for UK exporters, 11 September 2020, para 6; and Qs 35–39. 37 Pact written evidence to the Public Accounts Committee inquiry into Government support for UK exporters, September 2020, para 2.1. 38 Department for International Trade written evidence dated 25 September 2020 39 Q 18 14 Government support for UK exporters negotiations with the United States, Australia, New Zealand, and Japan, respectively.40 The Department confirmed that it aims to have a chapter that is supportive of small businesses in all trade agreements.41 Failure to meet customer targets
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Government response AI summary
The government agrees to continue helping SMEs export via the £38 million Internationalisation Fund and by including SME chapters in all Free Trade Agreements. It will also explore accreditation for trade advisers, build its digital offer, and promote the 'report a trade barrier' service, with …
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HM Treasury
18
Conclusion
Twenty-First Report - Government suppor…
Accepted
In 2019–20 UKEF directly supported 199 customers, falling short of its target to support 500. A further 140 customers benefited as suppliers to UKEF-supported projects. UKEF attributes lower than expected growth in the number of customers it supports to a lack of awareness among small businesses of what UKEF offers; …
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In 2019–20 UKEF directly supported 199 customers, falling short of its target to support 500. A further 140 customers benefited as suppliers to UKEF-supported projects. UKEF attributes lower than expected growth in the number of customers it supports to a lack of awareness among small businesses of what UKEF offers; a lack of appetite from banks to support smaller exporters; declining demand from exporters; and issues with the application process for UKEF products.42 Pact has informed us that UKEF products and services are not used by the creative businesses it represents because they are not tailored to their needs.43
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Government response AI summary
The government agreed with the (implicit) recommendation, launching the General Export Facility, refreshing its marketing campaign, streamlining bank agreements for trade finance, and setting up a new team to improve buyer finance products for smaller transactions.
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HM Treasury
19
Conclusion
Twenty-First Report - Government suppor…
Accepted
UKEF said that its biggest problem is raising awareness with businesses and among the relationship managers of the banks it works with to provide export finance. UKEF encourages banks to lend by offering to guarantee up to 80% of their risk exposure, so if a bank is prepared to lend …
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UKEF said that its biggest problem is raising awareness with businesses and among the relationship managers of the banks it works with to provide export finance. UKEF encourages banks to lend by offering to guarantee up to 80% of their risk exposure, so if a bank is prepared to lend £100,000 to a company, then with the UKEF guarantee it could lend up to £500,000 to the company.44 UKEF has a marketing budget and has developed an awareness-raising campaign called Exporters’ Edge. UKEF informed us that, since the start of the campaign, awareness among small and medium-size enterprises (SMEs) has risen from 20% to 31%.45 We asked whether UKEF undertakes a customer survey. UKEF informed us that, because it has so few customers, it does not survey them directly and instead it regularly talks to trade associations.46
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Government response AI summary
The government agrees and launched the General Export Facility (GEF) in December 2020, which is expected to increase SME support. UKEF has also refreshed its "Exporters Edge" marketing campaign to promote GEF and other SME-focused products, working with banks and industry partners.
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HM Treasury
20
Conclusion
Twenty-First Report - Government suppor…
Accepted
UKEF said that from next month (October 2020), it will introduce a general working capital facility, which will be more usable for smaller exporters. It will enable them to go to their bank and get UKEF support for their total export working capital requirements rather than linking this support to …
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UKEF said that from next month (October 2020), it will introduce a general working capital facility, which will be more usable for smaller exporters. It will enable them to go to their bank and get UKEF support for their total export working capital requirements rather than linking this support to a specific export contract. UKEF hopes that this more flexible product will be a real driver of the number of small businesses that benefit from its support.47
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Government response AI summary
The government agrees and confirms that UKEF launched the General Export Facility (GEF) in December 2020, which is designed to be more usable for smaller exporters and drive an increase in SME support. UKEF has also refreshed its marketing campaign to promote GEF and other …
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HM Treasury
21
Conclusion
Twenty-First Report - Government suppor…
Accepted
In response to the COVID-19 pandemic it has also expanded the scope of its Export Insurance Policy to a wider number of markets, with the aim of protecting UK exporters from the risk of non-payment should UK exporters’ customers become insolvent or their government actions make fulfilling the contract impossible.48 …
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In response to the COVID-19 pandemic it has also expanded the scope of its Export Insurance Policy to a wider number of markets, with the aim of protecting UK exporters from the risk of non-payment should UK exporters’ customers become insolvent or their government actions make fulfilling the contract impossible.48 It also told us that it is being proactive in engaging with the renewable energy sector and has recently financed projects in Taiwan, Ghana and Spain. However, UKEF told us that its work is largely reactive and sector-agnostic, responding to demand in the market. Consequently, the lack 40 Federation of Small Businesses, 11 September 2020, paras 17, 18 41 Q 17 42 C&AG’s Report, paras 21, 3.9, 43 Pact, written evidence, September 2020, overview 44 Q 73 45 Q 75 46 Q 59 47 Qq 58, 72 48 Q 72 Government support for UK exporters 15 of a domestic supply chain in the UK in these sectors was identified as a constraint.49 The Environmental Audit Committee also noted that UKEF has been criticised for the ‘proportion of its support for the energy sector which goes to fossil fuel projects’.50 Accessing export finance outside of the five largest banks
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Government response AI summary
The government agrees to expand UKEF's 'clean and green' Export Finance Managers network, increase targeted marketing for the clean growth sector, and allocate an additional £2 billion to UKEF's direct lending facility specifically for clean growth projects, with a target implementation date of September 2021.
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HM Treasury
22
Conclusion
Twenty-First Report - Government suppor…
Accepted
The National Audit Office reported that UKEF application processes can be slow and smaller businesses would benefit from simpler requirements.51 The FSB told us that it also wanted to encourage UKEF to simplify and shorten the application process for any future export finance product.52
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The National Audit Office reported that UKEF application processes can be slow and smaller businesses would benefit from simpler requirements.51 The FSB told us that it also wanted to encourage UKEF to simplify and shorten the application process for any future export finance product.52
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Government response AI summary
The government agrees and is expanding the number of banks using the delegated approach and signing up new institutions for the General Export Facility. It is also engaging with other funders, including FinTechs, to adapt UKEF products, with an aim to implement by September 2021.
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HM Treasury
23
Conclusion
Twenty-First Report - Government suppor…
Accepted
To speed up application processes, UKEF delegated greater authority to five of the largest commercial banks who can apply for some of UKEF’s products through an online portal and can get immediate cover, and UKEF streamlined its eligibility criteria for applicants. In 2019–20, 389 applications were made through the portal, …
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To speed up application processes, UKEF delegated greater authority to five of the largest commercial banks who can apply for some of UKEF’s products through an online portal and can get immediate cover, and UKEF streamlined its eligibility criteria for applicants. In 2019–20, 389 applications were made through the portal, of which 62% were eligible for immediate cover using the online process. The digital process is quicker, but when applications do not meet the eligibility criteria UKEF reverts to a manual process, which takes on average 49 days.53
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Government response AI summary
The government agrees to expand the number of banks operating under the delegated approach and to sign up new institutions for the General Export Facility as quickly as possible, with a target implementation date of September 2021. UKEF is also engaging with other funders like …
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HM Treasury
24
Conclusion
Twenty-First Report - Government suppor…
Accepted
As it currently stands, UKEF confirmed to us that businesses who use banks other than the five with UKEF delegated authority, cannot benefit from this streamlined process. UKEF told us that it planned to expand the number of other banks that can apply for its products using an online portal …
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As it currently stands, UKEF confirmed to us that businesses who use banks other than the five with UKEF delegated authority, cannot benefit from this streamlined process. UKEF told us that it planned to expand the number of other banks that can apply for its products using an online portal ‘shortly’. First, they wish to establish the system with the existing five banks and create a single set of standard documentation.54 49 Q 68 50 Environmental Audit Committee, Nineteenth Report of Session 2017–19, UK Export Finance, para 6. 51 C&AG’s report, para 2.41 52 Federation of Small Businesses, 11 September 2020, para 10. 53 C&AG’s Report, paras 20, 2.41. 54 Qq 78, 79 16 Government support for UK exporters
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Government response AI summary
The government agrees to expand the number of banks operating under the delegated approach and to sign up new institutions for the General Export Facility as quickly as possible. UKEF is also engaging with other funders like FinTechs to adapt its products, with the first …
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HM Treasury