Source · Select Committees · Public Accounts Committee
Recommendation 3
3
Accepted
Consolidate understanding of industry support and improve reporting to inform future decision-making.
Conclusion
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.
Government Response 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.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Recommendation implemented The UK’s Modern Industrial Strategy was published alongside the Spending Review and its priorities are embedded in departmental budgets for the remainder of this Parliament. Each of the IS-8 growth-driving sectors also has a bespoke 10-year Sector Plan, underpinned by R&D and infrastructure commitments. Government departments are required to monitor and evaluate policy delivery and impact. Departments already track their support to businesses; for example, the department can break down its business support grants by sector. The department 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 (e.g. using company microdata) to assess policy effectiveness and economic trends. This analytical programme will be developed in partnership with ISAC to support the Industrial Strategy’s monitoring and evaluation.