Source · Select Committees · Public Accounts Committee
Recommendation 17
17
Acknowledged
Department lacks standardised approach for balancing metrics in industry support decisions
Conclusion
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
Government Response 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.
Government Response
Acknowledged
HM Government
Acknowledged
4.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2026 4.2 The government is aligning industry support with strategic priorities, including the Industrial Strategy. Following the Green Book Review 2025: Findings and actions policy paper publication in June, new ‘place-based business cases’ will assess complementary projects in specific regions. Supplementary guidance on economic resilience will ensure private sector contributions are consistently appraised. The department and HM Treasury will work with ISAC, the Industrial Development Advisory Board and other bodies to address barriers and maximise the impact of business-facing funds on jobs, skills, resilience, regional growth, small businesses, and net zero. 4.3 The government defines top-level objectives for the growth mission by increases in Gross Domestic Product (GDP) per capita and Real Household Disposable Income. The Industrial Strategy supports both by enhancing productivity, the key long-term growth driver. 4.4 Invest 2035: The UK’s Modern Industrial Strategy, a Green Paper and public consultation document published in October 2024, identified the eight growth-driving sectors using indicators such as output, productivity, and international position. The department also assessed the fronter industries where government intervention could have the greatest impact. This identified over 30 ‘frontier industries’ within the IS-8 growth-driving sectors, as well as eight supporting ‘foundational sectors and inputs’ which are critical to frontier industries’ success. critical to frontier industries’ success. 4.5 There is no one-size-fits-all method for identifying which frontier industries have the most growth potential. The department drew on a variety of quantitative and qualitative evidence, including responses to the Invest 2035 consultation and an extensive programme of expert engagement to test its assessments. Frontier industries were selected based on growth potential and alignment with strategic objectives (net zero, regional growth, resilience). Assessments used mixed evidence and scoring methods (Likert scale, RAG rating) and were moderated by multiple assessors. The high-level approach to this was set out in the Technical Annex published alongside the main Industrial Strategy. 4.6 Foundational industries and strategic inputs were also analysed using qualitative and quantitative evidence, including consultation responses. A new supply chain centre will refine this work with industry.