UKTI’s £42M cut may hit ‘ambitious’ export goal

04-Dec-2015 - Last updated on 04-Dec-2015 at 10:17 GMT

Plans to slash UKTI funding by £42M over the next four years will hit the department’s effectiveness, warned industry groups

Related tags International trade

The government’s decision to cut UK Trade & Investment (UKTI) funding by £42M over the next four years is likely to impact on the department’s effectiveness, food industry bodies have claimed.

As part of its autumn spending review last month, the government announced the UKTI budget was to reduce from £299M in 2015–16 to £277M by 2019–20, which balances out as a cut of £42M over the next five years.

Despite the budget cut, it remains committed to a £1tn export target by 2020.

The government has also promised £24M in “digital transformation funding” for UKTI, to simplify UK trade support online and join up effectively with other government services.

‘Major challenge’

Angela Coleshill, director of competitiveness at the Food and Drink Federation, said she welcomed government plans to refocus UKTI, enhancing direct support for business and simplifying its online services, “however it clearly faces a major challenge achieving all of this on a reduced budget”.

Coleshill said: “UKTI provides vital support for many food and drink exporters, but changes are needed to boost its effectiveness in order to meet the government's extremely ambitious £1tn exports target.

“Government must ensure that its export support services are more readily accessible, pulling together business opportunities with export guidance provided by DEFRA [Department for Environment, Food and Rural Affairs] and others into a single centralised location.”

The future of the UKTI is currently the subject of an ongoing Department for Business Innovation & Skills (BIS) inquiry. Iain Wright MP, chairman of the inquiry, has already claimed the £1tn export target is unachievable.

Challenging markets for manufacturers

Lee Hopley, chief economist at the manufacturers’ organisation EEF, warned that manufacturers – many of whom are already exporters – need to be assured that any change in strategy for the UKTI would not impact on their ability to operate in more challenging overseas markets.

“Any changes to current support frameworks must be clearly and simply communicated to users, so as to minimise frustration and uphold the high levels of trust companies currently place on UKTI,” she said.

An unnamed food consultancy director was more upbeat about the government's funding commitment.

He claimed the new ‘Exporting is great’ TV campaign was a good example of the UKTI’s effectiveness, adding: “I hope it encouraged UK purveyors of fine traditional British foods to consider exporting.”

The deadline for submissions to the BIS inquiry is December 11.