DBIS performing well, say MPs

15 Dec 09
The Department for Business, Innovation and Skills has performed well since it was created in June this year, according to a select committee report
By Jaimie Kaffash

15 December 2009

The Department for Business, Innovation and Skills has performed well since it was created in June this year, according to a select committee report.
The business, skills and innovation select committee said that bringing together the higher education and business sectors was a positive move. The merging of the departments of innovation, universities & skills and business, enterprise and regulatory reform had been achieved within budget, it added. However, it also raised concerns that the management of the 40 ‘delivery partnerships’ with executive agencies could prove to be risky.

Conservative MP and committee chair Peter Luff said: ‘In the real world the two sectors rely on each other, and this relationship is now mirrored in Whitehall. We hope that the department is now given the time to deliver the benefits that should flow from  this change.’

He told Public Finance that he initially had reservations that the department was a ‘vanity project’ for Business Secretary Lord Mandelson, but the changes had proved to be a logical step and would help in cutting costs.

‘I think many of us were sceptical about the motives for the establishment of the department. But whatever the motives may have been, it looks to have been a good one,’ he said.

The committee emphasised that stability was vital, especially after the demise of Dius after only 23 months. Luff was confident that the department could survive the loss of Mandelson or an incoming Conservative administration. ‘I do think such a big department doing such important work needs a senior figure to lead it. If Ken Clarke were to become the business secretary were the Conservatives to win it, I’m sure he would be a very good candidate,’ he added.

The resistance from the higher education sector to the merger had largely subsided, Luff said.
But the report raised concerns about the numerous agencies under the department’s remit. It quoted the permanent secretary, who said he had ‘sleepless nights’ about the management of the partnerships.

‘It is quite an alphabet soup of delivery partners,’ Luff said. ‘A lot of them are essential – you could not abolish the Office of Fair Trading or the Competition Commission. But if there is scope for rationalisation, they should pursue it and I am sure the permanent secretary will. Some of them are performing very well, but there are some that must improve. The one that must go as soon as possible is Postcom. That should have been merged into Ofcom.’

The committee also criticised the Automative Assistance Programme, which was set up under the BERR and was designed to support the car industry through the provision of loans. However, no loans have been made since it was established in March this year.
‘The fact of the failure is blindingly obvious. The reasons behind this are elusive and we deliberately didn’t speculate in the report. We know people privately say that civil servants in the department have been too risk averse,’ Luff said.

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