Issue brief - Future of the DTI

EEF believes that the current structure of the DTI and business support structure is not sustainable and needs reform. In particular, the current overlap with the Treasury as to which department is responsible for driving the productivity agenda and promoting economic growth causes confusion. It also leads to the DTI being seen as of marginal importance.

However, EEF considers it is too simplistic to abolish the DTI completely and split its functions into other government departments. The DTI currently has four key functions which will have to be carried out somewhere within government. These are:

- Trade promotion

- Fair Markets (Competition and Regulation)

- Business Support

- Science and Innovation

EEF believes there should be three key priorities to drive the productivity agenda, promote economic growth and support business:

1. A single government department responsible for the overall

co-ordination of strategy and delivery of the productivity agenda which includes the current five core functions of the DTI.

This could be the, DTI, Treasury or, a new department which specifically focuses on economic growth and productivity and is distinct from the management of the nation’s finances.

Less important than the name of the department is the fact that it must be represented at senior level within the Cabinet.

2. A single Department for Infrastructure which would include responsibility for energy, transport and planning. There are clear synergies between these functions which are a vital component of economic performance. They could be grouped together in a single department taking a strategic approach to infrastructure policy. This would have a clear remit for promoting economic growth and engaging with business.

3. A commitment across government to the promotion of competitiveness. This should be entrenched in the PSA targets or business plans of all government departments that take decisions which affect the competitiveness of business.

To underpin this we believe that these departments should follow best-practice models employed elsewhere in government in terms of stakeholder engagement. Specifically we believe that each needs a dedicated interface for engaging with business.

EEF believes that bringing these functions together, along with planning into a single ‘Infrastructure department’ could provide much needed focus to addressing the crucial challenges of improving the UK’s infrastructure.

However, whilst there is an argument that infrastructure issues are linked to the Climate Change agenda it would be a mistake to move them into DEFRA. These policy areas are critical to UK economic performance and should not be dominated by the environmental agenda alone.

EEF also considered moving responsibility for skills to the DTI or its successor. However, on balance, it concluded that skills should stay in Department for Education & Skills given the importance of the relationship between skills and education. But both must have a strong relationship with business.