THE BLOG

The UK Business Department Must Partner With Industry, Not Rule Over It

27/03/2014 10:55 GMT | Updated 26/05/2014 10:59 BST

Despite being the government department charged with representing the interest of business around the Cabinet table, the Department of Business, Innovation and Skills has worryingly little direct input from the business sector when it comes to conducting their own work.

A series of Parliamentary Answers received by me show that from March to December 2013, a grand total of 23 private sector secondees worked in the Department. Even fewer civil servants, out of a pool of nearly 3000 Whitehall staff, were seconded out to the private sector during that time.

Some of the destinations for secondees included UK Research Councils, LOCOG (the Olympics organising committee), the BBC and the European Union - hardly what most would call the private sector, and certainly not the strategic industries that government should be focussing on.

At a time when the Business secretary, Vince Cable is claiming to be driving a resurgence of UK industrial policy, this is worrying. Industrial policy requires close integration between government and the economic sectors that it is trying to support, and this necessitates an open dialogue that private sector secondments would be able to contribute to.

Among the inward and outward secondees, those working in manufacturing and small business are largely absent. Yet, small businesses, particularly those trading on the High Street, are subject to a range of pressures that civil servants would do well to understand better. A scheme to second more senior civil servants to manufacturing and export-focussed SMEs would certainly give Whitehall's mandarins a better view of the challenges the sector faces.

As Lord Adonis argues in his 2013 report for the Labour Party, A Smarter BIS, the department must forge industry partnerships as strong as the successful Automotive Council if the industrial policy aims are to be met. He also makes the point that BIS is over-centralised. Its London office accounts for almost all its central staff, and BIS staff outside of London now number only 180. Similarly, there are only six BIS Local offices, which must represent huge geographical areas. It's easy to see why understanding how government can best help small business is a difficult task for these small teams.

Lord Adonis goes on to argue that the recruitment and retention of staff within BIS is extremely poor (something the BIS select committee has found when reviewing the department's staff surveys). Civil servants rising up through the ranks via the Fast Stream lack commercial skills and few training opportunities are presented for tuition in these areas. Secondees from key industries, and an increased focus on hiring experienced private sector managers and specialists could have a transformative effect on departmental culture. If encouraged to challenge the status quo, outsiders could bring valuable knowledge and expertise to BIS.

Instead of taking a hands-on approach to driving growth in the economy, BIS Ministers seem more concerned with arbitrarily reducing regulations (almost every businessperson I meet with tells me they their priority is better regulation rather than how much), which explains the dearth of legislation from the department over the last few years. The department's industrial policy papers are relatively lightweight, and Vince Cable's Business Bank lacks the ambition to make much of a difference to business financing.

The department must overhaul its operations and adapt from being a regulator and overseer of business to a partner, aiding the strategic development of our key industries with the authority that a seat at the Cabinet table should bring.