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The UK's Department for Business and Trade (DBT) has been advised by the public spending watchdog to improve its business practices and transparency around spending, or face a possible negative impact on growth.
The call comes as worries about national trade policy reach a fever pitch and anxiety around the rate of UK growth ramps up.
A report released today by the National Audit Office (NAO) evaluated the potential impact of the government's forthcoming industrial strategy, looking at how DBT is structured and how it works with other departments.
Issues identified include a limited view of overall government spending on business support; a lack of transparency when making decisions to support industry; and difficulty in influencing other departments to change policy.
"[DBT] has engaged extensively with industry stakeholders to understand their needs and developed sector plans using its knowledge of the economy," the report said. "It also shares its business intelligence widely across government."
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Despite this, the department does not have a complete overview of what it and wider government spends supporting industry — hindering its ability to make sound decisions in the future and allocate resources strategically, the report adds.
"DBT is not yet working effectively across Whitehall to provide a unified voice for business," said Sir Geoffrey Clifton-Brown MP, chair of the Committee of Public Accounts.
"It also lacks an overall picture of where taxpayers’ money is being spent to support sectors and which interventions work when."
A DBT spokesperson said: "Growth is at the heart of everything we do, and we have robust systems in place to monitor, deliver and evaluate grant funding to ensure it provides value for money.
"Our modern Industrial Strategy will prioritise the high growth sectors most promising for future prosperity, creating the right conditions for increased investment and ensuring a lasting impact in communities across the UK.”
The suggestions come at a delicate time for the government, which set out its stall as a pro-growth party in last year's election campaign.
The latest figures show that the UK economy experienced a modest growth in the final three months of 2024, alleviating immediate concerns about a potential recession. Figures released by the Office for National Statistics (ONS) showed a 0.1% increase in gross domestic product (GDP) for the three-month period ending in December.