The CEO of UK Trade & Investment has told The Manufacturer that the agency’s UK field agents should take strategic guidance on export support from Local Enterprise Partnerships, endorsing the vision of the Heseltine Review.
Speaking to The Manufacturer today (Friday) about the extra £70m in funding that UKTI will receive in April 2013, announced in the Autumn Statement this week, he said LEPs should help direct UKTI’s nine regional offices on both export support for SMEs and inward investment.
Endorsing the findings of the Heseltine report, which recommend the devolution of more
power and money into the regions from Westminster, he said “increasingly we need to let the LEPs become the strategic direction-setters.”
“They would identify what we should focus on for export support in a particular region, which sectors, and which markets overseas would focus on,” he said.
When the Regional Development Agencies were abolished, UKTI moved to a single national contractor for its regional work. Mr Baird said this was undoubtedly the best decision to “reduce noise” in the bidding process for export contracts.
“When you are dealing with a large company overseas, you cannot have Manchester, then Birmingham, then another regional group coming to see them. You need a single offer, but that offer needs to be very carefully offered to consider the strengths of different areas.”
Now UKTI has memoranda of understanding with nearly all the LEPs to help articulate the strengths of the UK regional business base into a single offer to foreign companies.
When asked, Mr Baird said he thought having a UKTI representative sitting on the board of a LEP was a very good idea, but said it was up to the LEPs to select their own boards.
He added that it must be a partnership with the LEPs. “On the trade side we bring a level of international expertise that they will not possess, and for inward investment we bring that ability – through the single offer – to have very serious conversations about where they are genuinely competitive compared with other parts of the UK.”
Manufacturers often report that the trade missions organised by UKTI to new markets are good for introductions but less important than reducing the cost of exporting, and reducing the time required to receive export licenses. Mr Baird agreed that both were a priority, and said features of the new funding – such as vouchers for export services for eligible companies – would reduce the cost.
In the Autumn Statement, Chancellor Osborne announced that UKTI would receive a 25% increase in its budget, a further £70 million a year.
The Autumn Statement money is split into three main parts (see box), says Baird, with the greatest benefit targeted at small and medium sized businesses.
UK Trade & Investment says it will also link this combined work with credit lines provided by UK Export Finance.
“Take the work in Brazil,” says Baird. “With that campaign we’ve given Petrobras a £1bn export credit line to purchase from UK companies, and there’s an additional £1.5bn coming into UK Export Finance from the Autumn Statement to do those projects. The new £1.5bn is for precisely this sort of project.”
How UKTI’s new money will benefit companies who are exporting
Four parts to the UKTI’s new money:
1. Strengthen business-to-business support that is provided to Chambers of Commerce overseas in top 20 emerging markets.
“In Brazil you’ll see a fantastically powerful German chamber there to support, particularly, German SMBs,” said Baird. “There is a much, much smaller British chamber – we will be developing that.”
2. Lowering costs for smaller SMEs, and mid-size companies, to trade into emerging markets
i) Every company that takes the UKTI’s Passport to Export programme receives a credit or voucher which can be spent on export services.
ii) UKTI pledges to double the number of business who can benefit from the TAP programme – UKTI subsidises companies to display their products at overseas trade exhibitions.
iii) Discounting services to SMEs trading for the first time into emerging markets, such as market intelligence reports and business matching.
3) Doubling of the High Value Opportunities programme. The programme is a consortia of businesses covering primes, their supply chain, and finance companies, with more leverage than individual companies. The consortia are given access to major overseas projects, especially infrastructure and energy projects such as the Delhi-Mumbai industrial corridor.