Business and Technical Advisory Services (Hansard, 8 April 1987)

§ Mr. Butcher

The Department's business and technical advisory services offer small and medium-size firms with up to 500 employees grants towards the costs of employing expert consultants to advise on projects to improve productivity, design, quality management and marketing.

They were first introduced in 1977 to cover productivity projects. The Department built on the experience of this by introducing similar assistance for consultancy in design and quality management in 1983 and for marketing in September last year. These newer elements are aimed at improving the competitiveness of our products internationally. We are being urged by industry to do more to help improvements in these areas, particularly as regards marketing where response to the launch of the new BTAS element last year has been well over 1,000 applications so far in less than six months. We shall be increasing substantially the funds available for the marketing element in order to meet that demand.

Our general policy on assistance schemes is to operate them only so long as is necessary for improvement and 272W momentum in a particular area to be generated and sustained by industry itself. After 10 years of running the productivity element of BTAS, we now feel that stage has been reached in respect of productivity.

Consequently, the productivity element of BTAS will close at midnight tonight after which no new applications will be accepted. Commitments in relation to existing applications will however be honoured.

In recent years BTAS productivity assistance has been working with the grain of other economic factors which have led to major productivity gains by United Kingdom industry. Since 1979 manufacturing productivity has increased by over 3½ per cent. a year, a considerable improvement on the average annual growth rate of ¾ per cent. between 1973 and 1979. And, whereas in the 1970s the United Kingdom was at the bottom of the international league table, since 1979 manufacturing productivity growth has been greater in the United Kingdom than in any other major industrial country.

A full evaluation of the productivity element has been carried out by the Department's assessment unit. The main findings of the evaluation report, which will be published in due course, are that the productivity element of BTAS: had completed over 10,000 projects helping small and medium size firms up to September 1985 (the number to date is now nearer 17,000); has brought clear, quantifiable productivity benefits to a high proportion of the firms assisted; has encouraged more positive attitudes among small and medium size firms to using productivity consultants.

The Department will therefore now concentrate BTAS assistance on helping small and medium-sized firms put more effort into design, quality management and marketing. These factors are particularly relevant to the United Kingdom's business and trade prospects at this time when world economic factors now see us favourably placed to exploit United Kingdom competitiveness in markets both at home and abroad.

Assistance towards consultancy under other DTI schemes in the area of advanced manufacturing technology and the application of micro electronics will also continue to be available.

Although this means there will no longer be BTAS grants towards the costs of consultancy projects on productivity, we are considering with PERA arrangements whereby advice on the selection and use of outside consultants for such projects can continue to be made available to small and medium-size firms who need it.

We will also continue to promote awareness of the potential for productivity gains by publicising more widely some of the cases which have been so successful under BTAS.".