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PN A10

12 July 2004

Streamlined DTI to promote science and enterprise

The Department of Trade and Industry (DTI) will play a central role in the Government’s ten year science framework with 3.0% per year real terms increase in funding up to 2007-08. This is part of a one billion pound boost for UK science and innovation set out by the Government today.

The DTI will also reallocate annual efficiency savings of at least £380 million by 2007-08 to business priorities on innovation, enterprise and productivity. Policy and delivery structures will be streamlined, achieving a total reduction in civil service posts by 2007-08 of 1,010 in core DTI, 200 in UK Trade and Investment and 270 in other bodies.

Further responsibilities will be devolved to Regional Development Agencies (RDAs) supported by an increase in funding from the current £234m to £483 million by 2007-08.

Secretary of State for Trade and Industry, Patricia Hewitt, said:

“This settlement is good news for business, manufacturing and scientists. It is a package to build an environment for industrial and business success and to promote productivity growth right across the UK.”

Details

• DTI will secure at least £380 million in efficiency gains by 2007-08. The Department has committed to achieve a total reduction in Civil Service posts by 2007-08 of 1,010 in core DTI, 200 in UK Trade and Investment and 270 in other bodies. These reforms will help DTI to reduce its administration budget by 15 per cent in real terms between 2005-06 and 2007-08.
• The Government today set out a ten year investment framework for science and innovation (see PN C5). Spending Review 2004 provides DTI with additional science funding of £365 million in 2007-08, taking the Department’s science budget to £3.3 billion per year including:
  • central funding provision of £35m in 2006-07 and 2007-08 to enable Research Councils to respond more quickly and effectively to emerging priorities and opportunities;
  • additional funding of £80m by 2007-08 for the Research Councils, coupled with financial management reforms to improve the sustainability of the UK’s university research base; and
  • support for knowledge transfer from universities of at least £110m a year by 2007-08 will enable Government to respond positively to the recommendations of the 2003 Lambert review strengthening business-university collaboration, a full Government response to which is included in the ten year framework.
• New innovation funding will be channelled through the new Technology Strategy to ensure business pull through of technology from the science base, through collaborative research & development (R&D) between business and universities, and knowledge transfer networks across the UK. A new independent business-led board will, in consultation with public and private sector stakeholders, set out the key priorities for the strategy. DTI will invest at least an annual £178m in the Technology Strategy by 2007-08.
• To improve access to growth capital for small and medium-sized enterprises, the Government is making provision for a pathfinder round of Enterprise Capital Funds, worth up to £25m for each fund. Further funding will be available if the programme is successful.
• DTI will expand its support to Manufacturing Advisory Service (MAS), with funding rising to £6m a year by 2007-08, matched by the RDAs. This expansion builds on the successful work of MAS and allows it to continue to improve manufacturing performance in the UK.
• RDAs will take on new responsibilities for the Business Links service, R&D grants, enterprise in disadvantaged areas and supporting business-university collaboration. As a result of these new responsibilities, DTI’s funding to the RDAs will increase from the current £234m to £483 million by 2007-08. UKTI's contribution to the RDAs for inward investment will also be increased in the 2004 Spending Review period.
• Subject to the successful passage of the Energy Bill currently in Parliament, the settlement provides funding for the Nuclear Decommissioning Authority (NDA), which is expected to be operational from 2005-06. The Government's objective is that the NDA will improve the quality of nuclear clean-up and secure efficiencies through the introduction of competition for the management and operation of nuclear sites.

Notes for editors

1. Pre-Budget Report 2003 set out the Government’s intention to take forward a pathfinder round of Enterprise Capital Funds (ECF), which will adapt the US Small Business Investment Company model and inform any decision about the scope for a long term ECF programme.
2. Budget 2004 announced the devolution of delivery of Business Links to the RDAs from April 2005. This Spending Review announces further funding and reform to strengthen the regional economic agenda. Full details are set out in the regional press notice.
3. Media enquiries to contact HM Treasury Press Office on 0207 270 5238

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