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February 05, 2016

UK productivity plan "lacks clear objectives"

UK productivity plan "lacks clear objectives"The Government's Productivity Plan "lacks clear, measurable objectives" according to a new report from the Department for Business, Innovation and Skills.

The Government unveiled its Productivity Plan in 2015; it covers 15 different policy areas, from transport and energy to finance and infrastructure. In its review, the BIS Committee has called on the Government to set out more clearly how it is going to implement the plan and measure its success.

Iain Wright MP, chair of the BIS Committee, said: "In recent years other countries have stormed ahead with productivity gains and we need to catch up. As a committee we welcome the Government's focus on tackling this crucial issue for the UK economy."

However, Wright described the plan as a "vague collection of existing policies". He added: "The analysis in the Government's plan is good, but the milestones for implementing improvements are virtually non-existent. If the Productivity Plan is going to avoid collecting dust on Whitehall bookshelves … then the Government needs to back it up by setting out how these policies are going to be implemented and how their success will be measured."

The Committee has expressed concern about the potential damage to business R&D investment from the Chancellor's decision to convert £165m in grants to loans. It is calling on the Government to explain the rationale behind this shift in policy. It has also raised concerns about the Government's apprenticeship strategy.

Commenting on the BIS review, Dr Adam Marshall, executive director of policy at the British Chambers of Commerce (BCC), said: "A strategy is only good if it results in real-world outcomes, and the Government's productivity plan is no exception. Successive Governments have understood many of the problems, but Whitehall schemes have only made a marginal impact. Skills shortages, infrastructure bottlenecks and limited growth finance have long constrained investment and dampened productivity. A laser-like focus on delivery is required if we are to achieve the productivity gains we need."

Research by the Federation of Small Businesses (FSB) suggests productivity is rising among its members. However, Mike Cherry, FSB national policy director, said more needs to be done. "For too long UK productivity has trailed our international competitors and this needs to be addressed. The Committee is right to press hard for a clear and distinctive roadmap as to how Britain will close our productivity gap."

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