CBI recommendations included in government’s Productivity Review

Last week the Department for Business, Energy and Industrial Strategy published its Productivity Review. This comes off the back of a consultation launched last year that sought to look at what firms could do to support greater business efficiency and growth.

The CBI responded to the consultation at the time and the review highlights the CBI’s finding that boosting the productivity of the UK's SMEs to match that of Germany could add up to £100bn to the economy and improve the competitiveness of UK business. To help achieve this, the government has focused on improving businesses access to knowledge and best practice, workplace skills and supporting better self-assessment.

The review contains many CBI recommendations, chiefly from our ‘From Ostrich to Magpie’ report, including:

• The publication of a clear plan for increasing adoption of tested technologies and management best practice as a central theme within the Industrial Strategy
• Increased funding for Knowledge Transfer Partnerships.
• Better working with organisations such as Be the Business to disseminate messaging and support to small businesses to improve business practices.

These recommendations make up a ten-point government action plan. Other actions include:

• £20m to strengthen local peer to peer networks in England focused on business improvement so business leaders can share expertise on leadership, business development and technology adoption.
• Development of an evidence base for productivity through the recently announced Productivity Institute and the BEIS Business Support Evaluation Framework.
• £11m to create a Small Business Leadership Programme to provide small business leaders with leadership training, building on existing programmes such as Be the Business' Productivity Through People, Lancaster University's LEAD and Goldman Sachs 10,000 Small Businesses Programme.
• Improving the customer experience for businesses accessing online government information and services addressing how businesses can grow domestically and internationally.
• The industry-led Professional and Business Services Council (co-chaired by a BEIS Minister and industry lead) will develop an action plan to increase SMEs use of professional business support services and make it easier for SMEs to find support.
• Working with stakeholders such as Be the Business and sector councils to provide SMEs with business mentors.
• Commissioning the Behavioural Insights Team to run a series of trials on how best to communicate with small businesses to encourage them to take action to improve their productivity.

What’s our verdict?

The CBI has been vocal in asking the government to provide a clear framework for how it planned to address the UK’s longstanding productivity puzzle by supporting greater business innovation, especially among SMEs. The Productivity Review shows that government is listening to the needs of business and its action plan is a strong foundation for future interventions.

It is positive that government has highlighted this as an opportunity to inform and influence the development of large scale funding projects such as the UK Shared Prosperity Fund. This will help to ensure vital future support is targeted at the challenges facing local businesses and meets specific regional needs.

The CBI has consistently stated that business and government will need to work closely together to address productivity challenges. It is right for the review to highlight the importance of the Made Smarter initiative and the Be the Business movement. These programmes have seen the introduction of a suite of business support tools, including benchmarking applications and mentoring schemes.

The Made Smarter North West Pilot has already begun to have an impact on the area and has the ambitious goal to increase regional GVA by up to £115m. Targets such as these cannot be met without continued government support. That is why in our latest budget submission we called on the government to provide the necessary funding for these two programmes to continue their work at their current pace.

In short, we cannot afford to ease our focus on productivity. As the UK prepares to go through a period of economic transformation the next government must ensure these close ties of cooperation are maintained, so they, like any organisation experiencing disruption, are able to react with the agility and innovation needed to continue to thrive.