Plans for productivity need clarity to be achievable, government told » SMEInsider

Plans for productivity need clarity to be achievable, government told

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MPs have slammed the government’s plan to boost UK productivity, claiming that it lacks detail and measurable objectives.

A report published today (1 February) by the Business, Innovation and Skills Committee examining the government’s Productivity Plan – aimed at improving UK productivity growth – concluded that the document lacked “sufficient focus and clear, measurable objectives to be called a ‘plan’”.

The Productivity Plan was launched last year to address stagnant productivity, which stalled at 14 per cent below the level that would have been achieved if trends seen before the recession had continued.

 

The devil is in the detail

However, the BIS committee’s report said the plan was “too vague and long”, and urged the government to provide more clarity in order to avoid it being “destined to collect dust on bookshelves across Whitehall”.

Recommendations include that the government produce a clear, supplementary document outlining how each policy will be implemented and its success measured.

This should be regularly updated with progress against key milestones and dates, and parliament should be able to hold ministers to account.

 

Support for SMEs

Among the strategies set out in the Productivity Plan was to help small firms to become successful. The ability of small businesses to upscale, the plan said, was crucial to sustaining GDP growth, employment and exports, and that “helping small businesses to improve their productivity will benefit the whole economy”.

But today’s committee report highlighted that SMEs must have better access to affordable finance if this is to become a reality. The government must therefore provide clarity around “how it plans to address this market failure helping to match growth funding to firms with high growth and productivity potential”.

 

A ‘clear and distinctive roadmap’

Commenting on the committee’s report, Mike Cherry, national policy director for the Federation of Small Businesses, said: “Closing the productivity gap is the best way to boost the long term health of the UK economy. It’s key to reducing the budget deficit, and delivering higher wages and living standards.

“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.

“Small firms have an important part to play and our latest research shows steady improvement in productivity among our members. What is clear is these efforts require a long-term focus from both government and the private sector if the UK is to close the gap with our competitors.”