Exporters face double trouble as funding falls

Financial support for exporters is planned to fall in the current financial year, despite business facing some of the toughest conditions for overseas sales for a decade.

DTI spending on trade promotion and development is set to decline by nearly 3% in the current financial year. According to figures contained in the programme of expenditure for the government agency British Trade International, the amount of cash going to the subsidiary agency Trade Partners UK for promotion will be just £66.8m.

This will rise to £70.8m in the following year, but this is less in real terms than was spent last year.

The government’s major overhaul of the provision of state assistance to exporters resulted in the creation of Trade Partners UK which co-ordinates support within the UK and through British embassies and consulates overseas.

Smaller companies concerns

But there are many exporters who are concerned that there is still neither sufficient funding nor expertise available to smaller UK companies seeking new foreign markets.

Signs are now emerging that even those services that are being provided have not been effectively ‘sold’ to potential exporters. Last week the Institute of Export met with Trade Partners UK urging the government agency to improve communications with business.

‘Many of our members are still seeking help on the question of where to get help,’ said an official at the IoE. ‘Working out where to access the kind of services overseen by Trade Partners can be very confusing. It’s really not packaged in a very user-friendly way.’

Some smaller companies have also criticised the level of financial assistance available for participation in overseas trade missions. Often companies that manage to take part are left to meet all their travel and hotel costs in full – with the exception of a grant of around £600 for, say, a mission to the Far East.

Jerry Jackson, managing director of Croydon-based testing and measurement group HW Wallace, said these sums are not enough to encourage many companies to take part in a trade mission, or overseas exhibitions.

‘At the recent Chinaplas plastics and rubber industries exhibition in southern China, the British Plastics Federation managed to get just ten UK companies to exhibit on the British pavillion, with the aid of the current government grant.

There were 60 companies on the Italian pavillion and over 100 on the German pavillion,’ he said.

Jackson also called for better quality support from British embassy staff overseas. The embassies are tasked with generating leads for visiting firms, but he said they often lack comprehensive databases and adequately trained staff. ‘Trade Partners UK should approve funding to exporters who wish to get more appropriate support from professionals in the private sector,’ he said.

A spokesman for British Trade International said the priority was to provide ‘value for money’ and that many exporters had praised the level of service provided by embassies.

Easier access to information is now being addressed by a £20m investment in the Trade Partners website and related IT infrastructure, he added.

‘The website is the one place where you can see everything that we do,’ he said.

Funding allocations

Within Trade Partners UK, around £30m annually, just under half of the annual budget, is earmarked to help new, inexperienced or occasional exporters develop their export capacity. Around £16m is allotted to more experienced exporters, while £10m goes on providing sector or market-specific support. Around £12m per year is spent on providing information to exporters, including the website.

Anecdotal evidence suggests that if companies manage to put up the cash to go on a trade mission abroad, it can pay dividends. A trade mission to Vietnam in early 1999 by a number of companies from North Staffordshire is estimated to have created orders of nearly £5m.

Similar boosts to exports were recorded by a delegation of UK computer games software companies visiting Japan.