Source · Select Committees · Public Accounts Committee
Recommendation 4
4
Accepted
Develop focused investment targets with DLUHC to promote economic growth in levelling up areas
Conclusion
The Department is not yet doing enough to encourage investment into the areas of the UK where it can have the most impact on local economic growth. The Department aims to focus on high-value investments that support government’s wider objectives including on levelling up and promoting growth across the UK. However, there is variation across the UK in the number of new jobs that the Department estimates will be created through investment projects supported in 2021–22. We note that more jobs were created in London, than in total in Scotland, north-east England, north-west England, and Yorkshire and the Humber. The Department has added a new target to its internal performance framework on supporting investments that lead to over 35,000 new jobs outside London and the South East in 2022–23. However, this target does not differentiate between UK nations and regions so investment will not necessarily go to where it can make the most difference. The Department accepts that the target is a blunt instrument and is working with the Department of Levelling Up, Houses and Communities to develop a more granular focus. The Department also agrees that it needs a deeper understanding of the relative strengths and competitive advantages of different parts of the UK and has further work to do on this. Recommendation 4: The Department should work with the Department for Levelling Up, Housing and Communities to develop a more focused target for supporting investment across the UK, which reflects that Department’s levelling up objectives and is directed at the geographical areas where investment is most needed. For example, the Department for Business and Trade could consider a target for supporting investment 10–15 miles outside of a city centre.
Government Response Summary
The government agrees and is actively working with the Department for Levelling Up, Housing and Communities on several initiatives to better target investment across the UK. These include developing a deeper understanding of regional strengths, supporting UK Freeports and Investment Zones, delivering a Key Account Management Programme in the North and Midlands, and promoting High Potential Opportunities outside London and the South East.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. efforts to encourage investment across the UK. The department’s published inward investment results for 2022-23 shows many areas outside London and the South East have seen significant gains in foreign direct investment compared to previous years. Working with the Department for Levelling Up, Housing and Communities and other government departments, the department has several areas of work in progress to better target its support at the geographical areas where investment is most needed. This includes: • working across government and with external experts to develop a deeper understanding of the relative strengths and competitive advantages of different parts of the UK. This will inform not just the targeting of the department’s promotion efforts but also policy development and advocacy efforts, reflecting that for some areas improving their overall business environment can increase their ability to attract investment. • working with UK Freeports to establish each as a national hub for global trade and investment; including support in developing and implementing their go-to-market strategies and providing targeted investment promotion and support services to encourage inward investment. • engaging on the Investment Zones programme; bringing expertise from across the department to help places shape and inform their sector-market focus for investment, and scoping the department’s support for each Investment Zone once they are fully mobilised. • delivering the Key Account Management Programme in the North and Midlands which provides additional targeted strategic account management to regionally important foreign owned companies so that they are retained, grow, and reinvest. • promoting High Potential Opportunities to investors, with 40 out of the 43 opportunities located outside of London and the South East.