Source · Select Committees · Public Accounts Committee
Recommendation 6
6
Accepted
Engage with industry to influence government action on investment barriers and review OFI lessons
Conclusion
Government is not doing enough to ensure that efforts to attract foreign investment are well-coordinated across Whitehall. Other departments and government bodies hold many of the policy levers that influence the attractiveness of the UK to investors, such as tax, regulation, and visa requirements. The Department works with other departments to support investment into specific sectors and shares investors’ views about barriers to investment to help ensure that departments consider investor perspectives in their policy making. OFI’s convening powers, supported by its association with the Prime Minister’s Office in Downing Street, has helped improve cross-government working. The Department also told us it has good relationships with counterparts in HM Treasury, although it would like to do more to influence the Treasury on, for example, providing tax incentives that encourage inward investment. However, some other departments are not receptive when the trade department approaches them. The Department is also looking at how it can improve its processes for working with devolved administrations who have a role in supporting investment into their nations. Some investor and industry representatives believe government could do more to engage with industry and provide greater policy certainty and a consistent approach across government, particularly on nascent technologies. Recommendation 6: The Department should engage with industry and investors to understand what they need from government and consider how it can influence other government departments more effectively to help tackle barriers to investment. It should also review lessons learned to date from the work of the OFI.
Government Response Summary
The government agreed, highlighting existing engagement mechanisms like the Investment Council and annual surveys, and committed to implementing relevant recommendations from the upcoming Harrington Review in September 2023. It will also provide an update on its OfI workshops in the next Treasury Minute.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. government, and how the department can coordinate action across Whitehall to tackle barriers to inward investment. The Investment Council provides a regular forum to gather investor feedback, including from CEOs and company founders. The Council provides a platform to coordinate and aggregate intelligence from investors’ experiences of doing business in the UK into insights that support the department’s policymaking. In addition to this, the department’s analytical function surveys investors annually, including on the barriers that investors face. The department is working on improving this process and increasing the response rate. Despite this existing engagement, the department recognises that further steps are necessary to coordinate investment promotion effectively across Whitehall. The Harrington Review is a key milestone, as one of the key focus areas for the report will examine how the department can extend the benefits of working across government on investment in key sectors. Following the publication of the report in September 2023. The department will look to implement any relevant recommendations. The department has also held workshops with the Office for Investment (OfI) and relevant department teams, particularly in relation to the OfI’s creation and impact on cross-Whitehall working. The department will provide an update to the Committee in the next Treasury Minute progress report on the conclusions of this work, including where these could support the department’s investment promotion efforts in the future. Upon the conclusion of the Harrington Review, the department will take further appropriate action to improve the department’s approach to cross-government working on investment promotion.