Source · Select Committees · Public Accounts Committee
Recommendation 8
8
Not Addressed
Department acknowledges marginal added value of its inward investment support, despite GVA calculations.
Conclusion
The Department acknowledged that most investment would still happen without its support and that its added value is marginal. It said that businesses would still decide to invest in the UK, but they would find it harder, and some investments would not happen.13 The Department told us that it has calculated the Gross Value Added (the economic impact) of the investment it has supported, and estimates that for every £1 it spends on inward investment, there is an impact of at least between £5 or £6 on GDP.14 The Department also estimates that between 4% and 8% of UK FDI projects would not happen with its support, although it considers this to be a low estimate.15
Government Response Summary
The government's response discusses plans to explore expanding investor surveying to include those who abandoned investment plans, and evaluating data from other agencies. It does not directly address the committee's observations regarding the department's existing estimates of its added value and economic impact.
Government Response
Not Addressed
HM Government
Not Addressed
1.1 The government agrees with the Committee’s recommendation. Target implementation date: June 2024 1.2 In the Department for Business and Trade’s, (previously the Department for International Trade) (the department or DBT) Outcome Delivery Plan for inward investment promotion, the activity is designed to deliver against cross-government strategic ambitions. These include strengthening national wealth, making the United Kingdom a science and technology superpower, accelerating the shift to net zero, and supporting levelling up. Combined with the department’s pursuit of attracting and supporting more higher value investments, the department’s contribution will be in greater employment and stronger gross value add investments. As an example of this, the department’s Official Statistics can be used to identify three key indicators through a levelling up lens: projects landed and associated new jobs created; and investments and new jobs created from Ten Point Plan investments and research and development investments. 1.3 The department will explore the feasibility of expanding on the department’s existing surveying of successful investors the department has supported in a financial year. This will include survey options for investors that abandoned their plans to invest in the UK. The department recognises the learning options contained in this advice. 1.4 The department continues to evaluate the data that is available for analytical purposes relating to the operations and achievements of other investment promotion agencies. Such information is typically kept away from the public domain, but the department will use opportunities through international organisations and other avenues to identify different approaches to investment promotion. 1.5 The department will work to define a suitable timeframe for this in the next 12 months.