Source · Select Committees · Public Accounts Committee
Recommendation 9
9
Accepted
Department's investor surveys are limited and fail to capture wider strategic impacts.
Recommendation
However, the Department only surveys investors who have chosen to invest in the UK. It does not seek views from investors who have decided against investing to find out why they did not. Its survey also has a low response rate.16 The Department’s methodology does not capture its impact on wider strategic objectives such as levelling up, achieving net zero and the UK becoming a science superpower.17 We asked the Office for Investment how it tracks its performance. It told us that it has only worked on around 50 projects so far, so it does not survey investors. It said that its understanding of its impact is mostly based on qualitative feedback and lessons learned exercises conducted after projects are won or lost, on which it also elaborated in written evidence provided after our evidence session.18 We also asked the Department what it is doing to understand how other countries support 7 Foreign Direct Investment is defined as an investment reflecting a lasting interest from a foreign investor or enterprise in a UK enterprise where the overseas investor owns 10% or more of the enterprise and aims to have an ‘effective voice’ in its management. 8 C&AG’s Report, para 3.12 9 Q 25 10 C&AG’s Report, para 12 11 Qq 21, 25, 59–60 12 Q 39 13 Q 61 14 Q 22 15 C&AG’s Report, para 3.16 16 Q 22; C&AG’s Report footnote 10 17 Q 22 18 Qq 47–52; Letter to the Chair of the Public Accounts Committee from Gareth Davies, DBT Permanent Secretary, 20 March 2023 Supporting investment into the UK 11 inward investment.19 It said that it looked at approaches by other countries in 2019, and uses its contacts with investors, multilateral fora and overseas posts to understand how investment promotion agencies in other countries operate.20 Securing long-term economic benefits
Government Response Summary
The government agrees and aims to deliver by June 2024. It will explore the feasibility of expanding its investor surveying to include those who decided against investing in the UK and will work to define a timeframe for this within 12 months.
Government Response
Accepted
HM Government
Accepted
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.