Source · Select Committees · Public Accounts Committee
Fifty-Sixth Report - Supporting investment into the UK
Public Accounts Committee
HC 996
Published 9 June 2023
Recommendations
3
Accepted
Review digital team capacity and priorities to assess impact on investment transformation programme
Recommendation
Insufficient digital capacity is putting the Department’s plans to increase its impact at risk. The predecessor Department for International Trade had begun implementing an investment transformation programme that aims to deliver additional economic benefits of £135 million over five years …
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Government Response Summary
The government agrees with the recommendation, detailing steps taken to address digital capacity challenges such as a blended staffing mix, a specialist DDaT pay framework, and recruitment of over 100 civil servants. It assesses the impact on the Investment Transformation Programme as minimal, with a new digital service on track for piloting and CRM improvements delivered.
HM Treasury
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7
Accepted
Review government bodies supporting investment and align priorities and formalise working relationships
Recommendation
The recent machinery of government changes provide the Department with an opportunity to review its alignment with other government bodies that support investment. There are various governmental bodies that can support investment in the UK, such as the British Business …
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Government Response Summary
The government agreed, noting ongoing work to integrate the new department and existing formalised relationships with devolved governments and local authorities. It committed to undertaking an internal assessment to review engagement with other bodies and recommend additional guidance, while also highlighting the role of the new Business and Growth Group and the Harrington Review in aligning priorities.
HM Treasury
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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 …
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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.
HM Treasury
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28
Accepted
Consider formalising relationships with the UK Infrastructure Bank to enhance investment support
Recommendation
We asked the Department whether it planned to formalise its relationships with the various government bodies that work to support investment through memoranda of understanding as it had done with UKEF. The Department said it did not have current plan …
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Government Response Summary
The government agrees and will undertake an internal assessment to review its engagement with other bodies supporting inward investment, aiming to recommend any additional guidance needed to support these relationships. It also notes existing close working relationships and the ongoing Harrington Review to improve linkages.
HM Treasury
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Conclusions (10)
4
Conclusion
Accepted
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. …
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.
6
Conclusion
Accepted
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 …
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.
13
Conclusion
Accepted
The Department aims to deliver additional economic benefits of £135 million through its ongoing investment transformation programme. As part of this programme it plans to create a more tailored service offer for different types of investor and provide new online services for managing lower-value investments and simple investor queries.29 It …
Government Response Summary
The government agrees with the observation regarding the risk of a lack of digital capacity. It details existing mitigation strategies, including a blended staffing mix and a specialist DDaT pay framework, stating that capacity challenges have not constrained the Investment Transformation Programme.
14
Conclusion
Accepted
We asked the Department what it was doing to mitigate this risk. It told us that it was concerned that the formation of the new Department from its predecessor departments had placed additional pressures on its core digital team and that the digital team was reviewing its priorities. The Department …
Government Response Summary
The government agrees with the observation regarding the risk of a lack of digital capacity. It details existing mitigation strategies, including a blended staffing mix and a specialist DDaT pay framework, stating that capacity challenges have not constrained the Investment Transformation Programme.
15
Conclusion
Accepted
The Department aims to support the government’s levelling up objectives by prioritising investments that promote growth throughout the UK.35 It records the numbers of FDI projects it supports in each region and its forecasts of the number of new jobs each investment is expected to lead to.36 In 2021–22, 57% …
Government Response Summary
The government agrees and states that Levelling Up is a key priority. It details several ongoing workstreams to better target support for investment in areas outside London and the South East, including developing regional understanding, working with Freeports and Investment Zones, and promoting High Potential Opportunities.
16
Conclusion
Accepted
We asked the Department why there is such a bias towards London in the number of jobs forecast to be created, noting that for London this figure is 16,000, which is more than the combined total for Scotland, the north-east of England, north-west England and Yorkshire and the Humber.38 The …
Government Response Summary
The government agrees that Levelling Up is a key priority and describes several initiatives to better target investment support and promote opportunities across the UK, thereby addressing the historic bias towards London and the South East.
17
Conclusion
Accepted
For 2022–23, the Department has introduced a new target to support investment in projects that contribute to levelling up.40 We asked the Department how it defines projects that contribute to levelling up.41 It told us that it counts everything that is not in London or the South East, which we …
Government Response Summary
The government agrees and confirms that Levelling Up is a key priority, detailing several ongoing workstreams to develop a deeper understanding of regional strengths and competitive advantages to better target investment support in areas most needed.
18
Conclusion
Accepted
The National Audit Office found that the Department does not have a clear overview of the relative strengths of local areas across the UK in different industry sectors to help it identify the most suitable projects for investors.43 The Department said that it is fair to ask whether it has …
Government Response Summary
The government agrees and is undertaking several workstreams to develop a deeper understanding of the relative strengths and competitive advantages of different parts of the UK, which will inform targeting of promotion efforts and policy development.
26
Conclusion
Accepted
In addition to the core government departments, there are other government bodies who work on maintaining and increasing the UK’s attractiveness to investors. For example, we recently reported on the creation of the UK infrastructure bank which was launched by the Treasury to encourage private finance alongside public investment, and …
Government Response Summary
The government agrees with the committee's point regarding the department's role in aligning government bodies that support inward investment. It commits to an internal assessment by February 2024 to review existing engagement and recommend additional guidance, alongside ongoing integration efforts and the Harrington Review.
27
Conclusion
Accepted
UK Export Finance (UKEF) is the UK’s export credit agency. Its products include an ‘invest to export’ offer for overseas investors looking to export from the UK.70 We asked the Department whether it had a good relationship with UKEF and whether UKEF’s products were incentivising new investment into the UK. …
Government Response Summary
The government agrees with the committee's point on ensuring alignment among government bodies supporting inward investment. It commits to undertaking an internal assessment by February 2024 to review existing engagement and recommend any additional guidance required, with work already underway and the Harrington Review investigating improvements.