Fifty-Sixth Report - Supporting investment into the UK
Select Committee
Public Accounts Committee
HC 996
9 June 2023
Government response
Treasury minutes: Government response to the Committee of Public Accounts on the Fifty-sixth report from Session 2022-23 · published 24 Sep 2023
Recommendations & Conclusions
8 results
2
Recommendation
Acknowledged
Review major supported investments to assess actual long-term benefits and wider economic impacts
Recommendation
The Department focuses more on securing investment deals in the short term, rather than understanding the long-term economic benefits from investment. Inward investment can support economic growth and local economies by developing new infrastructure and skills, creating jobs and by …
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Government Response Summary
The government agrees with the recommendation and acknowledges challenges in accurately estimating economic impact and evaluating performance due to missing data. It states it will seek to improve data quality and ways of working in this area.
HM Treasury
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1
Conclusion
Acknowledged
Department for Business and Trade created by combining BEIS and DIT functions
Conclusion
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Business and Trade and its Office for Investment about supporting investment into the UK.1 In February 2023, the government created the …
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Government Response Summary
The government agreed, outlining its strategic ambitions and existing use of official statistics for measuring investment outcomes. It committed to exploring the feasibility of expanding investor surveys, including those who abandoned plans, and will define a timeframe for this within 12 months, as it continues to evaluate data and identify different approaches through international organizations.
HM Treasury
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10
Conclusion
Acknowledged
Department's inward investment job forecasts impacted by early dropouts and exclude wider economic impacts.
Conclusion
The Department records potential long-term benefits of inward investment such as the salary level of the jobs expected to be created and export potential, and reports its forecasts of the number of new and safeguarded jobs that are expected to …
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Government Response Summary
The government agrees with the observation and acknowledges difficulties with data quality in estimating economic benefits and second-order impacts. It commits to seeking improvements in its ways of working to improve data quality in this area.
HM Treasury
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11
Conclusion
Acknowledged
Risk of diminished long-term inward investment benefits if companies move operations or listings abroad.
Conclusion
In some cases, there may be fewer long-term benefits from inward investment than originally forecast if, for example, foreign investors choose to move parts of their operations, jobs and skilled UK staff overseas.24 We heard about the cases of Japanese-owned …
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Government Response Summary
The government agrees with the observation that long-term benefits may be fewer than forecast. It states its focus is on landing, retaining, and expanding UK presence, and commits to seeking improvements in data quality for estimating economic impact.
HM Treasury
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12
Conclusion
Acknowledged
Department lacks routine long-term monitoring and evaluation for inward investment project outcomes.
Conclusion
The Department does not routinely monitor what outcomes have been achieved, whether they are higher or lower than forecast, or whether investments have led to any economic disbenefits.27 We asked the Department how many of the jobs it forecasts at …
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Government Response Summary
The government agrees with the observation that long-term outcomes are not routinely monitored. It acknowledges issues with data quality in estimating economic benefits and commits to seeking improvements in its ways of working in this area.
HM Treasury
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23
Conclusion
Acknowledged
Office for Investment established to enhance cross-government coordination on high-value investments.
Conclusion
The Department said the Office for Investment was set up to improve cross-government coordination on high-value strategically important investments, as the government recognised this was an area for improvement. It said that the Office for Investment was able to leverage …
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Government Response Summary
The government agrees with the observation, stating it actively engages with investors through existing fora like the Investment Council and annual surveys. It acknowledges the need for further steps to coordinate investment promotion and will implement relevant recommendations following the Harrington Review.
HM Treasury
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24
Conclusion
Acknowledged
Department has strengthened inter-departmental working, but further development is still needed.
Conclusion
The NAO report found that the Department had strengthened how it worked with other government departments to present a more coherent UK offer to investors, including through the creation of the Office for Investment, but that there were opportunities to …
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Government Response Summary
The government agrees with the observation, highlighting existing engagement mechanisms like the Investment Council and annual investor surveys. It acknowledges that further steps are necessary to improve cross-government coordination on investment promotion and will implement relevant recommendations following the Harrington Review.
HM Treasury
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25
Recommendation
Acknowledged
Investors require greater long-term clarity and policy route maps from government.
Recommendation
We received written evidence from investors who wanted more long-term clarity on government policy. For example, the Global Infrastructure Investor Association said there should be greater focus in government on setting out route maps for investors against clear timelines, particularly …
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Government Response Summary
The government agrees with the recommendation and states it actively engages with investors through existing fora like the Investment Council and annual surveys. However, further steps to coordinate investment promotion and set out route maps will be determined and implemented following the conclusion of the Harrington Review.
HM Treasury
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