<a href="https://www.thenationalnews.com/world/uk-news/2023/01/23/uk-foreign-investment-bounces-back/" target="_blank">The UK is still near the top of the table for international investing</a>, but the government could be doing more to attract and facilitate foreign direct investment, according to Britain's National Audit Office. A report from the NAO found <a href="https://www.thenationalnews.com/world/uk-news/2023/01/24/eurozone-chances-of-escaping-recession-higher-than-uk/" target="_blank">that Britain held the second highest levels of FDI stock in the world</a>, at $2.6 trillion in 2021, and during that year inward investment amounted to $27.6 billion, which included investments not supported by the Department for International Trade (DIT). Since 2019, the number of FDI projects the DIT has supported has fallen by 19 per cent to 1,174. But the value of the projects has jumped by 128 per cent. Meanwhile, the number of UK jobs created and supported by FDI in 2021 was 84,759, an increase of 52 per cent on the year before. The DIT has also changed the way it approaches FDI, by concentrating on high-value investments that relate to the government's levelling-up and net-zero goals. “Previously it had aimed to support as many investments as possible and did not strongly differentiate the support it offered by project value. We found that DIT’s new strategy was clearly understood across the organisation,” the NAO said. The NAO found that the DIT could also better understand the nature of local areas across the UK, and increasing investment opportunities. Administrators and trade associations in the UK's regions told the NAO that while the DIT had produced an “investment atlas of Britain” to help potential investors identify areas and sector, it was not enough. “ [The] DIT has not developed a UK-wide overview of local strengths, including skills, infrastructure and supply chain opportunities, and how it will market these,” the NAO said. The NAO added that it would be useful if DIT staff had “a greater understanding of the relative strengths and competitive advantages of the nations and regions of the UK.” The NAO's report also looked the scrutiny procedures that foreign investors undergo when looking to place FDI into the UK. It found that “the current approach to due diligence is disjointed and the level of screening varies across teams.” The DIT is also developing new tools to help screen potential investors, which following the invasion of Ukraine are designed to establish that they are compliant with UK sanctions on Russia. The NAO is investigating whether foreign investors believed the DIT had helped them. A survey in 2020 found 89 per cent of investors were satisfied with the information and advice the DIT had given and 76 per cent said the department had provided useful contacts. In 2022, 74 per cent of investors surveyed by DIT said they “definitely or probably” would have invested in the UK, regardless of whether the DIT supported them or not. “Ultimately investors will invest because it makes commercial sense, but the OFI [the Office for Investment — part of the DIT) considers it can play a key role in ‘getting deals over the line’ by building strong relationships across government,” the NAO said. The NAO's report card on the DIT was broadly positive, with just a few areas of concern. But it emphasised that the DIT cannot facilitate FDI on its own — attracting and keeping foreign investment is a team effort. “Attracting inward investment requires the co-ordination of multiple departments which hold policy levers. The DIT needs to work in a joined-up way across government and local bodies to present a coherent UK offer to investors.”
