Harrington Review calls for 'fundamental shift' to close annual £50bn foreign direct investment gap

investmentweek.co.uk:

'We have heard time and again about government systems that are too often disorganised, risk-averse, siloed, and inflexible when it comes to the needs of modern investors.'

Richard Harrington, key adviser to Chancellor Jeremy Hunt and chair of the Harrington Review, said most of the UK's competitors «have about 12% of GDP in business investment, both domestic and foreign».

Meanwhile, the UK's equivalent stands at 10%, which represents a difference of £50bn a year. To tackle that gap, he recommended the creation of a new business investment strategy by spring 2024.

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In the review documents, presented alongside Hunt's Autumn Statement on Wednesday (22 November), he said: «We have heard time and again about government systems that are too often disorganised, risk-averse, siloed and inflexible when it comes to the needs of modern investors.

»We have developed a system where civil servants and politicians alike will do anything to de-risk a decision, by shoving financial decisions to a series of semi arm's length institutions as well as a series of ‘competitions' as a system of allocating taxpayers' money."

Harrington said the current system is «all too slow and cumbersome» and the government needs to provide a «fast, tailored, responsive and comprehensive offer», which meets the expectations of investors.

Part of this is due to the government's organisation into different and separate departments, causing confusion for potential investors, he said.

As a result, Harrington called for a cross-government model to «break down department silos». He recommended appointing a senior minister to head up the new business investment strategy at a cabinet level, «with dedicated