Report highlights lack of foreign investment in rural areas

Research commissioned by the County Councils Network (CCN) showed that the per-capita ratio of foreign direct investment (FDI) projects in England’s 36 county areas is just half of that of England’s big cities that have access to devolved powers.

The report Global Britain, Global Counties: Attracting Foreign Direct Investment reveals that despite success in attracting investment over the last four years, local leaders are ambitious to go further.

Despite the Levelling Up Secretary Michael Gove beginning discussions with nine county areas in February, deals have only been agreed in three of these.

CCN is calling for government to conclude negotiations with all nine areas as soon as possible, then begin a fresh wave of county deals before the end of the year with the ultimate ambition of two-thirds of county areas having a deal in place or have started discussions by the end of this Parliament.

Speaking at the CCN Conference, its Chairman Cllr Tim Oliver said:

“We are uniquely placed to attract investments in both new and traditional industries and locating in county areas creates more jobs than other parts of the country.

“But despite this, county areas lag behind the major cities and London when it comes to FDI, which is unevenly spread across the country. The cities are the ones with devolution deals where they can pull the levers that make places more attractive to investors, so it is vital the government turbocharges devolution to the county areas currently at an economic disadvantage.

“If we are to level up the country, then government must unshackle county areas. In order to maximise investment in all four corners of the country, county local authority leaders must have all the tools available at our disposal.”

Rohan Malik, EY UK&I Government and Infrastructure Leader, said:

“While the report’s findings highlight that the UK as a whole remains a leading destination for inward investment, there are deep-rooted inequalities between regional economies which won’t be reversed overnight. The Government’s announced freeze on capital spending after 2025, alongside the increasingly significant financial constraints faced by local authorities, means that the opportunity for the private sector to play a role in addressing these inequalities has never been greater.

“Attracting foreign direct investment, and business investment more generally, is a key lever to stimulate regional growth with. The potential for local authorities to attract greater private sector investment is there, but it will require a combined approach with business, central government and local authorities working closely together and taking action for the long term.”

The research is based on the EY UK Attractiveness Survey data from 2018 – 2022.

FDI projects have been mapped to mapped to mayoral combined authority (MCA) and upper-tier authority destinations. FDI project data has been analysed within standard EY European Investment Monitor breakdowns, and drivers of FDI have been drawn from the EY Attractiveness Survey and through testing FDI project data against local indicators.