Report finds that DIT must continue to tackle a shortfall of digital specialists and needs to implement new software systems

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Government’s public-spending watchdog has flagged the importance of a major technology transformation programme in enabling the Department for International Trade to better target its efforts in attracting billions of pounds of investment into the UK.

The trade department also needs a greater understanding of the UK’s regional strengths and competitive advantages to aid its work driving foreign investment, according to a new report from the National Audit Office.

The NAO said foreign direct investment projects supported by DIT had contributed to a forecast £7bn in gross value added to the UK economy in 2021-22 – a 128% increase on the figure for 2019-20.

However, auditors’ report said that the total inflow of foreign direct investment into the UK in 2021 – which includes investment not supported by DIT – was half the amount it had been in 2012. It gave a figure of $26.7bn for 2021, not adjusted for inflation.

As part of its work to boost the UK economy, the DIT is currently engaged in an investment transformation programme, the aim of which is to “make better use of new technology” to enable the department to devote greater focus to higher-value investments and simplify existing processes.

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The programme is intended to generate economic benefits to the UK of £135m, and deliver 36,700 new jobs and safeguard 464 existing jobs between 2022-23 and 2026-27”, according the NAO report. Some £26m is being spent on the implementation of the scheme over the next two years but, by 2028, the “DIT estimates the programme will increase the economic benefits from every pound it spends on investment support by 40p and provide net savings of £4.2m per year”. 

Auditors noted progress that has been made in tackling challenges faced by the programme, including a recruitment drive that, between July and October last year, reduced the project’s shortfall of digital and data professionals from 22% to 12%.

“However, the capacity of the Digital Design and Technology team, which is critical to delivering important elements of the programme as well as other initiatives across DIT, remains a considerable risk,” the NAO said.

Next year, the DIT also faces a need to upgrade its customer relationship management software platform.

“The current system is not used consistently across DIT and does not have the functionality staff need, such as the ability to manage their flow of work, so they resort to manual workarounds,” the report added. “DIT has conducted research to understand user requirements and it is making short-term improvements to the current system. It has not yet decided whether to build or buy a replacement system and in the meantime will continue with the current system until the end of 2023.”

In addition to pressing on with the rollout of new technology, the NAO said that the DIT needed to coordinate its work more closely with the Department for Business, Energy and Industrial Strategy, and the Department for Levelling Up, Housing and Communities, as well as with local authorities, devolved nations and other local bodies.

In particular, the NAO said that DIT had yet to develop a “UK-wide overview” of local strengths, including skills, infrastructure and supply chain opportunities, and how it will market these to attract further investment.

“Devolved administrations and trade associations we consulted consider that it would be helpful for DIT staff engaging with investors to have a greater understanding of the relative strengths and competitive advantages of the nations and regions of the UK,” it said. “Devolved administrations also told us there was scope for DIT to clarify how its UK-wide trade and investment hubs will support investment across the UK.”

NAO head Gareth Davies said increasing inward investment was critical for UK productivity and would support economic growth and – as a result – the amount of money available for public services.

“Success in attracting greater investment in part relies on knowing UK strengths compared with its competitors,” he said. “Better understanding across the UK’s nations and regions can help present a coherent offer to prospective investors, and improving coordination across Whitehall could reap rewards.”