London remains main target for foreign investment
London continued to attract more foreign direct investment than any other UK city last year, prompting calls for a wider distribution of funds across the country.
The capital attracted 73 per cent of the total 624 projects secured in 2018, according to research by EY and the Centre for Towns.
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The level of investment into the UK’s 12 largest cities has increased from 31 per cent in 1997 to 59 per cent in 2007, with London dominating the list.
However, Edinburgh, Leeds, Manchester and Newcastle upon Tyne more than doubling the number of FDI projects in the ten-year period.
The called for more investment in the UK’s towns and rural communities after research found that manufacturing FDI projects in former industrial and university towns fell by 50 per cent last year.
Over the last 20 years, large towns – with a population of more than 75,000 people – have seen their share fall from 26 per cent to 17 per cent.
EY chief economist Mark Gregory said: “The towns and conurbations on the periphery of the UK’s core cities are facing unprecedented economic challenges, but what is particularly worrying is how deep the economic disparity between cities, towns and smaller communities has become over the last 12 months.
“Core cities have been far more successful in attracting FDI while levels of investment in other locations has at best flatlined over the past 20 years.
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“UK economic policy has tended to be based around core cities and this is likely to have exacerbated the geographic disparities in attracting FDI. With Brexit being one of a range of challenges facing the UK economy it is vital that a new approach to FDI policy, centred on geography, is developed as a priority.”
In total, 34 per cent of foreign investors said the availability of transport and technological infrastructure was an important factor when choosing a location to invest, while 32 per cent said the local skills base was a key criteria.
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