The article reports on significant job cuts anticipated within UK government departments responsible for attracting inward investment and boosting British exports, as Whitehall insiders have revealed. Despite commitments by the chancellor and prime minister to increase investment in the UK and stimulate economic growth, these reductions in staff numbers have been proposed.
A source close to the discussions indicated that employees at the Department for Business and Trade had been cautioned about potential staff reductions ranging from 30 to 40 percent, as part of plans to merge two units responsible for promoting the UK as an investment destination. Another individual mentioned that there are plans for extensive cuts to export promotion teams during a spending review process that requires departments to justify their staffing levels from scratch.
The Department for Business and Trade stated it did not recognize the speculated 30 to 40 percent cuts, emphasizing that no final headcount decisions had been made. Officials acknowledged, however, that the review, concluding in the spring, presents challenging decisions for all Whitehall departments.
Trade unions have raised concerns about the restructuring, although the Public and Commercial Services union, representing over 190,000 civil servants, declined to comment. Meanwhile, the cuts to inward investment staffing coincide with a merger between the 25-person Office for Investment and the larger inward investment promotion directorate in the Department for Business and Trade.
Sir Keir Starmer had previously pledged to enhance the Office for Investment alongside appointing Baroness Poppy Gustafsson as the minister for investment. Plans are reportedly in place to transform the Office for Investment into the main agency for promoting investment, following recommendations from Lord Richard Harrington’s 2023 review of the UK’s investment landscape.
This enhanced role will involve strengthening connections with regional mayors and utilizing combined authorities to develop local investment proposals. Tom Pope, deputy chief economist at the Institute for Government think-tank, noted the economic rationale for using mayoral combined authorities to attract foreign direct investment but highlighted a gap in staff and expertise at these authorities.
Despite its expanded role, two insiders noted that merging the Office for Investment with the business department’s investment directorate is expected to result in net staff reductions. According to internal discussions, cuts of up to 40 percent in staffing have been communicated to employees.
Jordan Cummins, head of the CBI’s UK competitiveness department, described the necessity of both augmenting the Office for Investment and making headcount reductions as part of the spending review. He emphasized the importance of creating a responsive and transparent new body that assists investors and mayors.
The UK’s trade performance has been weak since Brexit in comparison to other G7 countries, with trade as a share of GDP down 3.5 percent from pre-pandemic levels, according to the Office for National Statistics. William Bain from the British Chambers of Commerce expressed concern over potential cuts to export promotion activities, stressing the need for targeted investment in boosting exports.
The business department reiterated the vital role of trade and investment in government economic growth objectives and affirmed its commitment to supporting British businesses in exporting and attracting investment. The department is in the process of establishing a more efficient investment promotion agency to enhance investor services and drive economic growth.
