The Government is not doing enough to encourage foreign investment into areas of the UK outside London and the South East, MPs have warned.

An economic bias remains “baked into” the system, leaving barriers to the levelling up agenda, the Commons Public Accounts Committee said.

The group has told the newly formed Department for Business and Trade (DBT) it cannot continue to “fly blind” on how its work affects investment.

In 2021/22, 16,000 of the jobs forecast to be created were in London – more than the total across Scotland, north-east England, north-west England and Yorkshire and the Humber combined.

The DBT has set a target to support investments that lead to more than 35,000 new jobs outside of London and the South East from 2022-23.

But the committee said this fails to distinguish separate nations and regions within the UK, meaning money will not necessarily end up where it can make the most difference.

It made seven recommendations for how the department could make the most of opportunities surrounding investment into Britain, including developing more “granular focus” on such targets.

The DBT should also survey investors who decide against financial backing to establish why and “take a systematic approach to learning lessons”, the committee said.

Deputy chairman of the committee and Conservative MP Sir Geoffrey Clifton-Brown said: “Our report is more confirmation that economic bias towards London and the South East remains baked into the system. DBT cannot continue to fly blind on how its work impacts and supports investment.

“Such projects have the potential to transform entire communities with much-needed jobs and growth. Government must learn lessons at pace on how it is best placed to help make the UK an attractive destination for inward investment in a competitive field.

“It is welcome news that Government targets are to be set to support investment outside London and the South East. But greater precision and leadership are needed from Government to guide projects into areas of the UK as a whole, where there is potential for them to have the most impact.”