FOREIGN investment in Scotland went up last year – bucking the trend for the UK and Europe.

The Scottish Government has hailed the findings in the latest EY 2021 Scotland Attractiveness Survey, which confirms Scotland continues to be the most attractive location for inward investment in the UK outside London.

And the SNP says it shows how Scotland could flourish outwith the Union.

But Scotland Secretary Alister Jack warns “real challenges lie ahead” and Scotland needs UK cash to boost its fortunes. He said: “The UK Government’s sole focus is on our recovery from Covid, and boosting economic growth, jobs and prosperity across Scotland. We will accelerate investment in Scotland’s infrastructure, building on our £1.5 billion city deals programme.”

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Released today, the report reveals how Scotland recorded a 6% jump in foreign direct investment from 2019-20.

At the same time, the figure for the UK as a whole fell by 12% , with Europe suffering a 13% slump. France was the top European country for external investment.

Scotland’s digital tech, agri-food and business services are winners with overseas investors. Many of them came from the US, Ireland and the Netherlands.

Edinburgh is now the top UK city for foreign direct investment, outwith London – found to be the most attractive European city to invest – with Glasgow and Aberdeen also in the top 10 locations for investors. And Scotland’s attractiveness as an investment destination within the UK has risen to its highest ever level.

The country’s share of all UK projects has increased to 11%, thanks to a 2% year-on-year improvement. That proportion was last seen in 2015 – the only other time it’s been reached this decade. However, Scotland has been the UK location with the second highest number of overseas-backed projects – after London – in every year since 2014.

New projects in Scotland – as opposed to re-investments – had been declining for three consecutive years but have now bounced back to their highest level for five years. Meanwhile, 15% of investors surveyed by EY said Scotland is the most attractive part of the UK in which to use their funds – more than double the proportion seen in 2019.

Ally Scott, EY Scotland managing partner, said: “Beneath the headline figures, there are further reasons for optimism almost everywhere you look.”

He went on: “As we look to the economic recovery from Covid-19, constructive, practical engagement between business and both the UK and Scottish governments remains key to shaping the right policies, business environment and incentives to give investors continued confidence to invest.”

A Scottish Government spokesperson said the results “support the approach of the Scottish Government’s Inward Investment Plan to further internationalise the economy by focusing efforts on our existing global strengths”.

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The spokesperson went on: “This outstanding performance provides a strong base from which to build as we continue our national endeavour to transform Scotland’s economy and create high quality, secure and sustainable jobs across the country.”

Jack commented: “It is great that overseas investment in Scotland has increased, and that Edinburgh, Glasgow and Aberdeen are faring so well. This is encouraging news, much needed in these challenging economic times, but we know real challenges lie ahead.

“The UK Government’s sole focus is on our recovery from Covid, and boosting economic growth, jobs and prosperity across Scotland. We will accelerate investment in Scotland’s infrastructure, building on our £1.5 billion city deals programme.”

Meanwhile, an SNP spokesperson stated: “Scotland is, and always will be, a fantastic country for businesses to invest in.

“That will only flourish as we transition into an independent nation and rejoin the European Union.”