The new Scottish National Investment Bank is set to benefit from an additional £2 billion in funding over the next ten years according to Economy Secretary Keith Brown; a move that could further boost Scottish economic growth.
In Holyrood yesterday, Keith Brown confirmed to MSPs that ministers had considered and accepted the 21 recommendations for the Bank and that a bill will be brought forward in 2019 to establish and capitalise the bank.
Mr Brown confirmed that the bank will operate on a commercial basis and maintain a strong ethical focus. Additionally, the bank will be independent from ministers who set strategic missions for the Bank; thus allowing it a great degree of freedom and ability to operate on its own while aligning with Scottish economic policy. Mr Brown highlighted the need for strong national investment programmes as Scotland looks to become a world-leader in a host of industries. He said: “Many countries around the world benefit from having national investment banks which provide patient, strategic investments that focus on the major economic challenges.
“National banks play an important role in actively creating and shaping new markets”.
Mr Brown added that the £2 billion investment is: “deemed to be ambitious, achievable and realistic at a level that will make material difference to the supply of capital to the Scottish economy”.
The vision laid out as part of the SNIB plans will see the Bank’s board responsible and accountable for decisions over where to invest, as well as setting missions for the Bank itself. The Scottish Government says it is committed to establishing the new institution as a public body so as to ensure direct alignment between the bank and the government’s economic policy.
The board will determine what types of investment are focused on by the bank in the coming years, these include but are not limited to:
- Strategic and patient capital over all stages of firms’ and businesses investment life-cycle
- Substantial financing for major projects which support regeneration and communities and
- Investment in new ideas, to help meet key economic, environmental and social challenges
Implementing Scotland’s Vision
The Scottish Government’s council of economic advisers underlined the need for an increase in capital to surge business investment and innovation in Scotland and to support long-term growth ambitions across a number of sectors and emerging industries. Last autumn, First Minister Nicola Sturgeon laid out plans for the bank as part of the 2017-18 Programme for Government.
Benny Higgins, the former CEO of Tesco Bank, was asked to develop the Implementation Plan to provide the Scottish Government with recommendations on the role, remit, governance and capitalisation of the Bank. The Implementation Plan was published on February 28th (found here) and covers a variety of topics such as:
- The role of Existing national promotional banks
- Alignment to Scottish Government Policies
- The bank’s vision and mission-based approach
- Proposed financial activities
- Classification and capitalisation of the bank
- Suggested governance structures
- A recommended transition plan
Speaking on Tuesday, Keith Brown said the Scottish Government plans to: “further refine its expectations of the Bank, and the missions set for it, through consultation with stakeholders.”
He added: “We will listen to their expectations and priorities for investment and governance of the Bank.”
Russell Dalgleish – Co-Founder of the Scottish Business Network and Founder of Exolta Capital Partners – believes the introduction of the Bank is a positive step for the continued development of Scottish business and enterprise. With a vibrant digital sector continually on the rise, investment from the SNIB could further fuel Scottish innovation.
He said: “The establishment of the new bank introduces a strategic investor into the Scottish landscape. With access to capital critical to build a successful technology company the introduction of the new bank must be welcomed.”