Scottish National Investment Bank: Fairer Scotland Duty assessment

Fairer Scotland Duty Conclusions and Recommendations

The Fairer Scotland Duty Assessment recommends that the Programme Team:

1. review the ancillary objects contained within the Scottish National Investment Bank Bill as drafted to best align the objectives of the Bank with the purpose of the Fairer Scotland Duty, utilising its position as a 'cornerstone in Scotland's economic architecture' to shape an economy that is diverse, democratic and enhances societal wellbeing.

2. develop a series of metrics against which to assess the contribution of the Bank towards reducing socioeconomic disadvantage in Scotland. These metrics should seek to assess the performance of the Bank in this regard across the full range of its activities to develop a holistic picture its contribution. This could be achieved through the balanced score-card approach referenced in the Implementation Plan and the Economy, Energy and Fair Work Committee's Stage 1 Report.

3. ensures that the voice of those with lived experience of poverty is represented in membership of the Advisory Group so that Scottish Ministers have access to expert advice on the contribution of the Bank in helping to reduce socioeconomic disadvantage and ensuring that the Bank evolves its activities in response to the changing characteristics of poverty over time.

This Fairer Scotland Duty Assessment concludes that the Bank should consider how it can:

4. in light of the findings of this Fairer Scotland Duty Assessment, contribute to an investment landscape which actively removes barriers to accessing finance for socioeconomically deprived entrepreneurs. The Bank should consider the development of financial products that are tailored to the needs of these businesses where they are not already available through other bodies. Where necessary the Bank should conduct or commission robust and transparent analysis of the gap in provision of credit for these businesses to inform its role. Similarly, the Bank may also consider its role in relation to removing barriers to accessing finance for microbusinesses and firms with company models that democratise the economy.

5. support relevant partners across the public sector to improve awareness among entrepreneurs about the types of financial products available to them when seeking to start or scale up their business, and develop core skills required to make their business a success. In addition, the Bank can communicate its suite of financial products to other lenders so that they are fully aware of the finance available and can refer entrepreneurs and businesses seeking such support, where appropriate.

6. positively contribute to market intelligence and formation of evidence-based decisions by improving understanding in the market place of access to finance issues, especially those arising from information asymmetries in relation to some firms, for example those companies that contribute to reducing socioeconomic disadvantage such as microbusinesses, including establishing and publicising the accessibility of those categories of firms to lending by financial institutions.

7. work with the businesses that it invests in to embed Fair Work First. A tailored approach to embedding these informed by engagement with the business community should be adopted to avoid stymieing demand from SMEs and from organisations that deliver social value in other ways, such as charities. With reference to reducing inequalities of outcome arising from socioeconomic disadvantage within the context of the Fair Work principles, training and upskilling of staff can have particularly positive outcomes for businesses that receive investment and their employees.

8. encourage those businesses that it invests in to join a business association or to find other networking opportunities that will enable them to learn and share best practice with those who have similar growth, innovation and business practice ambitions.

9. introduce community benefit clauses aimed at reducing inequalities of outcome arising from socioeconomic disadvantage as loan covenants to particularly significant high value investments where relevant. This may include encouraging organisations who receive large sums of money from the Bank to review their procurement practices to, for example, incorporate more Scottish and locally-based businesses into their supply chain where possible.