Scottish National Investment Bank: Fairer Scotland Duty assessment

Background To The Scottish National Investment Bank

1. The Scottish Government's Council of Economic Advisors highlighted the important role that national investment banks play in providing long-term investment to support economic growth in many European countries. In the Programme for Government 2017-18, the First Minister announced plans to establish a Scottish National Investment Bank. Former CEO of Tesco Bank, Benny Higgins, supported by a small advisory group, led the work on developing an Implementation Plan. The Plan was published in late 2018 following a public consultation.

2. The Cabinet considered in detail the proposals outlined in the Implementation Plan and responded to the plan in a Parliamentary debate in May 2018 agreeing to accept all 21 recommendations. In the Programme for Government 2018-19, the First Minister announced plans to introduce legislation to formally underpin the Bank. Having received Parliamentary support, the Scottish Government are now taking forward the implementation of these recommendations under various workstreams. In the Draft Budget 2018-19, the Scottish Government announced the Building Scotland Fund (BSF) as a precursor to the Bank.

3. As a public limited company the Bank is required to have set out in its Articles of Association its company objects; these are provided in the Bill. The main object for which the Bank is established is the giving of financial assistance to commercial activities for the purpose of promoting or sustaining economic development or employment in Scotland. The Bill also sets out ancillary objects for the Bank in pursuit of its main object.

4. The Bank will in general take a mission-based approach to its investment. Scottish Ministers will set out missions for the Bank to guide its activities and ensure alignment between the activities of the Bank and Scottish Government policy. The missions set for the Bank are expected to be assessed every 5 years. Any amendment of the missions, or development of subsequent missions, will also be informed by the review which the Bill requires Scottish Ministers to commission at least every 5 years.

5. The Bill was laid before the Scottish Parliament on 28 February 2019 and was scrutinised by the Economy Energy and Fair Work Committee (the Committee) across May and June of that year. The Committee published its Stage 1 Report on the Bill was published on 4 July 2019 and made a series of recommendations to the Scottish Government regarding possible changes to the Bill and to features of the Bank. The includes a recommendation to clarify the wording of the ancillary objects within the Bill to enshrine the delivery of social value as a key role of the Bank.