Recommendations & Conclusions
5 items
1
Conclusion
12th Report - National Wealth Fund
Accepted
The NWF making an overall positive rate of return is key to its success and sustainability. To achieve its objectives of boosting economic growth and clean energy, however, the NWF must have the risk appetite to invest in projects that the private sector regards as too risky. Risk appetite is …
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The NWF making an overall positive rate of return is key to its success and sustainability. To achieve its objectives of boosting economic growth and clean energy, however, the NWF must have the risk appetite to invest in projects that the private sector regards as too risky. Risk appetite is also required for the NWF to be catalytic, because the NWF must create new markets in, for example, hydrogen both to make a real difference to economic growth in the UK and to enable the UK to meet its targets to help tackle climate change. (Conclusion, Paragraph 24)
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Government response AI summary
The government agrees and will publish the NWF's new Strategic Plan in January 2026, which will detail its performance metrics, risk appetite, use of financial instruments, and evaluation processes as recommended.
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HM Treasury
2
Conclusion
12th Report - National Wealth Fund
Accepted
It is important to understand that some companies that the NWF invests in will fail, and the NWF will lose the value of some of its investments. This, in itself, cannot be a cause of criticism of the NWF, because it should have a higher risk appetite. Indeed, if none …
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It is important to understand that some companies that the NWF invests in will fail, and the NWF will lose the value of some of its investments. This, in itself, cannot be a cause of criticism of the NWF, because it should have a higher risk appetite. Indeed, if none of its investments fail that suggests that it does not have a sufficiently high-risk appetite. (Conclusion, Paragraph 25)
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Government response AI summary
The government describes the NWF's mandate, substantial capitalisation, and statutory footing, which provides for an independent review and reporting on impact, aligning with the understanding that high-risk investments will sometimes fail.
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HM Treasury
4
Conclusion
12th Report - National Wealth Fund
Accepted
The NWF is not a conventional sovereign wealth fund that invests wealth generated from natural resources to benefit future generations. Therefore its name, the National Wealth Fund, could be misleading. The NWF is financed by the Government from taxation and borrowing, which means that its investments are likely to attract …
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The NWF is not a conventional sovereign wealth fund that invests wealth generated from natural resources to benefit future generations. Therefore its name, the National Wealth Fund, could be misleading. The NWF is financed by the Government from taxation and borrowing, which means that its investments are likely to attract public, political and media scrutiny and that the Government may face pressure to privatise it. Despite those challenges, the success of the NWF’s forerunner, the Green Investment Bank, in stimulating the offshore wind market while generating returns provides 20 a reason for cautious optimism that the NWF will deliver its investment priorities in relation to clean energy. However, the current NWF’s size could limit its strategic impact on economic growth. (Conclusion, Paragraph 31)
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Government response AI summary
The government explains how the NWF already aligns its investments with government strategies and focuses on priority sectors, aiming for a triple bottom line. It also notes the NWF's Strategic Plan will detail its focus and mentions initiatives to leverage pension capital and other investment.
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HM Treasury
8
Recommendation
12th Report - National Wealth Fund
Accepted
The NWF must invest strategically, deploying its funding to align with government strategies, such as the Industrial Strategy and the Pensions Investment Review. (Recommendation, Paragraph 43)
Government response AI summary
The government agrees the NWF should align its investments with government strategies, confirming the NWF already delivers against a triple bottom line, and its forthcoming Strategic Plan will detail this focus on priority sectors.
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HM Treasury
9
Recommendation
12th Report - National Wealth Fund
Accepted
Political interference would create a climate of uncertainty for investors and ultimately reduce the NWF’s capacity to attract private capital and promote growth. We were therefore reassured to hear from the former NWF Chief Executive that the NWF has not been subject to political interference. The Treasury must maintain that …
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Political interference would create a climate of uncertainty for investors and ultimately reduce the NWF’s capacity to attract private capital and promote growth. We were therefore reassured to hear from the former NWF Chief Executive that the NWF has not been subject to political interference. The Treasury must maintain that approach. (Recommendation, Paragraph 48)
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Government response AI summary
The government strongly agrees the NWF must remain operationally independent to maintain market confidence and attract private capital, confirming this is ensured through its experienced fiduciary Board and a clear Framework Document.
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HM Treasury