Source · Select Committees · Treasury Committee
Recommendation 1
1
Accepted
NWF requires significant risk appetite to create new markets and boost economic growth.
Conclusion
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)
Government Response 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.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Through the Statement of Strategic Priorities, the government directed the NWF to produce a new Strategic Plan, which will be published in January 2026. This will set out how the NWF will deliver on the government’s priorities and increased ambitions. It will include: • clear performance metrics; • risk appetite and approach to risk management, acknowledging the NWF’s higher risk profile means some investments may lose value; • the use of financial instruments, including equity, debt and guarantees; • evaluation processes, and • approach to additionality and addressing crowding out concerns. The government will share the NWF’s Strategic Plan with the Committee on publication. Every year, the NWF publishes an Annual Report and Accounts (ARA) which is audited by the National Audit Office and laid in Parliament. This contains: • A Strategic Report covering the NWF’s strategic objectives, key milestones achieved, financial performance during the year, and analysis of investment activity. • An Accountability Report covering governance arrangements, compliance, remuneration and staff costs, and commentary on senior responsibilities and accountability to Parliament. • The NWF’s Financial Statements of income and expenditure for the financial year. As sole shareholder, HM Treasury holds the NWF to account through a set of core principles: • Clear expectations: set through the Framework Document, the Statement of Strategic Priorities and annual business planning. • Performance monitoring: Key Performance Indicators, agreed by NWF’s Renumeration Committee and approved by HM Treasury, are published in the ARA. • Oversight: monthly reporting, quarterly executive meetings and regular reviews of financial performance, investment activity and policy delivery. • Transparency: publication of investment information, evaluation findings and impact assessments to ensure public accountability.