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Select committee: Treasury Committee

12th Report - National Wealth Fund

HC 806 Published 28 October 2025

Treasury Committee National Wealth Fund Report on parliament.uk ↗

At a glance4 recommendations and 6 conclusions · Government response published 15 January 2026 (deadline 28 December 2025)

The government's response

Summary written by Accountability Index from the government's response. It is not the government's own words.

The government's response says it agrees with the Committee on strategy and reporting, alignment with government strategies and operational independence, and has "no current plans" to let the National Wealth Fund borrow directly from private markets.

  • On Recommendation 1, the government "agrees" and says a new Strategic Plan will be published in January 2026, to include performance metrics, risk appetite, use of financial instruments, evaluation processes and its approach to crowding out. It will share the plan with the Committee on publication.
  • On Recommendation 3, the government "strongly agrees" that public financial institutions must work together. It says its review of the landscape "concluded the landscape is well-positioned to deliver government priorities", after examining the merits of merging institutions.
  • On Recommendation 5, the government "strongly agrees" the NWF must remain operationally independent. HM Treasury will issue strategic steers "judiciously", with updates "only in exceptional circumstances" and published online.
  • On Recommendation 6, it states it has "no current plans" to enable direct market borrowing, saying the NWF has "sufficient unused capital" for this Parliament. Once existing capacity is exhausted, HM Treasury "will assess" the most value-for-money approach to further capitalisation.

Read the government's response ↗ Report an error

Sources

Recommendations and conclusions 10

  1. 1
    NWF requires significant risk appetite to create new markets and boost economic growth. Conclusion · addressed to HM Treasury Conclusion (the committee's words)
    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)
  2. 2
    Acknowledge expected investment failures as a sign of appropriate National Wealth Fund risk appetite. Conclusion · addressed to HM Treasury Conclusion (the committee's words)
    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)
  3. 3
    Outline comprehensive performance metrics, risk appetite, evaluation methods, and taxpayer benefit in the new NWF Strategy. Conclusion · addressed to HM Treasury Conclusion (the committee's words)
    The new NWF Strategy must outline: a. its performance metrics, including its risk appetite; b. how it will use equity and a range of financial instruments to ensure that the taxpayer shares in the upside of any risks it takes; c. how the NWF will be evaluated, how often and by whom; d. how the NWF would respond to any feedback that it is crowding out private investment. (Recommendation, Paragraph 26)
  4. 4
    National Wealth Fund's name is misleading; its limited size may hinder strategic economic impact. Conclusion · addressed to HM Treasury Conclusion (the committee's words)
    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)
  5. 5
    Mitigate early privatisation risks of the National Wealth Fund by measuring its societal benefits. Conclusion · addressed to HM Treasury Conclusion (the committee's words)
    The current Government should try and find ways to mitigate the risk of future governments privatising the NWF too early, by ensuring its societal benefits are measured and acknowledged. (Recommendation, Paragraph 32)
  6. 6
    Co-ordinate NWF liaison with British Business Bank and Innovate UK to support scaling businesses. Conclusion · addressed to HM Treasury Conclusion (the committee's words)
    The NWF will need to liaise effectively with other public financial institutions to facilitate growth. In particular, it will have to co-ordinate with the British Business Bank and Innovate UK to support businesses that are scaling up. (Conclusion, Paragraph 41)
  7. 7
    Outline collaboration among public financial institutions and re-examine merging British Business Bank and NWF. Recommendation · addressed to HM Treasury Recommendation (the committee's words)
    The new NWF strategy must explicitly state how those public financial institutions will work together to ensure that businesses that are scaling up can seamlessly obtain support without gaps or duplication. The Treasury should re-examine the potential merits of merging the British Business Bank and the National Wealth Fund. The Treasury must also better publicise the Office for Investment to ensure that it works effectively as a one-stop advice shop for businesses. (Recommendation, Paragraph 42)
  8. 8
    Invest National Wealth Fund strategically, aligning funding with key government strategies. Recommendation · addressed to HM Treasury Recommendation (the committee's words)
    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)
  9. 9
    Maintain approach preventing political interference in the National Wealth Fund's operations. Recommendation · addressed to HM Treasury Recommendation (the committee's words)
    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)
  10. 10
    Assess merits of National Wealth Fund borrowing directly from market to enhance independence. Recommendation · addressed to HM Treasury Recommendation (the committee's words)
    The Treasury and NWF must assess the potential merits of allowing the NWF to borrow funds directly from the market to empower the NWF to enhance its independence from the Treasury when funding projects. (Recommendation, Paragraph 49) 21