Source · Select Committees · Treasury Committee
12th Report - National Wealth Fund
Treasury Committee
HC 806
Published 28 October 2025
Recommendations
7
Accepted in Part
Outline collaboration among public financial institutions and re-examine merging British Business Bank and NWF.
Recommendation
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 …
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Government Response Summary
The government strongly agrees public financial institutions must collaborate, citing the Public Investment Roundtable and a 'no wrong door' approach; it also commits to raising the Office for Investment's profile through marketing campaigns, but does not address re-examining a merger of the British Business Bank and National Wealth Fund.
HM Treasury
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8
Accepted
Invest National Wealth Fund strategically, aligning funding with key government strategies.
Recommendation
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 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.
HM Treasury
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9
Accepted
Maintain approach preventing political interference in the National Wealth Fund's operations.
Recommendation
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 …
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Government Response 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.
HM Treasury
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10
Rejected
Assess merits of National Wealth Fund borrowing directly from market to enhance independence.
Recommendation
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
Government Response Summary
The government rejects the recommendation to assess allowing the NWF to borrow from private markets, stating the NWF has sufficient existing capital and no current plans to enable direct borrowing; future capitalisation will be assessed after existing funds are exhausted.
HM Treasury
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Conclusions (6)
1
Conclusion
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 …
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.
2
Conclusion
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 …
Government Response 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.
3
Conclusion
Deferred
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 …
Government Response Summary
The government's response focuses on coordination among public financial institutions and attracting investment to the UK generally, through mechanisms like the Public Investment Roundtable, rather than outlining how the NWF's new strategy will address specific metrics, risk appetite, financial instruments, evaluation, or crowding out concerns.
4
Conclusion
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 …
Government Response 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.
5
Conclusion
Deferred
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)
Government Response Summary
The government strongly agrees the NWF must remain operationally independent and details its governance structure and relationship with HM Treasury, but does not commit to specific actions for measuring and acknowledging societal benefits to mitigate future privatisation risk.
6
Conclusion
Deferred
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)
Government Response Summary
The government's response discusses the NWF's increased capitalisation and its current funding plans, including no immediate plans for direct private market borrowing, rather than addressing how it will liaise with other public financial institutions.