Source · Select Committees · Public Accounts Committee
Recommendation 6
6
Accepted
The Bank has not fully set out how it will measure and report its performance,...
Recommendation
The Bank has not fully set out how it will measure and report its performance, and how it will evaluate its activities to ensure that it can demonstrate additionality. Evaluation is crucial to ensuring the Bank delivers additionality and that the benefits justify the costs of creating it. The Treasury has set a financial return target, but the Bank has only just started work on developing its own performance measures, and has not fully defined what success looks like, to inform future monitoring and evaluation. There are tensions within the Bank’s objectives; for example, pursuing a project that delivers against its economic growth objective would not necessarily be compatible with its climate change objective. The Bank is yet to set out how it will address these tensions in practice. The Bank has also made little progress in measuring additionality; this is challenging but essential for determining whether the Bank is genuinely adding value, and not ‘crowding-out’ private sector investment. The Bank has developed arrangements for reporting performance and emerging issues to its shareholder, the Treasury, through the shareholder representative, UK Government Investments. However, the Committee has seen other examples in government where similar arrangements failed to escalate problems to Parliament. 8 The Creation of the UK Infrastructure Bank Recommendation: By March 2024 the Bank should write to us detailing how it has implemented a full suite of performance metrics and targets including productivity and green performance, together with a forward plan for evaluation that includes additionality assessments. It should at the same time outline how it will publicly report its performance and the results of its evaluation over time. The Creation of the UK Infrastructure Bank 9 1 Accountability and governance
Government Response Summary
The Bank will work with the Treasury and UKGI to ensure that future metrics are clear and stretching to ensure the Bank continues to deliver against its strategic objectives, and across its remit. The Bank has already published guidance in October 2022 on how it assesses additionality, and it expects to publish a further document setting out its Impact Framework in the summer of 2023.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation that reflected its position as a growing organisation. The Bank has already reported on this initial set of metrics in its Strategic Plan and in its first Annual Report and Accounts. The Bank will work with the Treasury and UKGI to ensure that future metrics are clear and stretching to ensure the Bank continues to deliver against its strategic objectives, and across its remit. These metrics and targets are developed annually and approved by the Board of Directors as well as Treasury ministers. The Bank and the Treasury recognise the importance of transparency around how the Bank’s performance is assessed, which is why key documents such as the Strategic Plan are published. In addition, both the Bank’s and the Treasury’s Annual Reports and Accounts are laid in Parliament and cover the full suite of operations and performance. On additionality, the Bank has already published guidance in October 2022 on how it assesses additionality, and it expects to publish a further document setting out its Impact Framework in the summer of 2023. This will cover both metrics and the Bank’s plan for evaluation.