Recommendation 1

HM Government Acknowledged

The government agrees with the Committee’s recommendation. April 2023. The decision to establish the UK Infrastructure Bank (the Bank) at pace was prioritised to ensure that the institution could begin to deliver on its objectives as soon as possible, supporting investment in infrastructure throughout the UK and helping the government reach its net zero targets. The benefits of this approach are supported by the Bank’s work to agree 12 deals in total, investing approximately £1.16 billion and unlocking more than £5.1 billion in private capital. The policy design of the Bank was set out by the Treasury prior to its launch alongside the March 2021 Budget. As highlighted by the NAO’s report, this design drew on experience with similar institutions such as the British Business Bank and the Green Investment Bank. The government introduced the UK Infrastructure Bank Bill in May 2022 to support UKIB’s future a long-lasting institution driving infrastructure investments towards projects that help tackle climate change and support regional and local economic growth across the UK. Prior to opening the UKIB for business, the Treasury ensured clear governance procedures were in place including an agreed Framework Document and appointment of interim Board, with permanent Chair in post. After UKIB launched in interim form, the Treasury maintained close oversight as UKIB started to grow its operations. This included retaining delegated authorities on UKIB’s behalf until a permanent Chief Executive was in post and able to be appointed as Accounting Officer. This ensured appropriate protections were in place that were tailored to UKIB’s activities. HM Treasury also agreed a Financial Framework with UKIB ahead of delegating authority to the UKIB CEO for investment decisions. This came into effect in January 2022 and gave the Board and Executive Team discretion over the day-to-day operations of the Bank, including delegated authority to make investment decisions independently of government. As is the case for any government ALB and sponsor department, the Bank must report on its performance to its shareholder including submitting an annual business plan to the Treasury for approval, including details of their operations, financial performance, and key performance indicators. The Bank’s business plan, and the planned Strategic Review will allow the Treasury to assess how these arrangements are working in practice. The role of UK Government Investments (UKGI) is to act as the Treasury’s Shareholder Representative on the UKIB Board. UKGI have extensive experience in corporate governance and manage a portfolio of 23 government businesses UKGI are managed independently but are wholly owned by HM Treasury. The Treasury are responsible for oversight of UKGI and reporting on their performance to Parliament. billion across a range of priority sectors and have further deals in the pipeline. The Bank’s role is to crowd-in private investment, and therefore the Bank’s proactive investment strategy needs to carefully consider this. 3.3 The Bank plans to publish a further update to its Strategic Plan (which includes its investment strategy) in the summer of 2023 and will send this to the Committee when it does so.