Source · Select Committees · Public Accounts Committee
Recommendation 17
17
Accepted
The Bank’s 10 deals to date have mostly been in relatively conventional investments.45 This total...
Conclusion
The Bank’s 10 deals to date have mostly been in relatively conventional investments.45 This total consists of seven loans and three equity investments made through funds rather than directly. The Treasury told us that the Bank was deliberately designed to start with “those less controversial things, less equity driven” as it builds up resources over time.46 The Bank acknowledged that it is comfortable with senior debt transactions, but does not have the skillset and resource within the Bank to undertake direct equity investment.47 It told us that it took the decision to deploy equity through qualified third-party managers, rather than not deploy any equity until it had the resource to do so. The Bank told us that this is a “technique that has been deployed successfully in Government before”, for example through the Digital Infrastructure Investment Fund and Charge Infrastructure Investment Fund – both of which are now the responsibility of the Bank. The Bank expects such “outsourcing” to moderate over time as it develops the skills necessary to make direct investments, to the point where it will not outsource equity investment further.48
Government Response Summary
The Bank has published its first strategic plan in June 2022, which sets out the Bank’s investment strategy. The Bank has already made 12 deals worth £1.16 billion across a range of priority sectors and have further deals in the pipeline. The Bank’s role is to crowd-in private investment.
Government Response
Accepted
HM Government
Accepted
3.2 The Bank has worked closely with the Treasury to ensure there is a clear strategic outlook in its first 18 months and beyond, and to this end the Bank has already published its first strategic plan in June 2022. The plan clearly sets out the Bank’s investment strategy, including its priority areas for investment and the range of investments that it expects to make. It is right that as parts of its operations the Bank assesses market needs and reviews deals against its objectives – and is already doing so successfully. The Bank has already made 12 deals worth £1.16 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.