Recommendation 20

The NAO report has shown how intervening in companies can lead to unforeseen costs and government involvement over a period much longer than expected. Ensuring value for money requires careful consideration not just of short-term objectives but also of longer-term scenarios, including how and when the government may extricate itself from the intervention.53 In light of taxpayers still retaining a large portion of shares in the Royal Bank of Scotland, we asked the witnesses about how they plan exit strategies at the outset of deciding what kind of intervention is appropriate. UKGI told us that the fundamental principle underlying any intervention is to “provide a bridge, not a pier” and that it will spend time doing due diligence to look at what the future for the company might look like. It explained how Sheffield Forgemasters was nationalised and the ongoing work to help support and modernise the company. The government has committed to the company being “returned to the private sector in due course” but has not specified any timescales for this.54 We also received written evidence which raised concerns about the ongoing ramifications playing out at a gas site in South Wales, following the liquidation of Baglan Operations by the Official Receiver. Dr Tribe’s evidence highlighted a lack of anyone taking responsibility for the liabilities at the site and stressed that government involvement must “be for the long run and properly finalise the case” when it does decide to get involved.55 Skills and capabilities