Source · Select Committees · Public Accounts Committee
Thirty-Fourth Report - The Creation of the UK Infrastructure Bank
Public Accounts Committee
HC 45
Published 25 January 2023
Recommendations
2
Accepted
The Treasury and the Bank have not yet put in place the conditions necessary for...
Recommendation
The Treasury and the Bank have not yet put in place the conditions necessary for the Bank to be a successful and long-lasting institution. The government wants the Bank to be a “long-lasting institution”, providing financing for infrastructure projects well …
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Government Response Summary
The government agrees and states that the Bank will provide the requested information to Parliament by the end of September 2023 and in March 2024, then information will be provided through the Annual Reports and Accounts process, and that the Framework Document and Strategic Steer will be updated to reflect the new statutory footing for the Bank.
HM Treasury
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3
Accepted
We are not convinced the Bank has a strategic view of where it best needs...
Recommendation
We are not convinced the Bank has a strategic view of where it best needs to target its investments. The Bank’s 10 deals to date have mostly been relatively conventional investments, including seven loans. While the Bank’s early deals reflected …
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Government Response Summary
The government agrees and states that the Bank published its first strategic plan in June 2022, setting out the investment strategy and priority areas, and plans to publish a further update in summer 2023, which will be sent to the Committee.
HM Treasury
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4
Accepted
The Bank’s advisory function remains in the early stages of development and uncertainty remains on...
Recommendation
The Bank’s advisory function remains in the early stages of development and uncertainty remains on how it will be funded and how smaller local authorities will benefit from its activities. The Treasury intends the Bank to provide advisory services to …
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Government Response Summary
The government will provide the requested information later in Spring 2023 after completion of the pilot projects in Bristol, Greater Manchester, and West Yorkshire Combined Authority. Recognising that the needs of different size local authorities will vary, the Bank has carefully considered how it can deliver effectively across this spectrum.
HM Treasury
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5
Accepted
Maximising the Bank’s impact will depend on close cooperation with government departments, but it has...
Recommendation
Maximising the Bank’s impact will depend on close cooperation with government departments, but it has not yet worked out how this will operate in practice. The Treasury intends the Bank to play an important role in achieving key elements of …
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Government Response Summary
The government agrees and states a lead point of contact within the Bank has been assigned for key departments to understand government priorities and originate investment opportunities, supported by engagement with senior officials and examples of partnerships, and are now engaging with new departments after the restructuring.
HM Treasury
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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 …
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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.
HM Treasury
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Conclusions (3)
7
Conclusion
Accepted
The Treasury told us it took a “phased approach” to the Bank’s set-up with “checks and balances in place” to ensure it would be delivering value for money to the taxpayer.17 The Treasury seconded officials to key Bank posts, and initially had “very tight controls” over the Bank, including retaining …
Government Response Summary
The Treasury ensured clear governance procedures were in place before opening the UKIB for business, including an agreed Framework Document and appointment of interim Board, with permanent Chair in post, and maintained close oversight as UKIB started to grow its operations.
16
Conclusion
Accepted
The Bank was set up to address market failures and fill gaps in financing for infrastructure investment.41 The Bank told us that it can do this by taking risk that the market is just not willing to take, for example in “first-of-a-kind” technology. It also told us that it can …
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.
17
Conclusion
Accepted
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 …
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.