Recommendation 20

HM Government · verbatim extract Accepted

9.1. The Government agrees that public finance has an ability to crowd-in private investment into key sectors and places, which is crucial for firms starting and scaling; and for increasing productivity growth across the UK economy. We must leverage the state’s ability to pool risk, provide long-term stability and create positive conditions for investment to facilitate the growth of the IS-8 sectors and boost the availability of capital for UK firms. 9.2. The Government and PuFIns are committed to strengthening coordination across the landscape via the new UK Strategic Public Investment Forum, ensuring PuFIns’ roles are complementary and distinct to make the landscape clearer for business and investors looking for support. The Forum will bring together the National Wealth Fund, British Business Bank, UK Export Finance, Innovate UK, Great British Energy, Homes England, and the Crown Estate, with a focus on coordination and collaboration to deliver investment to drive progress on the Industrial Strategy, as well as broader Growth and Clean Energy missions. 10.1. The Industrial Strategy sets out how Government will deliver through the UK’s Public Financial Institutions (PuFIns) to ensure globally competitive support to businesses, titling their focus to the IS-8 and frontier industries to help firms in these areas access finance. This includes: Increasing the British Business Bank’s (BBB) capacity and capability so that it can invest across the lifecycle of firms with high potential. At the Spending Review, the government announced the Bank’s total financial capacity would rise to £25.6 billion, enabling a two-thirds increase in support. The BBB will commit an additional £4 billion of capital to support investment into the IS8, focused on developing the UK’s venture ecosystem to encourage scale-up funds to raise more capital and lead larger investment rounds in UK firms. Expanding the mandate of the National Wealth Fund to ensure that its £27.8 billion is deployed more strategically to drive growth. Strengthening our export credit offer through increasing the maximum size of UK Export Finance’s (UKEF) financial portfolio by bringing forward legislation when parliamentary time allows, making an additional £3 billion of direct lending capacity available, and reviewing UKEF’s mandate to consider whether it should take on a broader trade and investment finance remit with additional flexibility to de-risk investment into IS8 firms. 11.1. The reformed Office for Investment will provide seamless support to the government’s most important international and domestic investors to secure a greater proportion of international mobile investment into the UK. As part of this, the government has launched a new Strategic Investment Opportunities unit within OfI, to work closely with the Place Unit. The two units will partner with key places (for example, Mayoral Strategic Authorities), government departments, and wider public organisations – including NWF’s advisory functions, to identify, shape and deliver on strategic investment opportunities with significant scope for private capital and investor interest. There will be a particular focus on areas prioritised in the Infrastructure Strategy and Industrial Strategy. 12.1. The government is investing billions to support the Industrial Strategy’s 8 growth driving sectors, including with £4bn of additional capital through the British Business Bank, and up to £4.3bn for Advanced Manufacturing. Through these investments, the government is also unlocking billions in private investment. The strategy sits alongside the Government’s Spending Review, ensuring its priorities are hardwired into departments’ budgets for the rest of this Parliament, alongside 10-year R&D commitments and infrastructure plans that support the wider Growth Mission, such as: £15.6bn in total by 2031–32 for the elected Mayors of some of our largest city-regions via the Transport for City Regions (TCR) settlements, supporting them to invest in their local transport priorities. This means city-region transport spending will more than double in real terms by 2029–30 compared to 2024–25. £39 billion for a new 10-year Affordable Homes Programme. This SR provides the biggest boost to investment in social and affordable housing in a generation; £14.2 billion for Sizewell C over the SR period, the first state-backed nuclear power station since 1988, with further backing for nuclear with over £2.5 billion to enable one of Europe’s first Small Modular Reactor programmes, with Rolls-Royce SMR selected as preferred bidder; and, £22.6 billion per year for Research and Development by 2029–30, to support innovation and the government’s modern Industrial Strategy. 12.2. Overall, the government increased the capital envelope by over £100 billion at Autumn Budget 2024 and by a further £13 billion at Spring Statement 2025. Taken together, the government is investing an additional £120 billion over the SR period, compared to the p