British Business Bank

In reviewing the Bank’s role and governance, the Department and HM Treasury should more clearly set out an agreed view on their priorities for the Bank, including clarity on its remit:
• The review should consider whether the government’s view in 2014 that the Bank would operate all national SME access to finance schemes across government still holds.
• Following the Bank’s period of rapid growth, and making use of UKGI’s insight as the government’s centre of expertise for corporate governance, the review should cover the governance arrangements, skills, and budgeting and accounting framework of the Bank, considering lessons learned to date and outlining options for change.

The Department and HM Treasury should more clearly set out what they want the Bank to achieve in the context of government’s wider support to business. For example, in setting out:
• how the Bank’s activities form part of a government-wide ‘portfolio’ response in the event of an economic downturn; and
• who is responsible for other factors relevant to SMEs’ access to external finance where they do not currently fall within the Bank’s remit, particularly around financial education and trust among SMEs, and how government will act on and measure those elements.

The Department and HM Treasury should set out more clearly the success criteria for the Bank’s British Patient Capital arm, so that any decision to sell can be informed by robust evidence that its mission has been accomplished.

The Bank must develop impact metrics for its regional imbalance and ‘centre of expertise’ objectives.

The Bank cost analysis should be extended to demonstrate the cost-effectiveness of individual activities and programmes, and allow more granular comparisons of operating expenditure with those of other organisations.

The Bank should publish information allowing Parliament and others to see in aggregate the relative amounts of money going to SMEs, to third parties and on the Bank’s own activities, including its policy work and general administration.

Drawing on its analysis of markets and evaluations, the Bank should report more clearly where it has withdrawn from activities because the market failure is addressed, or the intervention is not delivering the outcomes expected.