Meeting of the Parliament 21 January 2020
I am not sure whether Neil Findlay has seen the correspondence between the committee and the cabinet secretary, but I would encourage him to look at it, because I think that it addresses those issues.
We are now—before a single penny is invested in the economy—spending £140 million a year on operating costs across all the enterprise agencies, so we need to ensure that we get a real return from the bank. That should be similar to the returns achieved by the British Business Bank, which has a target rate of return of more than 2.5 per cent. We look forward to the cabinet secretary confirming that he will be setting out the medium and long-term performance targets of the bank once it is up and running.
Another fundamental question that the committee raised is whether there will be sufficient demand in the economy for the additional funding to be offered by the bank. We saw demand being a problem in the context of the Scottish growth scheme, which has invested only a quarter of the up to £500 million that was on offer.
In evidence given to the committee, we were told that the bank will not act as the originator of funding opportunities. That means that the bank will have to rely on the existing enterprise agencies, which are operating under existing budgetary and resource constraints. I ask the cabinet secretary, when he sums up, to confirm whether the enterprise agencies’ budgets will be increased in order to deal with the extra demands on them and the extra opportunities that they will be required to seek out on behalf of the Scottish national investment bank.
I turn briefly to the bank’s strategic missions. The cabinet secretary has been transparent about the grand challenges and the strategic missions that he proposes to set the bank, and, as we heard earlier, the bank’s
“primary mission will be securing the transition to”
a
“net zero”
economy, and
“A key element of the Bank’s work will be to help to shape and develop commercially investable low carbon markets.”
I think that everyone agrees with those objectives, but again, we need to see the detail of how all that will be delivered once the bank is up and running. Over the past 12 years, the Scottish economy has failed to see the economic benefit and the real jobs that were promised as a result of the development of low carbon markets; we heard about that during the renewable energy summit held last week. The Scottish Trades Union Congress also made that clear in a report issued last year.
I will wrap up by saying that the relatively easy part of establishing the bank—passing the legislation—will be achieved this afternoon; however, the real challenges lie ahead. Those are: to ensure that the bank recruits the very best professionals to deliver transformational change; for the Scottish Government to reform the enterprise landscape so that all agencies are fully aligned; and for the bank to stimulate demand and make the necessary investments so that there can be transformational change in Scotland’s economy.
16:46