A welcome Committee report on the National Investment Bank Bill

Last month I blogged on the need for Scotland’s third sector to step up its role in Scotland’s publicly owned investment bank. Now, with the Economy, Energy and Fair Work Committee’s Stage One Report published, I consider how work to set up Scotland’s National Investment Bank (SNIB) is progressing.

Since January, SCVO and Social Enterprise Scotland (SES) have worked together to define our shared priorities:

Vision – securing legislative measures that enshrine an environmental and socio-economic focus in law

People – driving a commitment to inclusivity and equality within the Bank’s governance

Society – raising awareness of and changes to the narrow private sector narrative around the Bank

There’s general agreement that Scotland needs a National Investment Bank, and I believe that all political parties and sectors support the idea of investing in organisations that have purpose, impact and who are pursuing societal and environmental change.

Many of those organisations form part of Scotland’s third sector. It’s why we’re involved, and the recent Cross-Party Group on Social Enterprise was an excellent opportunity to raise awareness of the Bank, discuss possible products that the Bank could offer, and strengthen the value of the sector to the Scottish economy in the minds of those working closest to the Bank.

Since then, we’ve also participated in the Scottish Government’s promotional video for the Bank and the position of Chair of the Board – now open for applications.

We’ll be looking to build on the conversations we had with other participants, and it’s vital that the values displayed in this short film – trust, ethical, opportunity, equality – are replicated in the Bank itself. 

Now, to the Bill itself…

Vision

SCVO’s and SES’s vision for the bank is an investment-led transition to a zero-carbon economy that accelerates social and environmental impact ahead of economic growth at any cost.

It’s not too dissimilar from that which featured originally in the Bank’s Implementation Plan, which was accepted in full by the Scottish Government. But the vision, and reference to social and environmental impact, are missing from the Bill and the Bank’s objectives, with ‘inclusive economy’ provided as a catch-all term.

Like us, the Committee remains to be persuaded that the language of the Bill fully matches the ambitions for the Bank to be transformative and have asked to see the rationale behind the differences in the wording in the Bill and the original Implementation Plan.   

The Committee’s recommendation that ‘non-financial returns must be anchored in the Bill and [their invitation to] the Scottish Government to consider how best that can be achieved’ is welcome, as too is its proposal to not set a notional rate of financial return in the short term.

People

Scotland must remain true to its commitment to be open about its fiscal position and performance. That must include increasing participation and financial and performance transparency in the Bank. The Implementation Plan envisages the Bank adopting a leadership role in the financial sector with regards to diversity and inclusion, and it references citizen participation in an Advisory Group – which isn’t mentioned in the Bill – and the preparation of an Ethical Statement.

The Committee’s recommendation that the Scottish Government consider how the Advisory Group could be reflected in the Bill is welcome, and we’re pleased the Committee has gone on record with its concern at the potential for confusion over the nature of the Advisory Group’s role, it’s make-up and agency in shaping the Bank’s missions.

We look forward to seeing the various models for the Advisory Group, which the Committee has requested the Scottish Government share before the Stage One debate this September. The Committee has also called for more information relating to ethics and equalities including a fully revised Equalities Impact Assessment. 

Society

It shouldn’t matter whether you’re in a small of medium sized business, a social enterprise or a charitable organisation. Whether you’re in Glasgow or Orkney. Any National Investment Bank with an investment of £2billion worth of public money over ten years has a duty to be inclusive and provide opportunities for all of Scotland to flourish.

A priority for us is making sure that this National Investment Bank maximises the impact, contributions and values of Scotland’s third sector in developing a distinct, national financial institution, one that allows third sector organisations to secure finance – where appropriate – as a willing partner.

We were pleased to see clarification from the Scottish Government that confirms the use of the phrase ‘lending solely to the private sector’ does not rule out third sector bodies, community interest companies, social enterprises and cooperatives from seeking finance. It’s important that this is clarified further in future drafting.

We will continue to update the sector on progress with Scotland’s National Investment Bank, and SCVO and SES are keen to work with others across civil society to shape our approach. Please get in touch if you would like to discuss any of this further.