2. Introduction and background
The Scottish Government’s 2017/18 Programme for Government contained a commitment to establish a Scottish National Investment Bank to help companies grow and support the Scottish Government’s economic vision.
The Bank is expected to build upon the success and align and complement the work of Scotland’s enterprise agencies and other Scottish Government bodies, addressing challenges within the Scottish economy, including access to finance particularly the lack of strategic, patient capital.
The creation of such a bank follows international practice, with a range of other developed countries using national investment banks to provide cornerstone equity and debt financing, as well as engage in market-shaping activity, designed to support economic growth.
The Scottish Government appointed Benny Higgins to develop an Implementation Plan for the Bank and fulfil the Terms of Reference set for this work. A public consultation ran from 20 October 2017 to 20 November 2017. Responses were used to inform the implementation plan. The plan was published in late February 2018.
In the Scottish Government’s 2018/19 Programme for Government, the First Minister announced plans to introduce legislation to formally underpin the Bank. Having received parliamentary support, the Scottish Government is now taking forward the Implementation Plan to create the Bank and for the Bank to be operational in 2020.
The consultation and engagement with stakeholders will inform the draft Bill that will be brought forward in early 2019.
To inform this process a public consultation was launched to invite comments and suggestions from stakeholders and civic Scotland on a series of key issues on the creation of the Bank. The consultation was launched on 5 September 2018 and focused on the Bank’s objectives, purpose and governance. The questions in the consultation fell under five key headings.
- The opportunity and the Bank’s objectives and purpose
- The focus for investment activities
- Operating model, classification and capitalisation
- Governance and relationship with Ministers
- The Bank’s staffing and employment arrangements
The consultation received 1,443 responses before it closed on 31 October 2018. This comprised 40 responses from organisations, 1,360 responses as part of a campaign from Friends of the Earth Scotland and a further 43 responses from individuals.
- Question 1: Are the proposed objectives and purposes for the Bank the most appropriate to deliver the Implementation Plan’s recommendations, and to fulfil the Bank’s potential contribution to increasing sustainable economic growth?
- Question 2: Do you have views on the statement of the Vision which has been set for the Bank, in paragraph 3.2?
- Question 3: Do you agree that the overall direction for the Bank should be set by Ministers through a Strategic Framework, including the setting of missions and performance objectives and a target rate of financial return?
- Question 4: Do you have any views and suggestions on the examples of missions, outlined in paragraph 4.7 and what are these?
- Question 5: Do you agree that the Bank should identify and implement an Investment Strategy, which is along the lines suggested?
- Question 6: Are there any arrangements or requirements not already considered that would inform the Equalities Impact Assessment and strengthen and enhance the Bank’s ethical approach to investment, and what are these?
- Question 7: Do you agree with the principles approach that is proposed for the Bank, including publication of an Ethics Statement by the Board?
- Question 8: Is there a better option than the Public Limited Company model, and if so what is it and why?
- Question 9: Do you have views at this stage on the proposals for capitalisation of the Bank?
- Question 10: Do you have views on how the governance and classification of the Bank should evolve over time, and if so, what measures and protections should be included now to guide and inform a future change in governance and classification of the Bank?
- Question 11: Do you agree with the proposed approach to the Bank’s governance and Board arrangements which will inform the Bill, the Articles of Association and a Strategic Framework document?
- Question 12: Do you have any comments on the need for the Bank to have Delegated Powers, in order to achieve the aim of it being operational and administratively independent?
- Question 13: Do you have views on whether and how an Advisory Group could provide advice to Ministers on the progress being made by the Bank?
- Question 14: Do you have views on the initial operating model and costs identified in the Implementation Plan and what are these?
- Question 15: Do you have views on any criteria for the approach to remuneration for senior and specialist roles in the Bank?
- Question 16: Do you have views on areas where the current approach to public sector pay would suit the needs of the Bank, and are there other examples of variations in public pay policy that would be suitable for the Bank and any areas where some changes may be needed?
The Scottish Government engaged Deloitte LLP to assist in the analysis of responses to the consultation and this document sets out an analysis of these consultation responses and aims to document the full range of views expressed around each key theme identified.
Stakeholder workshops and bilateral meetings
The consultation process was augmented by officials hosting 9 stakeholder workshops including the Business in the Parliament Conference and 12 bilateral meetings with key stakeholders. Officials also attended the Scottish Cities Alliance CEO meeting and an SCDI Orbit Breakfast Briefing to promote the consultation and gather views and opinions on the Bank. These events took place between 26 September 2018 and 1 November 2018.
Section 6 summarises the views and insights gathered through these engagements. Although the discussions were not framed within the prescriptive question format of the consultation, the themes and views identified have been presented within the same format as the analysis seen in section 5.
It is important to note that public consultations are not necessarily representative of the views of the wider population. This is because it is open for anyone to submit their views, and individuals or organisations who have a keen interest in a topic are more likely to participate in a consultation than those who do not. Therefore, it is not necessarily appropriate to conclude that the views of the consultation respondents represent the views of the wider population.
The consultation contained a mix of open and closed questions so the analysis contains a mix of quantitative and qualitative analysis. The purpose of analysis is to understand the full range of views expressed. In analysing the qualitative responses, the following methodology was adopted to give the reader an expectation regarding the scale of responses:
- A small number of respondents indicates fewer than 5 responses.
- Some respondents indicates 5 to 9 responses.
- Several respondents indicates 10 to 14 responses.
- Many respondents indicates 15 to 19 responses.
- A significant number of respondents indicates 20 or more responses.