"Where it identifies need, it will invest and lend on commercial terms, but with a different risk appetite to other financiers where required and appropriate, taking a longer term view on returns" 
1.1 The Scottish Government's 2017-18 Programme for Government included a commitment to establish a Scottish National Investment Bank, with the aim of boosting Scotland's economic performance and realising the Scottish Government's ambitions for the economy by providing patient capital to finance growth.
1.2 The Scottish Government commissioned Mr. Benny Higgins, former Chief Executive of Tesco Bank, to provide recommendations on the role, remit, governance and capitalisation of the Bank. Alongside the work commissioned from Mr Higgins, a Consultation Paper was issued on 20 October. The consultation invited comments and suggestions from stakeholders on a series of key issues on the creation of a Bank.
1.3 An Implementation Plan was launched on 28 February by the First Minister and Mr Higgins. The Plan was developed by Mr Higgins and an Advisory Group. The Plan also included: an overview of the economic case for having a Scottish National Investment Bank; the sort of products and markets that the Bank should target; the type of strategic missions which Ministers could set for the Bank; an overview of how the Bank should be structured and capitalised; what sort of corporate body it should be; and an outline transition plan. The 21 recommendations within the Implementation Plan along with analysis and commentary about them are included in Annex A for information.
1.4 The following suite of documents were published alongside the Implementation Plan summarising the consultation responses and containing supporting technical information. Analysis of consultation responses, a supporting economic report and a review of national promotional banks globally (developed by Professor Mariana Mazzucato, Director of the Institute for Innovation and Public Purpose at University College London, who is also a member of our Council of Economic Advisers).
1.5 In a Parliamentary Statement on 8 May, Keith Brown, MSP, then Cabinet Secretary for Economy, Jobs and Fair Work, announced that the Cabinet had accepted all 21 Recommendations in Mr Higgins' report. The Parliamentary Statement also re-iterated the Government's commitment to additional funding to support the Bank.
1.6 The draft Budget for 2018-19, published in December 2017, signalled the Government's commitment to funding the new Bank. It outlined how "to give the bank the financial platform and clout it needs to make a transformational impact from the outset, we will provide initial capitalisation of £340 million over the first two years of its operation". It also outlined the establishment of a "Building Scotland Fund ( BSF), as a pre-cursor for the Bank, and part of its initial capitalisation, will provide support to secure new public and private sector house building; provision of modern industrial and commercial facilities; and business-led research and development". Operation of the BSF has commenced.
1.7 The Scottish Government has now appointed Mr. Higgins as Strategic Adviser to the First Minister on the Scottish National Investment Bank. Mr Higgins will provide advice from an authoritative and independent perspective on the establishment of the Bank to Scottish Ministers, in particular to the First Minister and Cabinet Secretary for Finance, Economy and Fair Work. Mr Higgins' work to develop the Implementation Plan makes him uniquely placed to provide strategic advice on the Programme immediately.
1.8 A key part of the implementation of the Bank will be parliamentary legislation. This Consultation is the first step in this process; an electronic version of this paper as well as how to respond is available at https://consult.gov.scot/.
1.9 This consultation focusses on the Bank's objectives, purpose and governance, as well as its relationship with Ministers and stakeholders. The proposals set out here will inform further conversations with key stakeholders. Responses to the consultation will help to shape the Bank's Articles of Association and what is set out in the draft Bill and accompanying documents, planned for introduction early in 2019.
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