Scottish National Investment Bank: Ministerial Advisory Group minutes: December 2024

Attendees and apologies

Present

• Richard Rollison (co-chair)
• John Glen (co-chair)
• Roz Foyer
• Irene Graham
• Maggie Craig
• Nathan Elstub

In attendance

• Kate Forbes, Deputy First Minister and Cabinet Secretary for the Economy and Gaelic
• Al Denholm, Chief Executive Officer, The Bank
• Willie Watt, Chair of the Board, The Bank
• David Ritchie, Chief Strategy Officer, The Bank

Apologies

• Emma Congreve

Supporting officials

• Andy Hogg
• Pat Crolla
• Connie Penman
• Rudi Mills

Items and actions

Welcome and opening remarks

Richard welcomed members to the first meeting of the Ministerial Advisory Group for the Scottish National Investment Bank and invited attendees to introduce themselves.

Group business

There were no new declarations of interest. The members noted the privacy notice regarding the register of interests. 

Terms of reference and workplan discussion

The attendees discussed the following in the context of the draft terms of reference and proposed workplan

• duration of the group and individual membership terms: There was consensus on the importance of continuity in governance, with suggestions for staggered membership changes to ensure stability during transitions
• the Bank’s interactions with UK Government institutions: The group discussed the Bank’s role within the wider investment landscape, including its interlinkages with partners such as Scottish Enterprise, the British Business Bank, and the National Wealth Fund
• timescales and legislation associated with the five year review of the Bank: The group discussed the legislated five-year review, including its timing, scope and the other reports that could feed in to it
• the Bank’s strategic priorities: Current priorities outlined in strategic guidance to the Bank includes ScotWind, net zero objectives, and scaling-up efforts. The group discussed the alignment of these with the broader strategic goals of sustainable economic development
• the flexibilities available to the Bank: Members discussed the Bank’s ability to adapt to emerging market needs, balancing flexibility with the Bank’s mandate, and its ability to address unforeseen opportunities or gaps in the market
• annual strategic guidance letter provided to the Bank: Ministers provide the Bank with an annual strategic guidance letter, detailing priority areas. The group reflected on the focus of these letters evolving to meet emerging challenges

Welcome and opening remarks from Kate Forbes, Deputy First Minister

Richard welcomed the Deputy First Minister to the meeting and invited group members to introduce themselves. DFM thanked the group members for agreeing to participate and reiterated that the purpose of this group is to provide advice to Scottish Ministers as the sole shareholder of the Bank. 

DFM highlighted the importance of

•  measuring the Bank’s performance against the instructions it has been given: The Bank’s performance should be assessed based on how well it aligns with the objectives and instructions it has been set. Honest and clear feedback was encouraged to support this evaluation
•  the context the Bank is operating in: The Bank is a key player in improving Scotland’s investment landscape. To address the recommendations from the Investor Panel, Scottish Government priorities include enhancing strategic clarity, strengthening engagement with investors, and ensuring timely and effective delivery. Initiatives like the Green Industrial Strategy reflect this focused approach to setting and achieving priorities
• delivering for the ‘public purse’: Striking a balance between financial returns and broader social impacts was highlighted as important. The Bank’s delivery in this area was acknowledged
• the relationship between the Bank and the Enterprise agencies, other public sector organisations and the private sector: Collaboration was emphasised as being vital to the Bank’s success. The Bank is working closely with organisations such as Scottish Enterprise, and the National Wealth Fund to ensure efforts are aligned and to minimise duplication. This cooperative approach is key to fostering strong public-private partnerships and ensuring a joined-up strategy for investment 
• the Bank’s operational independence: The Bank operates independently from the Scottish Government. Therefore, it is important to monitor its objectives and impact. The focus remains on ensuring that the Bank balances autonomy with accountability to deliver effectively for Scotland

DFM opened the meeting for discussion. Meeting attendees discussed the following:

• investment landscape and scale-Ups: Attendees explored the relationship between private and public sector investment. It was noted that organisations like SNIB and Scottish Enterprise are playing significant roles in supporting the scale-up landscape in Scotland. There was discussion on the importance of fostering strong connections with investors, including those based in London and overseas, to improve early engagement and collaboration
•  financial deliverability: The discussion highlighted the need to enhance the investment opportunities in Scotland. Suggestions included leveraging financial mechanisms such as co-investment, provisional guarantees, and political support to attract large-scale investors and enable transformative projects
•  collaboration with UK government initiatives: Participants emphasised the importance of strategic collaboration between Scottish and UK Government institutions, particularly in relation to initiatives like GB Energy. This was seen to maximise the impact of limited public funds and to secure significant investment in Scotland to support the energy transition
•  regulatory considerations: It was suggested that developments within the FCA should be closely monitored given the potential impact of any changes on consumer resilience and investment
•  scope of the Bank: The discussion recognised the regulatory and operational boundaries the Bank operates within, with an emphasis on aligning the Bank's objectives with its capacity and available resources

DFM thanked the members for their time.

Overview of the Bank

Richard welcomed Al Denholm, Willie Watt and David Ritchie to the meeting and invited the group members to introduce themselves. 

Willie Watt provided:

• an overview of Bank’s three missions and its initiatives to meet these goals
• the Bank’s operational independence and the governance relationship with the shareholder
• the Bank’s approach to impact investing and adherence to international standards
• details of the Bank’s investment portfolio to date, including notable projects and alignment with its missions
• strategic priorities for the future, including offshore wind, housing, rural regeneration, community-based projects, and securing FCA accreditation to manage third-party capital

David Ritchie expanded on the Bank’s monitoring of investees and Al Denholm provided further details of their market creation capabilities. Richard opened the meeting for discussion. Attendees discussed:

• the remit of Crown Estate Scotland
• financial exclusion and potential partnerships or investees in this area
• fair Work outcomes and the Bank’s Employee Voice program
• the Bank’s budget, financial model and operational flexibility
• british Business Bank, GB Energy and the National Wealth Fund
• the Bank’s progress towards securing FCA accreditation
• evaluating output vs outcome
• ardersier Port investment
• development Bank’s increased risk appetite

Richard thanked everyone for their time and closed the meeting.

Meeting actions

Action 1.1: Re-draft the terms of reference and the workplan to reflect the group’s discussions
Action for: Secretariat
Action by: 24 January 2025

Action 1.2: Secretariat to set up 1-2-1 discussions between Richard/Andy and group members to discuss re-drafted terms of reference and workplan
Action for: Secretariat
Action by: 14 February 2025

Action 1.3: Secretariat to schedule quarterly meetings for 2025/26. 
Action for: Secretariat
Action by: 31 January 2025