Scottish National Investment Bank: review of performance 2026

The future – a perpetual fund

91. Since the Scottish Government first established the Bank, it made clear that its intention was to create a permanent institution. This was a central part of the original blueprint set out by Benny Higgins in 2018, and it received cross-party support in the Scottish Parliament during the passage of the 2020 Act.

92. It was entirely understandable that the Scottish Government’s initial financial commitment to capitalise the Bank to the tune of £1 billion covered one Parliamentary term, with a statement of intent of a further £1 billion by 2030. It was also understandable that the Bank was initially established within the budgetary framework for public bodies.

93. However, having to deploy capital effectively within the constraints of the public finance framework, which mean operating with annual financial contributions which must be deployed within the same year, with very limited ability to carry unused funds from one year to the next, has created significant inflexibility in the Bank’s operations, running the risk of distorting decision-making.

94. And having to operate in the marketplace without certainty as to the existence of the organisation beyond 2030 is presenting increasing challenges in terms of forming and managing long-term relationships of trust and confidence with investees and co-investors alike.

95. There is now urgency to resolve these interlinked issues. I heard compelling evidence that there will be negative consequences if the Bank’s ability to be a reliable source of long-term and repeat funding is not clearly established and understood externally within the next year or so.

96. It will require action by both the Scottish and UK Governments to give the Bank the ability to manage, retain, carry forward and redeploy cash balances across years; and also to raise capital in its own right, so that it is no longer reliant on continuing capital advances from the Scottish Government beyond 2030.

97. I understand that in recent months there have been productive discussions on these questions between the Bank, the Scottish Government and HM Treasury; and I note the shared statement of intent from outgoing Scottish Ministers and the Bank to the Parliament in March 2026. It would be very helpful if incoming Ministers could now set out a clear plan of action and timetable with a view to securing the necessary agreement by early 2027.