Scottish National Investment Bank: review of performance 2026

Evolving the approach to the missions

45. Against this backdrop, the Bank’s leadership team is currently considering how it proposes to evolve its overall approach to the missions, and the emphasis between and within them, over the period ahead.

46. A first step towards setting this is the publication on 8 July of its investment strategy for 2026-27. In relation to the net zero mission, the refreshed strategy places more emphasis on energy security and resilience, adopting a pragmatic, system-led approach to unlocking bottlenecks, supporting transition technologies and energy storage solutions, and investing in supply chains which will support both energy security and a just transition.

47. On innovation, the Bank will adopt a more sector-agnostic approach focused on proven high-growth businesses with scaling prospects, leaning more to later-stage investment than to start-up funding.

48. These seem to me to be rational strategic responses to changing economic and geo-political circumstances and to the first five years of experience. It will be important for the Bank, in consultation with the Scottish Government, to communicate its analysis and reasoning for this shift in emphasis; and also for the Scottish Government to consider any wider implications for its policy agenda.

49. On place, I fully understand the social policy rationale for greater investment in housing, as well as the investment opportunity for the Bank, and its relevance right across the country. I also appreciate the place that housing investment – being relatively lower-risk, with shorter return cycles – has to play in ensuring balance within the Bank’s overall portfolio, not to mention its potential significance for the Bank’s ambitions to attract third party capital.

50. However, I did not come across any evidence of the medium- to long-term impact of housing investment at the level of regional and local economies, except where it unlocks a major strategic industrial development. So while it makes sense for the Bank to invest in housing, that in itself does not speak fully to the transformational ambition expressed in the mission set out by the Scottish Government.

51. The Bank cannot be expected to carry sole responsibility for this. It has to operate within the context of an overall policy framework established by government. From the First Minister’s comments since the election, I understand that he thinks there is further work to be done to articulate the Scottish Government’s vision for regional and local economic policy. Fulfilment of that intention would greatly assist the Bank in developing its approach to the place mission.

52. Overall, on the basis of my discussions, I do not think that it is necessary for the Scottish Government to amend or rewrite the Bank’s missions. Indeed, that could be a counter-productive distraction as the Bank seeks to build on the successes of its first five years.

53. However, now is a good time for incoming Ministers and the Bank’s leadership to take stock together of the way the Bank proposes to pursue the missions in the period ahead, against the emerging economic policy priorities of the new administration and the broader economic and geopolitical context. These discussions in turn should inform the Bank’s approach to wider public reporting of its priorities, its activities, and their impacts.