SNP ministers accused of ‘scandalous’ failure of £2billion state bank
However, more than three years since the Scottish National Investment Bank (SNIB) opened in November 2020, ministers have yet to create the “essential” body.
Last week, SNP Wellbeing Economy Secretary Neil Gray told a Holyrood committee it was “still being worked on” with an update “in due course”.
Despite the lack of a board, the Bank has already committed more than £508million in spending and has allocated another £176m in funding for 2024/25.
The Bank has also been hit by controversies, including first £235,000-a-year CEO Eilidh Mactaggart who quit after 15 months and got £98,000 instead of notice, and the Bank lost £9m after investing in the Scottish Government’s failed deposit returns. scheme.
Ironically, three of the Bank’s own board, including Chairman Willie Watt, sit on advisory groups of other institutions.
After the Herald on Sunday asked the Government for comment, officials mistakenly copied us in their emails, revealing that the advisory group’s work may not begin “actively” until next month.
One wrote: “We will give advice to the ministers of the Advisory Group as soon as next week, recommending that starting in February officials will actively continue to work to establish the group.”
Announced by First Minister Nicola Sturgeon in 2017, SNIB’s are intended to provide “patient capital” for companies that may struggle to find it.
Its three-pronged mission is to help achieve an equitable transition towards Net Zero by investing in the green economy, investing in blighted areas to drive innovation, and supporting innovation. industry.
Ministers have pledged £2bn of funding for the Bank over 10 years.
The original Scottish Government Bill to set it up did not include an advisory board.
However, SNP finance secretary Derek Mackay agreed to include it after Labor MSP Dame Jackie Baillie suggested it, telling MSPs she would be “happy to support” it.
Section 29 of the Scottish National Investment Bank Act now states: “The Scottish Ministers must establish and maintain an advisory group to advise them on the Bank’s affairs, conduct and performance.”
The group must be given “adequate resources by Scottish Ministers to carry out its functions” and include “at least one member appointed to represent the interests of trade unions”.
Although the advisory group appears in the Bank’s management chart, which appears to provide advice directly to ministers, this has never happened in real life.
Tory MSP Douglas Lumsden, who asked Holyrood ministers whether the bank was “operating illegally”, repeatedly asked for updates using written questions last year.
In July, Economy Secretary Neil Gray said work was “continuing to create the advisory group” and the Government was “considering options for remit and membership”.
In August, he said officials were “finalizing decisions” on membership and how often it would meet.
But in November, another response from Mr Gray suggested progress had stalled.
“Details such as membership, recruitment and appointment processes, fees and meeting frequency remain under consideration,” he said.
He promised an update sometime in 2024, but didn’t give an estimated date.
Last week, when Mr Lumsden asked him about the committee issue, Mr.
Pressed on what “due course” meant, Mr Gray said: “The advisory board is a commitment that we hold, and we will follow through on it. SNIB is in a period of transition from its establishment recently that time has passed to become, we hope, self-sustaining. At that time, there are points that we need to establish, including the advisory board.”
Mr Lumsden said the delay was a “scandalous dereliction of duty”.
He told The Herald on Sunday: “There needs to be a lot more transparency around the Scottish National Investment Bank.
“Large sums of taxpayers’ money are being invested without the legally required advisory board.
“Questions are being asked about conflicts of interest in lending decisions and ministerial involvement.
“The Scottish Government must act to have the right governance structure in place as soon as possible.”
Dame Jackie added: “It is incredibly disappointing that the Scottish Government is dragging its heels on the long-awaited establishment of an advisory group to help develop the Scottish National Investment Bank.
“It was always expected that the group would have experts in the field and representatives of the trade unions on this, but the ministers are moving at a snail’s pace to do anything about it.”
In its official statement, the Government said: “It is entirely appropriate that time is given for the Scottish National Investment Bank to be fully established before work begins to create an advisory group.
“The Secretary of the Wellbeing Economy clarified that work is now underway to establish the advisory group, with details to be announced in due course.”