Public finance bodies need more clarity, says boss of Reeves’ wealth fund
The boss of Rachel Reeves’ flagship wealth fund has admitted British entrepreneurs want more clarity across public finance bodies as concerns rise over the growing number of institutions.
Former RBS boss Oliver Holbourn, who the Chancellor appointed last July to lead the National Wealth Fund (NWF), said “people want more confidence in who they’re going to” when seeking capital from a public institution.
The fund, which was previously known as the UK Infrastructure Bank until it was repurposed by the incoming Labour government in October 2024, is one of a wide array of state-funded investment institutions with overlapping remits, which also includes the British Business Bank, The Office for Investment, ARIA, UKRI and Great British Energy. The long list of agencies has sparked head-scratching among entrepreneurs seeking government backing.
“People should feel free to approach any of us, and then we need to work away behind the scenes to make sure… you can get help from either the National Wealth Fund or another body,” Holbourn, who took up the post in November, said.
He said there were discussions around “developing a technology tool to make that easier” but added “in the interim, I hope the message is really clear, approach whoever it is you think you should approach – and we’ll figure it out in the background”.
Clarity ‘getting worse’ says former NWF boss
A report published this week from lobby group TheCityUK and Big Four consultancy giant PwC warned the rapid increase of public finance bodies like the National Wealth Fund and British Business Bank had made it more difficult for entrepreneurs targeting innovation.
Holbourn’s predecessor, former HSBC chief John Flint, had previously sounded off on the rise of the public finance bodies telling the Treasury Select Committee he would “encourage” the Treasury “not to close the file” on making changes to the public finance landscape.
Flint said he had “huge sympathy” for those in the private sector as they face the “challenge” of where to access finance in a crowded pool of institutions.
“That’s not getting better, I think that’s getting a little bit worse because there are more public finance institutions available,” he added.
Within days of taking office in July 2024 Reeves “instructed officials to immediately begin work to align the UK Infrastructure Bank and British Business Bank under a new National Wealth Fund”.
But months later the Treasury would announce the UK Infrastructure Bank would “become” the National Wealth Fund leaving the British Business Bank as a separate entity.
Louis Taylor, chief executive of the British Business Bank, previously told Morning Wire: “A new government came in, and inevitably, they had not had their hands on the levers of all these institutions.”
Wealth fund gets revamped strategy
In its updated strategic plan published on Wednesday, the NWF quantified its long-term goals for the first time with a mission to create and support more than 200,000 jobs and save 500m tonnes of CO2 emissions by 2050.
The fund has also pledged to drive more than £100bn in finance by the end of its strategic plan in 2031. This includes the £36.6bn commitment to the major nuclear power station on the Suffolk coast Sizewell C.
The risk appetite of the policy bank has been lifted to £7bn from £4.5bn previously giving the fund further leeway to support sector development.
A report from the Treasury Select Committee in October concluded the body would face challenges due its size in its mission to support Reeves’ bid for economic growth.
“The NWF is not a conventional sovereign wealth fund that invests wealth generated from natural resources to benefit future generations,” the report said.
It also noted the branding of the investment vehicle’s structure could be “misleading,” which followed experts throughout the inquiry stating it was a “misnomer”.
On the launch of the new plan, Reeves said: “When I became Chancellor, I created the National Wealth Fund to drive growth, and since then it has invested billions of pounds in our industries and infrastructure, helping to create tens of thousands of jobs across Britain.
“This new plan will go even further with £100bn for our communities – delivering much-needed investment as we push to deliver our modern Industrial Strategy and build a Britain that works for all.”