The latest publication from the Department for Business, Innovation and Skills explains how the Business Bank is being developed. It describes the Business Bank's purpose, success measures and timescales.
The Government has set an ambition to make the UK one of the best places to start, finance and grow a business. Extensive reforms across the wider business environment in areas such as tax, regulation, planning, skills and infrastructure are helping to deliver this.
The Government envisages the business bank being its lasting champion for ensuring that the finance markets in the UK are serving the needs of UK businesses. The business bank is integral to the Government’s growth ambitions and its industrial strategy. Through the business bank the Government will demonstrate its commitment to improve these markets and will strive to ensure that the capital deployed by Government is utilised effectively to create the best possible conditions to start and grow a business in the UK.
The objectives of the business bank programme:
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support the development of diverse debt and equity finance markets for businesses, promoting competition and increased supply through new finance providers;
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increase the provision of finance to viable but underserved businesses, in particular improving the provision of long term finance;
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bring together the management of the Government’s existing business finance schemes, creating a single portfolio and simplifying access for businesses;
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consolidate the provision of and increase the awareness of available support and advice to high growth businesses and those needing specialist support; and
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function on commercial terms to use taxpayers’ funds most effectively.
The business bank’s success will be measured against its ability to:
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Raise the overall amount of finance provided to viable but underserved SMEs and mid-sized businesses;
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Increase the diversity of suppliers and products in the SME and mid-sized finance market;
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Improve effectiveness, raise awareness and increase use of Government’s business finance support and advice services;
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Achieve the above while generating an appropriate return on the bank’s capital dedicated to commercial or near-commercial schemes and maximising the impact of those schemes which involve the provision of subsidy.
The business bank will not directly lend to or invest in businesses nor use taxpayers’ funds to prop-up businesses with little chance of success. It will is to work with the private sector to support and increase the capacity of current channels of finance, rather than simply replace private sector provision.
Business bank’s programmes will start operating from within the Department for Business, Innovation and Skills (BIS) next month and the bank itself is expected to become a fully operational new institution in Autumn 2014. Vince Cable has asked Sir Peter Burt to chair an Advisory Group to advise on how to utilise the capital set aside for the business bank quickly and efficiently, as well as to advise on other questions on the scope and objectives for the institution. This Advisory Group will report in the middle of the year.
Full strategy document
BBA statement
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