Two members of UK100 joined 20 other leaders from UK business, trade unions, academia and finance in signing a letter to the UK Chancellor of the Exchequer with regards to the design of the new UK National Infrastructure bank.
The letter, penned by E3G Executive Director Nick Molho and signed by our director Polly Billington and Charles Able Smith, identified four design objectives that will be of key importance to the success of the institution, relating to governance, capitalisation, mission-driven mandate and a future-fit definition of infrastructure.
In the 2020 Spending Review, the Chancellor announced the creation of a new National Infrastructure Bank that would "support the Government's ambitions on levelling up and Net Zero" - but details on this have yet to be released.
The bank's purpose would be to unlock private capital for the creation of future-fit, resilient infrastructure across the UK - meeting local investment needs and driving a seriously green recovery. To do this, it needs to be carefully designed with a clear mission, a long-term impact forecast and total independence.
The group letter set out the four design objectives that could be used to guide the design phase of the new bank, including:
1. Governance: The Bank should be an independent institution with full banking powers and borrowing powers, led by an experienced public banker, and governed by a multi-skilled board that is representative both of the whole UK and of the wide range of sectors and disciplines with which the bank will interact.
2. Capitalisation: The institution’s capitalisation level should be appropriate to its mission and functions; appropriate levels of capitalisation and risk tolerance will provide vital signals to the market about both the Bank’s long-term credibility and impact, and the enabling policy environment in which it operates. The institution should be able to access capital markets for both debt and equity. The nature of the Bank’s capitalisation should include opportunities for citizens to participate and invest in their future.
3. Mission-driven mandate: The Bank should be a mission-driven institution, with a legal mandate to achieve the levelling up agenda and the UK’s climate change mitigation and resilience goals as the key driver for supporting recovery, fairness, and a just transition.
4. A future-fit definition of infrastructure: The Bank should aim to crowd-in private capital to future-fit investments which are not yet suitable for wide-scale private investment. A broad investment scope is needed for the Bank to fund a wide variety of projects, in terms of locality, size, and their stage in the pipeline.
Read the full letter by clicking the link below.
(Image by Tyler Casey, Unsplash)