Scotland’s third sector is no stranger to encouraging forward-looking ideas that protect and enhance our society, economy and environment. But, are we all strangers to the Scottish National Investment Bank (the ‘Bank’ or SNIB), billed by the First Minister as a cornerstone of the future Scottish economy?
Given that a thriving third sector is vital to Scotland’s economy and society, not nearly enough social enterprises, charities and communities are familiar with the Bank, even as the Scottish Parliament considers the general principles of the Bill that will ultimately lead to a National Investment Bank that the third sector might wish to access.
As well as the introduction of the Scottish National Investment Bank Bill in February 2019, the Scottish Government has committed to invest £2 billion to capitalise the Bank in its first 10 years, with existing initiatives – such as the Building Scotland’s Future Fund – to be brought into this new financial institution.
About the Bill
Before then, the Bill that requires Scottish Ministers to establish the Bank must be passed by the Scottish Parliament. Although the Bill is more of an enabling framework and is light on detail, it does make provision for crucial areas including the purpose, objects, ownership and governance of the Bank.
While a number of key organisations are shaping the debate on these issues, greater awareness and interest from the third sector in the design and implementation of the Bank are needed, especially if it is to truly work for people and communities across Scotland and not simply for the usual profiteers.
A ‘mission-oriented’ approach will steer the Bank’s investments, making it a £2 billion opportunity to help transform and reorient the economy for people, communities and the environment of Scotland.
That could include patient medium- and long-term equity and loan investment in enterprises and communities that are willing supporters of missions such as empowering citizens, transitioning to a low carbon economy, ensuring a human right to housing, or increasing gender-competent assistance to entrepreneurs.
Which missions the Bank chooses to pursue is still to be decided and how these decisions are reached is unknown – perhaps a citizens’ jury would come in handy? At the very least, they must be driven by the Bank’s vision and Scotland’s national challenges as featured in our National Performance Framework.
SCVO’s vision for the Bank is an investment-led transition to a zero-carbon economy that accelerates social and environmental impact ahead of economic growth. Based on this vision, we have identified a number of priority areas where we are calling for changes to the Bill.
Our first priority is securing legislative measures for the Bank’s main and ancillary objectives that enshrine an environmental and social-economic focus in law. The broad mandate set out by the Bill in the Bank’s objectives fails include the Scottish Government’s vision for the Bank – set out in its implementation plan – which is key to ensuring the Bank is not beholden to mere economic growth and a financial rate of return.
Our second priority is promoting the need for inclusivity and equality within the Bank’s governance and securing arrangements that reflect Scotland’s population and sectors, including but not limited to the Bank’s Advisory Group. The Bank’s governance and lending criteria should reflect the values of openness and participation and must draw on the experiences and expertise of civic Scotland to support its design and implementation.
Our third priority is raising awareness of the private and commercially focused narrative of the Bill and secure the third sector’s ability to access Bank finance. We are calling for narrow and restrictive wording to be altered to indicate that the Bank is genuinely inclusive and can lend to any non-public sector body willing to contribute to the Bank’s vision, including charities, social enterprises, and co-operatives.
Our priorities are shared by many third sector organisations, including Social Enterprise Scotland, and they have featured prominently in evidence sessions with Members of the Economy, Energy and Fair Work Committee. Our next blog will analyse how Stage One of the Bill process is progressing – the deadline for Stage One is 27 September 2019.