A Scottish National Investment Bank will be established to take a ‘new approach’ on capital investment, the First Minister Nicola Sturgeon said in the Programme for Government announcement.
The commitment, which is part of the Programme for Government 2017-18, has been informed in part by advice from the Council of Economic Advisers (CEA).
Sturgeon told MSPs (Members of the Scottish Parliament), “The Council of Economic Advisers has made clear the importance to our future economic success of continued infrastructure development, adequate finance for high growth businesses and strategic investments in innovation.
“A significant constraint faced by many businesses with growth potential is access to long term, patient capital.”
Benny Higgins, CEO of Tesco Bank has agreed to lead work on developing the Bank’s precise remit, governance, operating model and approach to managing financial risk.
Higgins said, “It is a privilege to be asked by the First Minister and the Scottish Government to lead the work on creating the Scottish National Investment Bank. It is vital that Scotland puts in place the right structure to develop long-term, sustainable growth for all aspects of the economy.”
Sturgeon also announced a new Planning Bill, to support the efficient delivery of new homes and infrastructure. “We believe that the time is now right to take a new approach on capital investment,” she said. “Alongside this commitment, we will provide the infrastructure that is needed for Scotland to be a world leading economy.
“Over the next year, we will make further progress towards our target of 50,000 affordable homes by the end of this Parliament. Our new Planning Bill will also help secure the housing development that the country needs. We will also continue work to improve the quality of our housing stock.
“Scotland has a good record on housing – we are building social housing at a faster rate than any other part of the UK and we have protected social housing by removing the right to buy.”
The SNP will also continue to implement the 2016 Land Reform Act and shortly approve the first strategic plan of the new Land Commission. It will outline a programme of research to inform options for future change – for example, possible measures to tackle constraints on the supply and cost of land for housing, and possible tax and fiscal reforms, including the potential for some form of land value based tax.
Scotland’s housebuilding industry has reacted to the Programme for Government announcement by emphasising that Scotland must have a housing system that works for everyone.
Homes for Scotland Chief Executive Nicola Barclay said, “With the number of new homes being built in Scotland flatlining, tackling our country’s housing crisis requires a broad approach that includes all market segments.
“The private sector has a huge role to play by not only helping to meet the aspiration of Scots to own their own home but also in relieving pressure on social housing. Key to the Scottish government’s objectives will be its delivery of an effective planning system and the provision of the infrastructure that is needed to support development. We therefore cautiously welcome the announcement of a Scottish Investment Bank, however will need to see the detail on how it can facilitate this provision.
“By providing a policy framework that supports housing delivery, the Scottish Government can reap the benefits of the significant economic contribution and job creation opportunities home building can offer.”
PICTURE CREDIT: Kenneth Halley