National Wealth Fund Chief Calls for Clarity in Public Finance Landscape
The head of Chancellor Rachel Reeves' flagship National Wealth Fund has acknowledged that British entrepreneurs are seeking greater clarity across public finance bodies, as concerns mount over the proliferation of state-funded investment institutions.
Entrepreneurs Face Confusion Over Multiple Agencies
Oliver Holbourn, who was appointed by the Chancellor in July to lead the National Wealth Fund (NWF), stated that business leaders desire more confidence when approaching public institutions for capital. "People want more confidence in who they're going to," Holbourn explained, highlighting the challenges faced by those seeking government backing.
The National Wealth Fund, which was rebranded from the UK Infrastructure Bank following Labour's election victory in October 2024, joins a crowded field of public finance bodies. This array includes the British Business Bank, The Office for Investment, ARIA, UKRI, and Great British Energy, all with overlapping responsibilities that have created confusion among entrepreneurs.
Interim Solutions and Long-Term Planning
Holbourn, who assumed his position in November, suggested that entrepreneurs should feel comfortable approaching any of these institutions. "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," he said.
The NWF chief revealed that discussions are underway about developing technological tools to streamline this process. However, he emphasized that in the meantime, the message remains clear: "Approach whoever it is you think you should approach – and we'll figure it out in the background."
Growing Concerns About Institutional Proliferation
A recent report from TheCityUK and PwC warned that the rapid expansion of public finance bodies, including the National Wealth Fund and British Business Bank, has complicated matters for innovation-focused entrepreneurs. This concern was echoed by Holbourn's predecessor, former HSBC chief John Flint, who told the Treasury Select Committee that the situation was deteriorating rather than improving.
"That's not getting better, I think that's getting a little bit worse because there are more public finance institutions available," Flint stated, expressing sympathy for private sector actors navigating this complex landscape.
Evolution of the National Wealth Fund
The National Wealth Fund's creation followed Chancellor Reeves' instruction to officials in July 2024 to align the UK Infrastructure Bank and British Business Bank under a new umbrella. However, subsequent announcements revealed that the UK Infrastructure Bank would transform into the National Wealth Fund, while the British Business Bank would remain separate.
Louis Taylor, chief executive of the British Business Bank, noted the challenges of this transition, stating: "A new government came in, and inevitably, they had not had their hands on the levers of all these institutions."
Ambitious Strategic Goals Unveiled
In its updated strategic plan published this week, the National Wealth Fund has quantified its objectives for the first time, committing to:
- Create and support over 200,000 jobs by 2050
- Save 500 million tonnes of CO2 emissions by 2050
- Drive more than £100 billion in finance by 2031
This substantial financial commitment includes £36.6 billion allocated to the Sizewell C nuclear power station on the Suffolk coast. Additionally, the fund's risk appetite has increased from £4.5 billion to £7 billion, providing greater flexibility to support sector development.
Challenges and Criticisms
A Treasury Select Committee report in October highlighted potential challenges for the NWF, noting that its structure might be "misleading" to some observers. The report emphasized that "the NWF is not a conventional sovereign wealth fund that invests wealth generated from natural resources to benefit future generations," with experts throughout the inquiry describing it as a "misnomer."
Despite these concerns, Chancellor Reeves remains optimistic about the fund's potential. "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," she stated.
Reeves added: "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."
