The British Business Bank must be more independent to properly serve the needs of private businesses, according to a new report.
The Private Business Commission claimed the current system of government oversight for the state-owned regional SME investor hampers its ability to direct funds effectively.
The report, supported by think tank the Entrepreneurs Network, argued the innovation bank’s investing is too determined by “the political priorities of whoever is in Downing Street, rather than necessarily allowing it to provide funding in the best way possible”.
It also suggested that requiring annual government reviews meant the ambitions for long-term strategy were at best limited to electoral cycles.
The British Business Bank has established several regional funds to direct cash in specific areas including Scotland, Northern Ireland, Wales, the South West and the north of England.
The Private Business Commission report cited last year’s Start-up, Scale-up Review from the Labour Party, which called to give “the British Business Bank the true independence it needs to invest in growth”.
The report said the system of the government reviewing the British Business Bank’s plan annually and requiring state approval for changes to the plan “makes it difficult for the BBB to pursue its objectives on a long-term basis”.
Labour’s more recent Financing Growth report, published in January, once again highlighted the importance of the British Business Bank as a tool to drive investment into UK businesses.
The report suggested implementing “additional KPIs” for the bank’s regional funds “to ensure they provide access to SME financing across all regions”.