The Scottish Government has confirmed that work is underway to establish an advisory board to oversee the activities of the Scottish National Investment Bank (SNIB) after Disruption Banking raised questions about the lawfulness of the SNIB’s operations.
Under Section 29 of the Scottish National Investment Bank Act 2020 passed by Holyrood, “the Scottish Ministers must establish and maintain an advisory board to provide [the SNIB] with advice on the Bank’s objects, conduct, and performance.” Almost three years after this Act was passed, no such board has been established despite these legal obligations.
In August, Douglas Lumsden, a Member of the Scottish Parliament for North East Scotland, raised the issue in Holyrood. He was told by the Scottish Government that “the role of the advisory group has no bearing on the legality of the operation of the Bank,” but that work to establish this board would soon commence.
In response to a follow-up question yesterday, Neil Gray, the Cabinet Secretary for Wellbeing Economy, Fair Work, and Energy, told Lumsden that “now the Bank is fully established, and has a growing portfolio of investments, work is underway to advise ministers on the establishment of the advisory group.”
“Details such as: membership, recruitment and appointment processes, remuneration and meeting frequency remain under consideration. We will provide an update on this work in 2024.”
Pressure for an advisory group to be established has been growing as questions remain over how effectively and appropriately the SNIB is using taxpayers’ money. Disruption Banking recently revealed that the SNIB has made just a 2% return on £460 million worth of taxpayers’ money – a real terms loss and significantly less than commercial savings rates.
Questions have also been raised about how the Bank manages potential conflicts of interest, with Disruption Banking revealing several investments in companies linked to the Scottish Government or SNIB employees’ family members.
Advocates of the advisory board hope that the group would help the Bank manage such situations more effectively and transparently and help improve its overall performance.
Author: Harry Clynch