Creation of the UK Infrastructure Bank

Public Accounts Committee Closed Inquiry
Opened: 12 Oct 2022 Closed: 13 Apr 2023 Parliament page
In June 2021, HM Treasury launched the UK Infrastructure Bank (UKIB) with the aim of encouraging private finance alongside public investment to achieve two strategic objectives: helping to tackle climate change and supporting regional and local economic growth. UKIB is a publicly owned company with the Treasury as sole shareholder. … Read more
5 Recommendations
18 Conclusions
1 Report
1 Oral session
3 Letters
1 Event
Activity timeline 7 events
12 Apr
2023
Report published
23 Feb
2023
Correspondence
25 Jan
2023
Report published
22 Nov
2022
Correspondence
8 Nov
2022
Correspondence
7 Nov
2022
Oral evidence
7 Nov
2022
Formal meeting (oral evidence session) · The Grimond Room, Portcullis House
Oral evidence sessions 1 session
7 Nov 2022
View on parliament.uk
Creation of the UK Infrastructure Bank
David Lunn · Department of Business and Trade James Bowler CB · HM Treasury John Flint · UK Infrastructure Bank Philip Duffy · Environment Agency Tim Jarvis · Ofgem
Title HC No. Published Items Response
Thirty-Fourth Report - The Creation of the UK Infrastructure Bank HC 45 25 Jan 2023 23 Responded
Recommendations & Conclusions
23 results
2 Recommendation Accepted
Thirty-Fourth Report - The Creatio…
The Treasury and the Bank have not yet put in place the conditions necessary for...
The Treasury and the Bank have not yet put in place the conditions necessary for the Bank to be a successful and long-lasting institution. The government wants the Bank to be a “long-lasting institution”, providing financing for infrastructure projects well … Read more
Government Response
The government agrees and states that the Bank will provide the requested information to Parliament by the end of September 2023 and in March 2024, then information will be provided through the Annual Reports and Accounts process, and that the Framework Document and Strategic Steer will be updated to reflect the new statutory footing for the Bank.
HM Treasury
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3 Recommendation Accepted
Thirty-Fourth Report - The Creatio…
We are not convinced the Bank has a strategic view of where it best needs...
We are not convinced the Bank has a strategic view of where it best needs to target its investments. The Bank’s 10 deals to date have mostly been relatively conventional investments, including seven loans. While the Bank’s early deals reflected … Read more
Government Response
The government agrees and states that the Bank published its first strategic plan in June 2022, setting out the investment strategy and priority areas, and plans to publish a further update in summer 2023, which will be sent to the Committee.
HM Treasury
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4 Recommendation Accepted
Thirty-Fourth Report - The Creatio…
The Bank’s advisory function remains in the early stages of development and uncertainty remains on...
The Bank’s advisory function remains in the early stages of development and uncertainty remains on how it will be funded and how smaller local authorities will benefit from its activities. The Treasury intends the Bank to provide advisory services to … Read more
Government Response
The government will provide the requested information later in Spring 2023 after completion of the pilot projects in Bristol, Greater Manchester, and West Yorkshire Combined Authority. Recognising that the needs of different size local authorities will vary, the Bank has carefully considered how it can deliver effectively across this spectrum.
HM Treasury
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5 Recommendation Accepted
Thirty-Fourth Report - The Creatio…
Maximising the Bank’s impact will depend on close cooperation with government departments, but it has...
Maximising the Bank’s impact will depend on close cooperation with government departments, but it has not yet worked out how this will operate in practice. The Treasury intends the Bank to play an important role in achieving key elements of … Read more
Government Response
The government agrees and states a lead point of contact within the Bank has been assigned for key departments to understand government priorities and originate investment opportunities, supported by engagement with senior officials and examples of partnerships, and are now engaging with new departments after the restructuring.
HM Treasury
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6 Recommendation Accepted
Thirty-Fourth Report - The Creatio…
The Bank has not fully set out how it will measure and report its performance,...
The Bank has not fully set out how it will measure and report its performance, and how it will evaluate its activities to ensure that it can demonstrate additionality. Evaluation is crucial to ensuring the Bank delivers additionality and that … Read more
Government Response
The Bank will work with the Treasury and UKGI to ensure that future metrics are clear and stretching to ensure the Bank continues to deliver against its strategic objectives, and across its remit. The Bank has already published guidance in October 2022 on how it assesses additionality, and it expects to publish a further document setting out its Impact Framework in the summer of 2023.
HM Treasury
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1 Conclusion Acknowledged
Thirty-Fourth Report - The Creatio…
On the basis of a Report by the Comptroller and Auditor General, we took evidence...
On the basis of a Report by the Comptroller and Auditor General, we took evidence from HM Treasury (the Treasury) and the UK Infrastructure Bank (the Bank) on the creation of the Bank.1
Government Response
The government states that the decision to establish the UK Infrastructure Bank (the Bank) at pace was prioritised to ensure that the institution could begin to deliver on its objectives as soon as possible, supporting investment in infrastructure throughout the UK and helping the government reach its net zero targets.
HM Treasury
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7 Conclusion Accepted
Thirty-Fourth Report - The Creatio…
The Treasury told us it took a “phased approach” to the Bank’s set-up with “checks...
The Treasury told us it took a “phased approach” to the Bank’s set-up with “checks and balances in place” to ensure it would be delivering value for money to the taxpayer.17 The Treasury seconded officials to key Bank posts, and … Read more
Government Response
The Treasury ensured clear governance procedures were in place before opening the UKIB for business, including an agreed Framework Document and appointment of interim Board, with permanent Chair in post, and maintained close oversight as UKIB started to grow its operations.
HM Treasury
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8 Conclusion Acknowledged
Thirty-Fourth Report - The Creatio…
The Treasury intends the Bank to be a “long-lasting institution” providing financing for infrastructure projects...
The Treasury intends the Bank to be a “long-lasting institution” providing financing for infrastructure projects well into the future.21 This label echoes the Green Investment Bank’s status as an “enduring institution,” which was subsequently sold to the private sector five … Read more
Government Response
The Treasury and the Bank will report to Parliament six-monthly on the roll- out of the Bank, including updates on recruitment, deals made and progress towards the operation of their own internal systems, and the Treasury will update the Framework Document and Strategic Steer to ensure that they reflect the new statutory footing for the Bank.
HM Treasury
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9 Conclusion Acknowledged
Thirty-Fourth Report - The Creatio…
The Treasury provided the Bank with £22 billion in capital to cover the first five...
The Treasury provided the Bank with £22 billion in capital to cover the first five years of operation; beyond then, it expects the Bank to be self-financing. We asked whether this was a realistic target. The Bank told us it … Read more
Government Response
The Treasury and the Bank will report to Parliament six-monthly on the roll- out of the Bank, including updates on recruitment, deals made and progress towards the operation of their own internal systems, and the Treasury will update the Framework Document and Strategic Steer to ensure that they reflect the new statutory footing for the Bank.
HM Treasury
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10 Conclusion Deferred
Thirty-Fourth Report - The Creatio…
The Bank’s capacity to make complex and innovative deals is limited by the lack of...
The Bank’s capacity to make complex and innovative deals is limited by the lack of suitably qualified staff members. The Bank has worked with Treasury to complete recruitment to key senior leadership positions that were not filled at launch. At … Read more
Government Response
The Bank will provide the requested information to Parliament by the end of September 2023 and in March 2024 in addition to the information on the Bank’s operations which is already provided to Parliament through the Annual Reports and Accounts (ARA) process.
HM Treasury
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11 Conclusion Deferred
Thirty-Fourth Report - The Creatio…
The Bank told us that, as a result of having insufficient skills and expertise, it...
The Bank told us that, as a result of having insufficient skills and expertise, it has only entered into relatively low risk, more straightforward investment deals, as those are the only deal types it is comfortable delivering with the available … Read more
Government Response
The Bank will provide the requested information to Parliament by the end of September 2023 and in March 2024 in addition to the information already provided through the Annual Reports and Accounts (ARA) process.
HM Treasury
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12 Conclusion Acknowledged
Thirty-Fourth Report - The Creatio…
The costs associated with setting-up the Bank as a separate institution, such as procuring new...
The costs associated with setting-up the Bank as a separate institution, such as procuring new IT systems, make it a more costly option than alternatives such as extending the remit of existing bodies.31 The Bank told us it is working … Read more
Government Response
The Treasury will update the Framework Document and Strategic Steer to ensure that they reflect the new statutory footing for the Bank, and the Treasury and the Bank will continue to work closely together over the coming years to ensure that as the Bank becomes more established, the targets and objectives of the Bank reflect its operations and capacity.
HM Treasury
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13 Conclusion Acknowledged
Thirty-Fourth Report - The Creatio…
The Bank told us it is currently developing several Key Performance Indicators (KPIs) to measure...
The Bank told us it is currently developing several Key Performance Indicators (KPIs) to measure its success. For its two policy objectives, these include carbon emissions abated, jobs created and productivity. The Bank told us it expects to abate 2 … Read more
Government Response
The Bank will work with the Treasury and UKGI to ensure that future metrics are clear and stretching to ensure the Bank continues to deliver against its strategic objectives, and expects to publish a further document setting out its Impact Framework in the summer of 2023.
HM Treasury
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14 Conclusion Not Addressed
Thirty-Fourth Report - The Creatio…
The Bank recognises there could be tensions between its two policy objectives.37 For example, there...
The Bank recognises there could be tensions between its two policy objectives.37 For example, there is a risk that a project could promote local growth but be harmful to the environment. The Bank told us that for any investment that … Read more
Government Response
The government repeats the committee's conclusion.
HM Treasury
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15 Conclusion Acknowledged
Thirty-Fourth Report - The Creatio…
The Bank has developed arrangements for reporting performance and emerging issues to its shareholder (the...
The Bank has developed arrangements for reporting performance and emerging issues to its shareholder (the Treasury), through the shareholder representative (UKGI). However, the Committee has seen other examples in government where similar arrangements apply and where things have gone wrong … Read more
Government Response
The Treasury's Shareholder Representative on the UKIB Board is UKGI who are managed independently but are wholly owned by HM Treasury, and the Treasury are responsible for oversight of UKGI and reporting on their performance to Parliament.
HM Treasury
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16 Conclusion Accepted
Thirty-Fourth Report - The Creatio…
The Bank was set up to address market failures and fill gaps in financing for...
The Bank was set up to address market failures and fill gaps in financing for infrastructure investment.41 The Bank told us that it can do this by taking risk that the market is just not willing to take, for example … Read more
Government Response
The Bank has published its first strategic plan in June 2022, which sets out the Bank’s investment strategy. The Bank has already made 12 deals worth £1.16 billion across a range of priority sectors and have further deals in the pipeline. The Bank’s role is to crowd-in private investment.
HM Treasury
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17 Conclusion Accepted
Thirty-Fourth Report - The Creatio…
The Bank’s 10 deals to date have mostly been in relatively conventional investments.45 This total...
The Bank’s 10 deals to date have mostly been in relatively conventional investments.45 This total consists of seven loans and three equity investments made through funds rather than directly. The Treasury told us that the Bank was deliberately designed to … Read more
Government Response
The Bank has published its first strategic plan in June 2022, which sets out the Bank’s investment strategy. The Bank has already made 12 deals worth £1.16 billion across a range of priority sectors and have further deals in the pipeline. The Bank’s role is to crowd-in private investment.
HM Treasury
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18 Conclusion Acknowledged
Thirty-Fourth Report - The Creatio…
The Bank’s 10 deals to date have focused on clean energy (five) and digital (four)...
The Bank’s 10 deals to date have focused on clean energy (five) and digital (four) projects.49 These deals have generally been in areas of technology and risk where projects are relatively common, for example broadband and solar power farms.50 The … Read more
Government Response
A lead point of contact within the Bank has been assigned for departments that are most critical to delivering our mission, each of whom has regular engagement with their department to understand the government’s strategic priorities and help originate and assess investment opportunities.
HM Treasury
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19 Conclusion Acknowledged
Thirty-Fourth Report - The Creatio…
The Bank’s functions include providing an expert advisory service to help local authorities and other...
The Bank’s functions include providing an expert advisory service to help local authorities and other project sponsors to develop and finance infrastructure projects.53 The Bank told us that establishing this service is not straightforward, compared to its local authority lending … Read more
Government Response
The government and the Bank welcome the Committee’s recommendation and will provide information later in Spring 2023 after completion of the pilot projects. The Bank will share insights from pilots and engagement with local authorities and is already engaged with a range of local authorities for its next wave of advisory work.
HM Treasury
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20 Conclusion Acknowledged
Thirty-Fourth Report - The Creatio…
The Bank told us that in developing the pilots, it wanted to try to understand...
The Bank told us that in developing the pilots, it wanted to try to understand and define problems that it thinks will be most common across the local authority landscape, such as financing heat networks, zero-emission buses and social housing … Read more
Government Response
The government and the Bank welcome the Committee’s recommendation and will provide information later in Spring 2023 after completion of the pilot projects. The Bank will share insights from pilots and engagement with local authorities and is already engaged with a range of local authorities for its next wave of advisory work.
HM Treasury
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21 Conclusion Acknowledged
Thirty-Fourth Report - The Creatio…
The Bank has not reached a decision on how it will fund its advisory function.
The Bank has not reached a decision on how it will fund its advisory function. Decisions on funding will be important given the Bank’s expectation that demand will be significant, and that it will not have the resource to cover … Read more
Government Response
The Bank will share the key insights developed through the pilots and its engagement with a range of local authorities to date in Spring 2023, and is already engaged with a range of local authorities for its next wave of advisory work, to be announced shortly.
HM Treasury
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22 Conclusion Acknowledged
Thirty-Fourth Report - The Creatio…
The activities and policy objectives of the Bank overlap with departments across government.
The activities and policy objectives of the Bank overlap with departments across government. For example, the Department for Levelling Up, Housing and Communities (DLUHC) has policy responsibilities in relation to local government and to regional and local economic growth.59 The … Read more
Government Response
A lead point of contact within the Bank has been assigned for departments that are most critical to delivering our mission, each of whom has regular engagement with their department to understand the government’s strategic priorities and help originate and assess investment opportunities.
HM Treasury
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23 Conclusion Acknowledged
Thirty-Fourth Report - The Creatio…
We asked whether the Bank had mechanisms in place to manage pressures from competing government...
We asked whether the Bank had mechanisms in place to manage pressures from competing government departments looking for the Bank to invest in their policy areas. The Bank told us that it is operationally independent to make its own decisions, … Read more
Government Response
A lead point of contact within the Bank has been assigned for departments that are most critical to delivering our mission, each of whom has regular engagement with their department to understand the government’s strategic priorities and help originate and assess investment opportunities.
HM Treasury
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Government Response AI assessment · 23 of 5 classified
Accepted 8
Acknowledged 12
Deferred 2
Not Addressed 1
Total 5 recs + 18 conclusions
Correspondence 3 letters
23 Feb 2023 Correspondence from Andrew Griffith MP, Economic Secretary to the Treasury, HM Treasury, re update on the UK Infrastructure Bank’s (UKIB), dated 2 February 2023
Parliament page
22 Nov 2022 Correspondence from John Flint, Chief Executive Officer, Infrastructure Bank, re a profile of the banks interim staff, dated 17 November 2022
Parliament page
8 Nov 2022 Correspondence from John Flint Chief, Executive Officer, Infrastructure Bank, re update on progress, dated 1 November 2022
Parliament page