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Seòmar agus comataidhean

Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 6 July 2025
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Displaying 2569 contributions

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Public Audit Committee [Draft]

“Scottish National Investment Bank”

Meeting date: 28 May 2025

Colin Beattie

I have one final point, on which you might be able to provide clarity. The bank receives an allocation for year 1, but drawdowns happen over a period that crosses the annual budgeting period. Therefore, I presume that there are mechanisms in place to ensure that any unallocated capital issued in year 1 can roll over to year 2.

Public Audit Committee [Draft]

“Scottish National Investment Bank”

Meeting date: 28 May 2025

Colin Beattie

Financial transactions are not part of the block grant. They have to be repaid, and the obligation to make the repayments is on the Scottish Government. Is there a back-to-back agreement with SNIB in connection with that?

Public Audit Committee [Draft]

“Scottish National Investment Bank”

Meeting date: 28 May 2025

Colin Beattie

Factually, you are absolutely right, convener. Mr Denholm has announced publicly his intention to retire, and I understand that the bank is making arrangements to recruit a new chief executive and has stated that Mr Denholm will remain with the bank in an advisory capacity into 2026, to support transition handover arrangements. If that is consistent with a smooth handover and the transfer of knowledge, and if the bank has the financial resources to allow for those arrangements, that feels appropriate.

On the issue of the turnover, it is perhaps inevitable that there will be a change of leadership in a new organisation that is establishing itself. More generally in the public sector, change and turnover—recruiting and retaining people in senior leadership roles—is challenging for public bodies, as we have commented to the committee in relation to the NHS. I have no further insight into the specifics of the turnover and can refer only to the bank’s public statements—which, I am sure, the committee has seen—about why there has been a change of leadership.

Public Audit Committee [Draft]

“Scottish National Investment Bank”

Meeting date: 28 May 2025

Colin Beattie

I will move on to my final question, the subject of which has been touched on already. Because annual budget rules affect the bank’s ability to plan long term, any investments that are made are not for the long term; I note, however, that part of the bank’s responsibility is to provide patient capital. Can you tell us a little bit more about how the accounting rules impact on the bank’s ability to plan long term? Are you aware of engagement between the bank’s leaders and Scottish ministers on providing increased flexibility? After all, it is difficult for a bank to operate within such rigid rules.

Public Audit Committee [Draft]

“Scottish National Investment Bank”

Meeting date: 28 May 2025

Colin Beattie

Elements such as giving advice, presumably on how to invest capital, are highly-specialised, highly-paid areas in which people get mega bonuses and so on. How is that compatible with SNIB and, to be blunt, how can it afford that?

Public Audit Committee [Draft]

“Scottish National Investment Bank”

Meeting date: 28 May 2025

Colin Beattie

It is an extremely competitive area that has some really big players. There are a lot of questions about where in the existing market SNIB might fit—or, indeed, whether there is a place that it can fit or find a niche to take on.

Public Audit Committee [Draft]

“Scottish National Investment Bank”

Meeting date: 28 May 2025

Colin Beattie

Based on what you have said, it seems that the bank is aware of those risks and is managing them, to the extent that it can.

Public Audit Committee [Draft]

“Scottish National Investment Bank”

Meeting date: 28 May 2025

Colin Beattie

What happens if the asset becomes impaired?

Public Audit Committee [Draft]

“Scottish National Investment Bank”

Meeting date: 28 May 2025

Colin Beattie

Given that the whole purpose of the Scottish National Investment Bank is to take on higher-risk assets, the risk that it will end up with impaired assets will be higher. That is part of its job.

Public Audit Committee [Draft]

“Scottish National Investment Bank”

Meeting date: 28 May 2025

Colin Beattie

What are the implications of that? Financial transactions have to be repaid, and that obligation is on the Scottish Government and not necessarily on SNIB, unless there is a back-to-back agreement on that. It is likely that, as those transactions come to maturity, that will, in effect, reduce SNIB’s capital, because it will have to return the money to the Scottish Government, which will have an impact on future investment. Given that it has been receiving financial transactions for a number of years, the cumulative effect of those payments down the line could be quite significant.