By Daniel Hunter
The Government has appointed a group of respected banking, business and finance experts to advise on the direction and priorities of the business bank.
In particular, the group will look at how to best address the long term problems around the effective and efficient provision of finance to small and medium sized enterprises (SMEs).
As announced in December, the advisory group will be chaired by Sir Peter Burt, the former Chief Executive of the Bank of Scotland, and will also comprise:
• Lucy Armstrong, Chief Executive of the Alchemists, chair of the CBI’s SME Council and chair of Capital for Enterprise Limited
• Brendan Barber, former General Secretary of the TUC
• Caroline Green, Finance Director at Metalrax Group
• Stephen Welton, Chief Executive of the Business Growth Fund plc
• Baroness Patience Wheatcroft, non-executive director of Fiat SpA and of St James’s Place Plc, and advisory board member of Huawei Plc and Pelham Bell Pottinger.
Business Secretary Vince Cable said:
“The business bank's advisory group, chaired by Sir Peter Burt, is a great example of the kind of modern leadership we are trying to encourage in British companies today. Half of the group are women and half of the group are directly involved in SME finance.
“The business bank is on schedule and the appointments today take it one step closer towards delivering more long-term funding for SMEs.
“The Government already has in place a range of measures to help small and medium sized businesses access lending in the short-term. But this new institution will fill a vacuum in medium to long term credit that many viable small businesses are struggling to raise to grow and create jobs.”
Sir Peter Burt, Chair of the business bank advisory board, said:
“The advisory group has a major task but we have been assured of support from all quarters. Over the past 25 or more years, no government has put enough weight behind attempts to finding a solution to the SME finance problem, but I hope that this time there will be the necessary concerted effort.
“We cannot create a business bank overnight, but BIS has sufficient powers and approvals to immediately start getting money into the SME sector and this will be a major focus at the same time as the task of advising on and laying the foundations of a long-term provider of support for the SME sector.”
Already £1 billion has been committed by the Government to the initiative. The impact and reach of this funding will be maximised by exploring joint investment opportunities with the private sector and the use of Government guarantees. Autumn Statement confirmed that that £300 million of the new funding will be made available over the next two years, through co-investment with the private sector, to stimulate the development of new sources of finance that will help diversify the business finance market. Further detail on how this funding will work will be made available will be provided at Budget 2013.
Existing Government business finance schemes will also be brought together so that they are managed as a single portfolio. Government-backed business advice services will also be brought closer together, harmonising their engagement with customers and co-ordinating them closely with finance interventions, to improve accessibility for SMEs.
Discussions will soon begin with the European Commission to ensure the proposals are in line with state aid rules.
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