Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the role of publicly-backed development finance institutions in supporting access to growth capital for small and medium-sized enterprises; and what steps they are taking to encourage collaboration between those institutions and commercial lenders to support regional economic development.

The Government recognises the important role that Public Financial Institutions play in improving businesses’ access to growth capital.

The British Business Bank (BBB), as the UK’s economic development bank, has supported over 100,000 smaller businesses through its programmes and has a strong track record of crowding in private capital into early‑stage equity and later‑stage growth finance.

At the Spending Review the Government expanded the BBB’s total financial capacity to £25.6 billion, enabling it to support a greater volume and range of investments. As part of this uplift, the BBB’s new Industrial Strategy Growth Capital initiative will provide £4 billion of capital to the eight priority Industrial Strategy Sectors, leveraging £12 billion of further private investment.

To help the next generation of UK unicorns at the critical stage when access to scale-up capital is most challenging, the BBB will support 10 new-to-market growth-stage fundraisings over the next 10 years, increasing the number of such funds in the market by 100 per cent.

The BBB will also deploy £2.6 billion to ensure entrepreneurs across the UK — regardless of location or background—can access the finance required to grow. This support will boost smaller business growth across all nations and regions.

The UK’s export credit agency, UK Export Finance (UKEF), also supports SMEs and regional growth by ensuring no viable UK export fails through lack of finance and insurance. UKEF offers finance for SME exporters through commercial lenders. Last year, the Government increased UKEF’s capacity by £20 billion, bringing the total to £80 billion, and is legislating to increase statutory limits of UKEF support so lack of capacity does not limit support for exporters.

We continue to strengthen coordination between PuFins. The BBB’s new Strategic Plan commits to working more closely with other Public Financial Institutions to provide clearer, more joined up routes for businesses to access the right form of finance at the right stage of their growth.

The Government will continue to monitor the effectiveness of development finance interventions and ensure they complement private‑sector activity while supporting enterprise, innovation and economic growth across every region.