Spending Review 2020: British Business Bank Response
At Spending Review 2020, the government has today announced a number of measures to support smaller businesses, to be delivered by the British Business Bank.
Catherine Lewis La Torre, Chief Executive, British Business Bank, said: “The Chancellor has confirmed the British Business Bank’s budgets for 2021/22, as well as announcing expansion in some areas. This package enables us to build on our work to date, including in response to Covid-19, so that we can continue to support smaller businesses in the UK and build the foundations for the recovery.”
The announcements include:
The government has confirmed that throughout 2021/22 it will continue to provide the British Business Bank with the resources to help make finance markets work better for smaller businesses across the UK, so that they can prosper and grow.
Covid-19 Support Schemes
Since the onset of the Covid-19 pandemic the British Business Bank has delivered three loan guarantee schemes, providing close to 1.5 million businesses across the UK with over £65 billion of support. The British Business Bank has also launched the Future Fund, helping nearly 900 early stage growth businesses that otherwise would not have been able to access the finance they needed. These programmes form an important part of the government’s economic response to the pandemic, and we welcome confirmation that funding for the appropriate people, structures, systems and processes to effectively manage the support we have deployed will continue to be in place.
Start Up Loans
We welcome the government’s announcement that it will increase funding for the British Business Bank’s Start Up Loans programme so that it can provide 1,000 more loans in 2021/22 than were originally funded in the March 2020 Budget. Even more business owners across the UK will now be able to access the finance they need to start a business.
Record numbers of potential business owners have accessed the British Business Bank’s Start Up Loans programme during the Covid-19 pandemic, and this expanded funding will allow the programme to play an important role in the UK’s economic recovery.
Northern Powerhouse Investment Fund
Since its launch in 2017, the £400m Northern Powerhouse Investment Fund has benefited more than 700 smaller businesses across the North West, Yorkshire and the Humber and Tees Valley regions, increasing employment, skills, turnover and investment for recipient businesses. More recently, the Fund’s activity has helped support businesses during the Covid-19 pandemic. The government recognises the success of the Northern Powerhouse Investment Fund and is providing the Fund with sufficient resources to commit an additional £100m in 2021/22.
Financing High-Growth Firms
Since the 2017 Patient Capital Review, the British Business Bank has provided substantial support for innovative, high-growth businesses seeking access to long-term growth capital. Innovative businesses are essential to driving increased productivity across the UK, and we are pleased that the government has provided the Bank with the resources to commit an additional £100 million to innovation and growth finance in 2021/22, as well as a further £70 million for the National Security Strategic Investment Fund.
We will continue to work closely with HM Treasury, the Department for Business, Energy & Industrial Strategy and UKGI to deliver on the Spending Review announcements over the coming year.
About the British Business Bank
The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.
The British Business Bank programmes were supporting more than £8bn of finance to over 98,000 smaller businesses at end of March 2020. Since March 2020, the British Business Bank has launched four new Coronavirus business loan schemes, delivering tens of billions of pounds of finance to over a million businesses.
As well as increasing both supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of the finance options available to smaller businesses:
- The British Business Bank Finance Hub provides independent and impartial information to high-growth businesses about their finance options, featuring short films, expert guides, checklists and articles from finance providers to help make their application a success. The site also features case studies and lessons from real businesses to guide businesses through the process of applying for growth finance.
- The Business Finance Guide (published in partnership with the ICAEW and a further 21 business and finance organisations) impartially sets out the range of finance options available to businesses at all stages – from start-ups to SMEs and growing mid-sized companies. Businesses can take the interactive journey at https://thebusinessfinanceguide.co.uk/
As the holding company of the group operating under the trading name of British Business Bank, British Business Bank plc is wholly owned by HM Government and is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). The British Business Bank operates through a number of subsidiaries, none of which are authorised or regulated by the FCA or the PRA.
British Business Bank plc and its principal operating subsidiaries are not banking institutions and do not operate as such. A complete legal structure chart for British Business Bank plc and its subsidiaries can be found on the British Business Bank plc website.