The Scottish National Investment Bank was set up to do one thing: deploy patient, mission-led capital into Scottish businesses that the commercial market wouldn't or couldn't back. Three years into its operation, Sir John Elvidge, one of the most respected voices in Scottish public administration, is arguing that the rules constraining how it operates are too tight, and that the bank is not reaching its potential as a result.
Elvidge, who served as Permanent Secretary to the Scottish Government between 2003 and 2010, has called for a relaxation of SNIB's financial rules, suggesting the current framework limits the bank's ability to take the kind of risk that mission-driven investment actually requires. SNIB was capitalised with £2 billion over ten years when it launched in 2020, with a mandate to support businesses contributing to a just transition, addressing inequality, and building a wellbeing economy. The gap between that ambition and what the rules currently allow is, in Elvidge's view, too wide.
This matters for Scottish SMEs in a very direct way. Access to growth capital remains one of the most consistent pressure points for Scottish businesses outside the central belt, and even within it. According to the British Business Bank's 2024 Small Business Finance Markets report, Scotland continues to see lower equity investment per capita than London and the South East, and the funding gap for businesses seeking between £250,000 and £2 million remains stubbornly wide. SNIB exists precisely to address that gap. If its own rules are preventing it from doing so, that is a structural problem worth fixing.
The Scottish Government's economic strategy has repeatedly identified access to finance as a priority for SMEs. Scottish Enterprise and Highlands and Islands Enterprise both run their own investment programmes, but SNIB was designed to operate at a different scale and with a longer time horizon than grant-based support. Loosening the financial constraints on how SNIB can structure deals, take equity positions, or absorb short-term losses on high-potential investments could meaningfully change what is available to a Scottish founder who is beyond grant stage but not yet ready, or attractive enough, for commercial venture capital.
There is a broader context worth noting. The UK Government's National Wealth Fund, announced by the Treasury in 2024, is positioning itself as the primary vehicle for mission-led investment across Britain. If SNIB is operating under rules that prevent it from moving boldly, Scotland risks ceding that ground to a Westminster-controlled institution, with the inevitable consequence that investment decisions for Scottish businesses are made further from the people who understand them. A more empowered SNIB, operating with greater financial flexibility and a clearer mandate to back Scottish growth businesses, is not just a financial argument. It is an economic sovereignty argument, and Elvidge appears to understand that.