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National Wealth Fund

Formerly	UK Infrastructure Bank (2020-2024)
Company type	Sovereign Wealth Fund
Industry	Financial services
Founded	June 2021
Headquarters	Leeds, England, UK
Area served	United Kingdom
Key people	John Flint (CEO)
AUM	£27.8 billion (October 2024)
Owner	Government of the United Kingdom
Website	uknwf.org.uk

The National Wealth Fund (NWF), formerly the UK Infrastructure Bank, is the sovereign wealth fund of the United Kingdom. The fund is publicly owned with its sole shareholder being the Treasury Solicitor in the capacity of HM Treasury. The goal of the fund is to invest alongside the private sector in projects within the United Kingdom. The bank has a total capitalisation of £27.8 billion. The fund is a "strategic" sovereign wealth fund, targeting non-financial objectives such as development goals. However, the fund's classification as a sovereign wealth fund is contentious.

History

2020–2024: UK Infrastructure Bank

Following the United Kingdom's decision to leave the European Union, access to financing from the European Investment Bank (EIB) was expected to be lost. In July 2018, the National Infrastructure Commission, recommended that if access to EIB financing was lost, “a new, operationally independent, UK infrastructure finance institution should be established by 2021.”

Under the premiership of Boris Johnson, infrastructure emerged as a central focus of government policy. According to Anthony Seldon, “Johnson’s vision to transform Britain’s infrastructure was one of his animating spirits.” An infrastructure bank would become part of the government's levelling-up policy. The government also saw the bank as a way to enhance the quality of infrastructure projects undertaken by local government, and was intended increase the scrutiny of their investment proposals. Additionally, the bank was intended to help with the government's legal obligation to reach net-zero carbon by 2050.

In November 2020, Chancellor Rishi Sunak presented a spending review to parliament. The review specified the creation of a new national infrastructure bank in the north of England. The bank would invest in infrastructure alongside private investment. The bank would be given two strategic objectives. Firstly, to help tackle climate change. Secondly, to support economic growth.

Four months later, Chancellor Rishi Sunak presented the March 2021 budget to Parliament. The budget included further plans for the bank. The bank would be headquartered in Leeds, to support local growth and to help close the north–south divide. The new UK Infrastructure Bank was given initial capital amounting to £12bn, and was able to offer up to £10bn of government guarantees, with its final capacity being £22bn. In June 2021, the Leeds headquarters were opened, and in September, John Flint was appointed to be the first CEO.

In May 2022, the UK Infrastructure Bank Act was introduced to parliament. The bill intended to address concerns that the bank could be later sold off, like the Green Investment Group. The UK Infrastructure Bank Act stipulates that the bank must publicly publish annual reports, and present them to parliament. The UK Infrastructure Bank Act received royal assent in 2023. In January of that year, a Public Accounts Committee released a report analysing the bank's performance after its first 18 months in operation. The report concluded that while the UK Infrastructure Bank had made initial progress in deploying capital and piloting advisory functions, it faced significant challenges in recruitment, governance, and operational independence.

2024: National Wealth Fund

In September 2022, during a Labour Party conference, Shadow Chancellor Rachel Reeves introduced plans for a National Wealth Fund. The "National Wealth Fund Taskforce" was created to provide recommendations for the funds development.

Ahead of the July 2024 election, the Labour Party had pledged to launch a National Wealth Fund as part of their election manifesto. After winning the election, Chancellor Rachel Reeves announced plans to align the UK Infrastructure Bank and the British Business Bank under a new National Wealth Fund. The new fund would receive £7.3bn in funding. Shortly after, the National Wealth Fund Taskforce published their recommendations. One of the main recommendations was that the fund should be based inside an existing institution, such as the UK Infrastructure Bank.

In October 2024, the UK Infrastructure Bank became the National Wealth Fund. The mandate of the fund was expanded beyond infrastructure to include a wider industrial strategy. The fund was advised to work 'in close partnership' with the British Business Bank. The fund received a scaled back cash injection of £5.8bn. This was £1.5bn less than the £7.3bn initially planned.

See also

• Green Investment Group
• British Business Bank

References

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• HM Treasury
• Government-owned companies of the United Kingdom