8. What the Bank should do (Question 5)
This section discusses respondents' views on whether the Bank should focus solely on finance provision or if it should broaden its remit to include tailored financial advice and support. Respondents were asked to consider "Bearing in mind the likely resource cost, should the Bank:
- Focus on solely providing financing
- Provide advice and support to assist entities/projects in becoming 'funding ready'
- Provide ongoing advice and support to entities/projects which it has supported".
Respondents were invited to select one or more answers from the pre-populated suggestions and were given the opportunity to state the rationale for their choice.
A total of 365 responses (91%) were received with answers to one or more parts of this question. 306 respondents (84%) also provided additional narrative within the commentary box, but just 248 (81%) were considered valid. Within the narrative, several respondents noted that they could have chosen more than one answer. This could indicate that whilst the majority of respondents understood the extent of the question, some did not understand that the question sought to determine whether advice and support should be offered in addition to finance.
Overview of responses
The preferred option selected by 43% of respondents is for the Bank to "provide on-going advice and support to the entities and/or projects which it has supported", followed by the Bank providing "advice and support to assist entities and/or projects in becoming funding ready" selected by 35%. The option of focussing only on provision of finance was the least popular, with 22% of respondents selecting this option.
Several respondents voiced confusion over the relative nature of this question, commenting that they could, or in fact did, select all three options. Other respondents noted that options two and three worked particularly well together and that advice and support should be provided to both those entities/projects to become funding ready but also those which have been assisted previously. Because of this, the number of responses exceeds the number of respondents in this question. The responses are illustrated below:
Figure 4: Question 5 Responses
Source: Consultation Hub
A Bank which offers advice and support in addition to financing
The view of many respondents was that the Bank should incorporate an advice and support function in addition to financing. 43% of responses noted that the Bank should "provide ongoing advice and support to entities/projects in which it has supported", while 35% of responses considered that the Bank should "provide advice and support to entities/projects in becoming funding ready". Respondents in general expressed that, often, there is little point in organisations obtaining investment if they can't access it and make it work for their businesses, indicating a role for the Bank in creating and stimulating demand.
Some respondents noted that advice was not just required for start-ups, but should be available for organisations at all stages of the business cycle. In addition, some found that support should be available over the longer term which would lead to greater accountability and trust across the public and private sectors. Furthermore, it was noted that effective advice and support could act as an incentive to entrepreneurs and start-ups in the future.
Some respondents also expressed the importance of greater learning and knowledge share opportunities within the local business environment and the possibility of the Bank providing a facilitation role in this area. Providing support specifically within the fundamentals of investment, like the development of business cases, was expressed to have particular value in supporting SMEs in accessing finance.
As above, it was noted that there are already a number of organisations providing advice and that careful consideration must take place to identify whether this is something which the Bank should do alone or whether the Bank could work within the existing parameters of the current landscape and align the offering.
A Bank which focuses solely on financing
The alternative view expressed by 23% of responses was that the Bank should focus solely on financing, rather than dilute its offering by providing support and advice. Many remarked that there are already plenty of organisations providing advice, e.g. Local authorities, Business Gateway, Scottish Enterprise, and Highlands & Islands Enterprise among others who provide a suitable service and, therefore, that investment and financing provision should be the priority. In addition, some respondents including Zero Waste Scotland, Business Scotland, the Glasgow Labour Party, the South of Scotland Alliance and a small number of individuals, noted that some form of formal collaboration or partnership should be established between the Bank and existing support agencies. This would reduce the likelihood of functions being duplicated and enlarge the support networks available to Scottish businesses.
Further, a small number considered that the current landscape was already too cluttered and that adding further complexities through the role of the Bank would be counterproductive.
A Bank which focuses solely on advice and support
This question also highlighted that two respondents (0.5%) expressed the view that the Bank should not provide financing and instead only act in an advisory capacity.
A balanced proposition would be the preferred option
Several respondents concluded through the qualitative section that a balance is required in order to harness the true potential of the Bank. They recognised that an effective balance would ensure money could be used effectively and to lever in as much private sector contributions as possible.
Several respondents frequently made reference to the importance of both financing and advice and support in the need to make the Bank sustainable in both the short term and the longer term.
This section highlights that the majority of respondents were of the view that the Bank should offer advice and support in addition to financing to harness the true potential of the Bank. However, there is a recognition that in the provision of advice and support, the Bank must work to be coherent with the existing players doing this already.