Vision for Economic Growth — a roadmap to prosperity 25 Big move #3 In time it could also be worth exploring the creation of Benefits associated a New Generation Trust for future generations. In a As mentioned in Big move #2, there is a potential to Maximise the eectiveness of New Generation Trust, each child could receive a pot of unlock up to £75bn in pension capital between now and money at birth, say £1,000, that would be channelled 2030 if LGPS and DC schemes increase their allocations for long-term investments in the UK’s growth. The every pound of government support to unlisted equities. Strategic government investment investments themselves would be inaccessible until could help channel some of this capital into UK growth adulthood, when they would be automatically invested assets more quickly, and leverage in more private capital Government has limited capital. This is why it must be Key actions to address these dynamics include: in an individual savings account (ISA) or DC pension. In as well. deployed judiciously and its impact maximised. To do • Clarify how disparate funding schemes align to so doing, the government would be providing a source this, three dynamics need to be considered.strategic government priorities, to leverage in of long-term capital to UK businesses. It could also help Key actors (non-exhaustive) • Visibility on government’s long-term strategy maximum private capital. Government should to build an investment culture in the UK, by introducing HMT; relevant trade associations (including the ABI); more citizens to the concept of investment and its use as FPS stakeholders across the pensions value chain and policy priorities. Today, there is fragmented provide transparency around where public capital is part of a balanced long-term savings plan. (see Figure 8); BBB; UKIB; ARIA; UKRI; Innovate UK. signalling across a variety of bodies such as the committed or available, and how this maps across di昀昀erent agencies and strategies. Tracking 昀氀ows BBB, the UK Infrastructure Bank (UKIB), and the can provide demonstrable evidence to 昀椀rms about Advanced Research and Innovation Agency (ARIA). government priorities. Transparency can also instil Providing transparency around existing funding programmes would help potential investors con昀椀dence in the consistency and commitment of government policies over time, which in turn better understand the government’s key strategic priorities such as green energy, technology, and may encourage further private sector investment in key areas such as 昀椀nance to support the net life sciences. This can, in turn, encourage 昀椀rms zero transition. to invest themselves. There is also evidence that alignment of government interventions supports • Support 昀椀rms to identify suitable government better outcomes for innovation-led businesses. funding opportunities that will best suit their For example, the BBB and UKRI research highlighted needs. The government has a wealth of resources that “research council spinouts” with support from available for high-growth 昀椀rms, but early stage both Innovate UK and the Bank were four times as 昀椀rms often struggle to navigate di昀昀erent 昀椀nancing likely to have raised external 昀椀nance compared to vehicles across government and government-linked those who were not in subsequent receipt of BBB institutions. A government resource could help 昀椀rms 66 investment or Innovate UK R&D support.to search for the opportunities that would most • Access to funding opportunities. Some 昀椀rms 昀椀nd suit their needs. The “front-end” function could it challenging to access the fragmented landscape build on already existing tools, such as the BBB’s of public funding within the UK, or are unaware of Finance Hub, Innovate UK’s Innovation Hub, UKRIʼs Funding Finder and the Department for Business the opportunities available. Others do not have the 69 resources to pursue funding across multiple discrete and Tradeʼs (DBT) catalogue of funding sources. There should be a “product and institution-neutral” opportunities. Funding gaps can be particularly pronounced among female founders, or minority-advisory team and portal that would help 昀椀rms to navigate the di昀昀erent choices and options available owned businesses. For example, earlier this year to them. This visibility would have the added bene昀椀t the Treasury Select Committee concluded that it of marketing the wealth of opportunities for high- had received evidence that the UKʼs VC market was growth 昀椀rms in the UK, potentially increasing the “highly unrepresentative” of the gender and ethnic 67UK’s overall competitiveness. diversity in the UK. • Creation of investment vehicles to channel long-• Support the BBB as it tests proposals to open term capital. There is an opportunity to embrace its pipeline of growth company investment the potential impact of the Mansion House reforms opportunities to crowd in more investment. The BBB currently has over £15bn of capital mobilised to create investment vehicles that could provide a channel for long-term capital from pension funds. into more than 20,000 companies across the UK Some of these are already being developed by the through its commercial programmes alone. The BBB has announced its support for the Chancellor’s private sector. The BBB has also committed to 68 request to explore establishing a vehicle that could explore such a vehicle. receive third-party capital such as pension fund 70 investment. Government should continue to support the BBB in this endeavour.