The chancellor’s pet PuFins have an important role – but they need more scrutiny | Nils Pratley
An Office for Budget Responsibility for public financial institutions like the National Wealth Fund and the British Business Bank is starting to look essential Two winners in the budget are known already. They are the National Wealth Fund (NWF) and the British Business Bank (BBB), state-funded investment bodies that have rapidly become central to the government’s growth strategy. Former…
The Office for Budget Responsibility (OBR) is proposing the creation of an Office for public financial institutions (PuFins) to provide scrutiny for state-funded investment bodies like the National Wealth Fund (NWF) and the British Business Bank (BBB). These institutions, such as the NWF and BBB, have become increasingly central to the government's growth strategy, receiving substantial funding from the Chancellor.
The NWF is set to receive £15.4bn over the next five years, while the BBB will receive £5bn. Supporters argue that these institutions can create over 100,000 jobs by investing in private sector assets, generating profits for taxpayers or matching government borrowing costs. However, critics question whether the Chancellor is circumventing fiscal rules by netting off the value of financial assets against public debt.
There are concerns about the potential overuse of PuFins, as they are meant to bring additional financial resources, not substitute private capital. Policymakers argue that assessing additionality is an exercise in judgment, and an OBR-style body could help ensure that PuFins stay within their intended role, providing essential oversight.
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