The Scottish National Investment Bank has discovered a revolutionary business model: lose £138 million, then ask the government to pay for it. This is not a pivot. This is not a restructuring. This is the future of public investment, apparently.
The bank’s latest financial results show it backed several firms that collapsed last year. Rather than accept this as the natural consequence of backing several firms that were, it turns out, not viable, the institution is now reframing catastrophic failure as a bold new strategy. The grant application lands on ministers’ desks with language suggesting that losing other people’s money is actually a form of market research.
Why would a publicly-owned bank that operates independently need a government bailout to fund its losses? Because calling it a bailout would require admitting that the investment strategy was broken. Calling it a “grant to support innovative portfolio recalibration” sounds like something worth funding.
The bank was created to stimulate Scotland’s economy by investing in promising companies. It has instead become a case study in how to transform a mandate into a subsidy program. The next step is obvious: rebrand the losses as a pilot program, publish a whitepaper about “learning from market volatility,” and request a five-year grant to continue the experiment.
The government has not yet responded to the application. When it does, expect language about “supporting public institutions through transitional periods.” Translation: yes, we will pay for this.