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In a strategic shift, ministers are directing the British Business Bank (BBB) to concentrate its lending efforts on small businesses within high growth sectors to align with the government’s new industrial strategy. The BBB, which functions as the government’s economic development bank, has been tasked with focusing on eight sectors designated in the industrial strategy. This initiative is part of Chancellor Rachel Reeves’ efforts to drive economic growth.
Officials familiar with the plan referenced a recent speech by Culture Secretary Lisa Nandy, where it was announced that the BBB, which facilitates over £17 billion in finance for smaller businesses, would enhance its support for the creative industries. The creative sector is among the eight high growth sectors included in the industrial strategy, alongside advanced manufacturing, clean energy, defense, digital and technology, financial services, life sciences, and professional and business services.
Nandy stated that the BBB is committed to expanding its support for the creative industries, emphasizing the importance of reporting on its investments to demonstrate tangible impact. An official involved with the industrial strategy, which is slated for release in June, indicated that Nandy’s comments could be applied to other sectors identified within the strategy.
While the BBB will continue funding promising small businesses outside these priority sectors, ministers aim to channel its resources towards industries believed to be pivotal for the UK’s economic future. A recent report by the Centre for Cities think tank recommended that the government focus on regions with clusters of companies in high-value export sectors, such as AI, advanced materials, fintech, and life sciences.
Established in 2014 under the Conservative-Liberal Democrat coalition, the BBB aims to stimulate sustainable growth and facilitate finance accessibility for smaller businesses. With government ownership, ministers approve the bank’s business plan, although the BBB operates independently in selecting businesses to support.
The British Business Bank expressed its support for the government’s industrial strategy, emphasizing its commitment to fostering investment in high-growth sectors with innovation potential, such as life sciences, clean energy, creative industries, financial services, and digital and technology.
Chancellor Reeves intends to unveil proposals for each sector prior to the official publication of the industrial strategy. She underscored the urgency of the matter, revealing that she had already met with bank leaders to discuss a financial services strategy earlier in the month.