Unlocking investment through cross-sector partnerships | Interview Insights
With the UK facing persistent investment challenges amid growing complexity and uncertainty, strengthening collaboration between government and industry is more important than ever. We recently spoke to John Flint, CEO of the National Wealth Fund, on how improved partnerships between the public and private sectors can drive investment and sustainable growth in the UK.
Why is cross-sector collaboration between the public and private sectors critical to drive investment and sustainable growth in the UK? What’s working well in terms of public-private sector collaboration to unlock investment?
Delivering the UK’s growth and clean energy ambitions isn’t easy. As the climate crisis becomes more acute and the need to boost growth, productivity and opportunity throughout the UK becomes ever more critical, the need for effective cross-sector collaboration between the public and private sectors is increasingly pertinent.
The National Wealth Fund is a problem-solving organisation, which is product agnostic and has no competitors. We exist to support and amplify the Government's policy and strategy, solving problems that, if left unchecked, will otherwise undermine or derail public policy. By looking at the role of public investment through this lens, it is easy to show how close public-private collaboration can deliver meaningful outcomes with impactful investments that complement rather than compete.
Private investors need confidence and clarity if they are to invest, and by acting as a bridge between public policy and private ambition, we can help facilitate that exchange. An attitude that says ‘we have no competitors’ also means that we will deliberately step away from transactions in instances where the private sector capacity is there. We have a growing number of case studies where we have scaled down commitments and even stepped back entirely because we were not needed.
Deploying public money is always a privilege, and that means adapting our approach and focus as needed to deliver maximum impact in pursuit of our objectives. When done right, effective public-private collaboration can be a powerful tool in enabling the conditions for sustainable growth.
What are the key barriers or challenges in aligning public and private sector investment priorities, and how can they be better addressed? How can the public and private sectors better align their goals to create a more sustainable investment ecosystem?
The stewards of private capital look to the public sector for stability and clarity to make confident and informed investment decisions. In turn, the public sector looks to private markets for their financial firepower to back innovative projects, support pioneering businesses and provide many of the investments that the UK needs to deliver its sustainable growth ambitions. When this relationship breaks down, growth, productivity and opportunity all suffer.
This is especially true as relates to net zero, a challenge shared across the public and private divide, and the investment required to meet our ambitious targets. The best opportunity to create jobs and deliver long-term sustainable growth will be through the transition, yet the status quo around investment needs to change. It requires a fundamental reset to expectations around risk and return.
The NWF and other public finance institutions are here partly to invest in projects that would otherwise not get off the ground, absorb risk and make projects viable for investors. But the public sector can’t do the heavy lifting alone. As things stand, I believe that growth outcomes in the UK are entirely consistent with our risk appetite. We want to catalyse better risk sharing and cross-sector collaboration between public and private investors to unlock the opportunities inherent in the net-zero transition.
How do you work with local authorities to ensure the alignment of infrastructure projects with long-term regional and national growth goals?
Collaboration with local authorities, government bodies and the private sector is vital to identifying infrastructure projects that can make a real difference to local communities. Local authorities have set ambitious targets to deliver infrastructure in support of net zero and regional and local economic growth. They act as project sponsors, work to crowd-in private investment and invest where there is limited market provision.
The key to unlocking long-term regional growth in all four corners of the UK is ensuring that local authorities have access to the investment expertise they need to develop an investible pipeline. We provide low-cost financial support and act as a critical friend through the provision of an impartial advisory service, helping local authorities understand and navigate the challenges and financing barriers they face in delivering critical infrastructure.
Ultimately, local leaders have the knowledge and vision for their communities. By supporting projects throughout the infrastructure lifecycle, we can help local authorities develop and realise their investment pipelines in support of their Local Growth Plans.
Originally published: