Ensuring that businesses critical to achieving our industrial policy are supported

Key points:

  • In addition to providing access to finance products that help businesses to grow, we will consider investing in, providing loans, or other support to businesses that are key to our economy
  • Circumstances where the Scottish Government provides support may include where there is a threat to critical public services or a long term strategic asset at risk
  • Support will be considered only following robust due diligence and decisions will be made on the individual case’s merits, including contribution to the National Performance Framework
  • Any investment or loan will adopt a market economy investor principle and align with regulations on State aid

The Scottish Government provides support to businesses through loans, guarantees and other support each year. This support is only offered following searching questions about the business case, due diligence, benefits, affordability and risks. We will continue to invest in Scotland’s industries in line with our active industrial policy, our medium-term financial strategy and our economic strategy and its supporting action plans. Many businesses face challenges, and most overcome these with support from their bankers and from changes to their structure. We expect this to continue to be the case for the vast majority of businesses in Scotland. Where a business faces difficulties that cannot be addressed by a market response, and the business is critical to our economy, or is a long term strategic asset, we will consider options for support. Scottish Government support will only be provided on a case by case basis and following detailed due diligence. Should financial support be offered, this will meet the tests for State aid and will be on the same basis as a commercial investor. That includes details such as the amount of the investment, the expected return and the duration over which the lending takes place. Issues which will be considered in the appraisal of support options may include:

  • local and central Government’s hard or soft levers to influence a market response;
  • contribution to the wider National Performance Framework;
  • continuity of provision of service/ product;
  • complexity and time to implement any option;
  • market stability;
  • taxpayer value;
  • State aid and other relevant law; and
  • how Government intervention can be leveraged to change behaviours to increase both entity and market sustainability “