A few days ago someone gave me a ‘map’ they’d put together of the close network of relationships and conflicts of interest that accompany some of the lending decisions of the Scottish National Investment Bank. I’ve been dwelling on how to present this to you since.
You know the kind of map – a diagram of all the players on the field, how they are related and where the money and the power flows from and where it flows to. It’s complicated and needs a lot of explaining, and at the same time you need the overall feel of what is going on without having to know about all the specifics. So I’ve decided that rather than throw a map diagram at you which won’t make that much sense it’ll work better if I walk you through it.
Don’t feel the need to actually absorb too much of the information in this. It’s purpose isn’t to highlight any single money flow, any individual person, any specific decision made or not made. Rather it’s to shine a light on how contemporary Scotland works and why you should be really suspicious about whether it’s really working for you.
It’s worth being clear from the outset that I am not alleging any illegality or any fraud in what follows. Each decision may, in and of itself, by justifiable. It is, however, also worth being clear that corruption does not even nearly require illegality. The most insidious corruption is legalised or at best conducted in grey areas of ‘not all illegal, definitely inappropriate’.
So here goes.
The Scottish National Investment Bank is supposed to act as a counterweight to the failures in the commercial banking and finance sector in Scotland, pushing public-good funding where the market isn’t providing it. What it is certainly not meant to be is an enrichment vehicle for the existing finance sector and their pals.
So to begin, the Chair of SNIB is Willie Watt. Watt is an Advisory Board Member of Scottish Equity Partners, a private sector Glasgow-based investment consortia which is already investing in projects into which SNIB is investing. This potentially means that SNIB is funnelling money towards investments known by its Chair where there is a clear risk of conflict of interests.
SNIB’s Chief Executive resigned for reasons no-one will tell us and her acting replacement Sarah Roughead had previously moved to SNIB as CFO directly from Scottish Equity Partners. Another person who is an Advisory Board Member of Scottish Equity Partners is Carolyn Jamieson. She is also a Non Executive Director of the Scottish National Investment Bank and was Chief Legal Officer at Skyscanner (more on that in a minute).
Scottish Equity Partners is a part of a system and another part of the system is Par Equity, an Edinburgh-based investment partnership. These organisations invest in companies like Swipii Ltd (we’ll come back to that too). Both also invest in forestry.
Paul Atkinson is a partner of Par Equity. He has strongly advocated investment in forestry and Par Equity has invested in a number of forestry projects, including Gresham Forestry. Gresham Forestry is a London-based investment consultancy which helps wealthy landowners maximise the investment value of their land through forestry. This has been pushing up prices of rural land, pricing out local people.
Gresham’s interests in Scotland are purely extractive – its forestry investments are in no sense in the public interest given the manner in which they’re made. And yet the Scottish National Investment Bank joined Scottish Equity Partners and Par Equity in investing in Gresham with a full £50 million investment. This increases the value of the private sector investments made.
It is worth being clear that corruption does not even nearly require illegality
Let’s move over to the Scottish Government for a second. In March 2021 Kate Forbes gave the Scottish Technology Ecosystem Review (STER), a team of five people, a total of £7 million for the year 2021 – 2022. That was started and overseen by Mark Logan and Stephen Ingledew (the final report is usually known as ‘the Logan Review’ and was pretty well received as government working group reports go).
In April 2022 Kate Forbes then gave the Scottish Technology Ecosystem Review Advisory Board, as part of entrepreneurial systems in Scotland, another £45 million to implement Mark Logan’s original STER Review and transform the sector. Stephen Ingledew was on the original five-person team that wrote the Logan Review and is also Co Chair of the STER Advisory Board with Kate Forbes MSP. It met first in June 2021 but there are no Minutes or meetings since which are in the public domain.
(Mostly) fine – that’s largely government policy (if very generously funded public policy). But the relationships then stretch beyond government policy-making into commerce. Because remember Swipii, the company that Par Equity invested in? Mark Logan is a Director. Sarah Ronald of Nile HQ, a design and investment consultancy, is also a syndicate investor for Par Equity which invested in Swipii – and she is also on the Advisory Board of STER with Mark Logan. Then again, she got her start working in Skyscanner where Mark Logan initially made his money.
Again, fine – this is all private sector money and if they all know each other, there you go. But Mark Logan is also a Director of TravelNest Ltd, a business which received £3 million of investment from the Scottish National Investment Bank in March 2022.
All of this falls under the remit of the Director General for Economy at the Scottish Government. This post was recently advertised (suffice to say this is arguably one of the most important if not the most important post in economic development in Scotland) – but no-one was interviewed for it. Instead the post went to Louise Macdonald.
Louise Macdonald does not have any economic development background. She is believed to be close to Nicola Sturgeon and that in turn is believed to be a factor behind her getting a post in the Institute of Directors, a post she has held for less than a year prior to being given the DG Economy role.
Prior to that her main experience was as Chief Executive of Young Scot (along with the usual set of insider public board memberships). In 2001 Young Scot was receiving about £750,000 of public funding. By the time McDonald left Young Scot was receiving £3.25 million of public funding.
I cannot emphasise this enough; a ruling class has been taking an increasingly firm grip over Scotland
I’m going to stop at this point. I have been trying hard to decide which bits of the information on the multifarious connections and pathways between all these players, companies and public bodies help to tell the story. I could have included probably about the same amount of information again – but it wouldn’t help you any more than this does.
I hope it perhaps lets you understand the way much of Scotland currently works. From the loans and investment made by the Scottish National Investment Bank so far it is pretty hard to devise what, if any, mission it is following.
It has made very few loans and the justification for some of them is hard to fathom (why giving £50 million to a London-based investment consultant for rich landlords is in the public interest is beyond me). But then if you conclude that the Scottish National Investment Bank is not really mission-driven at all but is rather being used by Scotland’s existing finance networks to help de-risk their own investments, it does make sense.
That the people who are handing out or receiving this public money are also deeply involved in writing and enacting public policy and that many of the people who are overseeing the whole affair all have links to the funds co-investing with the bank, or come from other routes which exist primarily because of governmental patronage should be of concern.
I have been trying to explain how government in Scotland has been re-orientated over the last ten years to act as a facilitator and funder of a tight network of vested commercial interests inside and outside the public sector. I’ve been trying to warn that this is deeply corrosive of the public good.
And it is, it really is. All of this breaks my heart because the Scottish National Investment Bank was devised and pushed by Common Weal. We were proposing it to fix problems in Scotland and at this point I now believe it is in reality acting to exacerbate those problems.
I cannot emphasise this enough; a ruling class has been taking an increasingly firm grip over Scotland. It’s politicians facilitate its financiers who capture a government willing to be captured. They merge into each other and a host of public and NGO sector agencies which, over the last 20 years, have become very major recipients of public money. Everyone’s salary just keeps on increasing as the money swills around between them.
I can really only finish like this; what I’ve done here I could do dozens upon dozens of times in dozens of different examples – steering groups made up of people who receive funding from the thing they are ‘steering’, agencies which exist only to recycle public money, boundaries between private interest and public interest which are entirely fluid.
Some of this can be dismissed as ‘small country syndrome’ – but it didn’t use to be this bad. My thesis remains that when Edinburgh’s global banking sector basically disappeared after the financial crisis, Scotland’s financial establishment decided to pivot to the PFI model which is to start to exploit, extract from and strip the public realm as it could no longer live on the crumbs from global banking.
It is causing problems everywhere – the privatised care model, the failures in ferry procurement, the cack-handed mess of managing ScotRail and much more can be traced back to problems of commercial interest getting in the way of public management. Or look at the appalling treatment of the community of Torry and the way it has come a distant second to powerful commercial interests.
These problems are eroding confidence in Scotland generally. People now think government in Scotland can’t organise a piss-up in a brewery. This is a misunderstanding. Government in Scotland can pull off a piss-up in a brewery by outsourcing it, but you won’t be invited.
Meanwhile actually delivering a coherent programme in the public interest? That it genuinely seems incapable of.