HM Treasury’s UK Infrastructure Bank has 44 potential future deals in the pipeline worth around £5 billion, according to a report by the National Audit Office (NAO).

However, the parliamentary body said that the bank is not yet fully operational and that it needs to manage a number of internal and external challenges to achieve the government’s aims for it.

The bank was launched in June last year to encourage private finance and public investment to help tackle climate change and support regional and local economic growth.

The bank, which was allocated £22 billion of public funds for the first five years to fund equity investments, loans, and guarantees to support infrastructure projects, has so far entered five deals amounting to £311.5 million.

But the NAO said that existing investments are similar to loans other parts of the government already make, so are not representative of the full range of investment the government hopes the bank will deliver.

Driven in part by the loss of the European Investment Bank infrastructure after leaving the EU, HM Treasury wanted to move quickly in opening the bank. Planning for the organisation took just 10 months; 14 months less than for the Green Investment Bank and the British Business Bank.

“The UK Infrastructure Bank was set up quickly, and there is more work to do before it is fully operational and is able to support the government’s aims in achieving net zero and supporting local economic growth,” said Gareth Davies, head of the NAO. “It should continue to improve how it assesses investment needs and evaluates its impact, so that it can ensure it is targeting investment where it is most needed and demonstrate it is using public money in the most effective and efficient way.”

Since its launch in 2021, staff numbers at the bank have increased from six to 127 as of April 2022. But it is still heavily reliant on interim, temporary and contract staff.

The NAO explained that a key element of the Bank’s governance needed to make it fully operational is the completion of the remaining Board committees.

This will only be complete when the non-executive directors, whose appointments were announced in June 2022, take up their posts.

The organisation said that HM Treasury has set high-level objectives for the bank, including a target of earning an annual return on equity of between 2.5 per cent and 4 per cent by 2025-26.

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