The UK government is preparing to provide an additional £20.4bn in funding to the National Wealth Fund (NWF) and British Business Bank (BBB), expanding state-backed financing for private businesses and infrastructure projects, according to a report by the Financial Times.
Chancellor John Healey is expected to announce the funding in the 28 October Budget, with the capital deployed over approximately five years to support investment in sectors including artificial intelligence, defence and renewable energy.
The NWF will reportedly receive £15.4bn, including £2bn earmarked for a new Energy Wealth Fund focused on renewable energy investment. The additional capital is intended to maintain the institution’s existing lending capacity through 2030–31.
The British Business Bank will reportedly receive a further £5bn, increasing its financial capacity from £25.6bn to £30.6bn. The funding will support its mandate to provide growth capital to UK businesses, including scale-ups seeking finance for expansion.
The Treasury estimates that the combined investment could create or support approximately 100,000 jobs by 2035.
The measures are reportedly expected to expand the availability of government-backed capital for businesses and infrastructure, creating opportunities for private investment alongside public financing.
The Treasury plans to finance the commitments through additional government borrowing, with funding for the NWF expected to begin in 2028–29.
Under the government’s fiscal framework, the borrowing is expected to remain neutral for public sector net financial liabilities, as the financial assets generated by the investments will offset the corresponding liabilities.
The announcement forms part of the government’s broader efforts to stimulate private sector investment and economic growth while maintaining fiscal discipline amid elevated borrowing costs.
