A Scottish National Investment Bank will be established to take a “new approach” on capital investment, the First Minister Nicola Sturgeon announced yesterday.

Outgoing Tesco Bank CEO Benny Higgins has been appointed to develop the Bank’s remit.

The commitment, which is part of the Programme for Government 2017-18, has been informed in part by advice from the Council of Economic Advisers (CEA) which highlighted the important role National Investment Banks play in providing long term investment to support economic growth in many European countries.

First Minister Nicola Sturgeon told MSPs: “A significant constraint faced by many businesses with growth potential is access to long term, patient capital.

“I can therefore announce today that we will begin work to establish a Scottish National Investment Bank.

“Benny Higgins, CEO of Tesco Bank has agreed to lead work on developing the Bank’s precise remit, governance, operating model and approach to managing financial risk.

“The Scottish Government has already taken steps to improve access to finance through, for example, the establishment of the Scottish Growth Scheme. However, if we are to succeed in raising our ambition, this is a challenge we must do more to address.

“We believe that the time is now right to take a new approach on capital investment.”

Mr Higgins said: “It is a privilege to be asked by the First Minister and the Scottish Government to lead the work on creating the Scottish National Investment Bank. It is vital that Scotland puts in place the right structure to develop long-term, sustainable growth for all aspects of the economy.”

Homes for Scotland and RICS Scotland both gave a “cautious welcome” to the proposals.

Homes for Scotland chief executive, Nicola Barclay, said: “With the number of new homes being built in Scotland flatlining, tackling our country’s housing crisis requires a broad approach that includes all market segments. The private sector has a huge role to play by not only helping to meet the aspiration of Scots to own their own home but also in relieving pressure on social housing.

“Key to the Scottish Government’s objectives will be its delivery of an effective planning system and the provision of the infrastructure that is needed to support development. We therefore cautiously welcome the announcement of a Scottish Investment Bank, however will need to see the detail on how it can facilitate this provision.

Gail Hunter, RICS director in Scotland, added: “There are many welcome aspects to this programme but, as ever, the devil will be in the detail when the Bills are presented.

“On this basis, RICS cautiously welcomes proposals to establish a Scottish National Investment Bank to support economic growth, diversification of housing delivery through self-build; and modernising Compulsory Purchase Orders.

“We also support the Scottish Government’s aim to introduce some of the recommendations from the Barclay review, such as the move to three-yearly revaluations from 2022 with valuations based on market conditions on a date one year prior and the increased support town centres will gain by expanding Fresh Start Relief.

“RICS will be undertaking an assessment of the recommendations next week and will look to inform Mr Mackay which recommendations will work, need adjusting before implementation, and which measures need further consideration.

“We also look forward to the highly-anticipated Planning Bill, which we hope will recognise and enhance the quality of Scotland’s planning system.”