HM Treasury
The Chancellor has announced the creation of a new government-owned company, UK Government Investments (UKGI), as part of the governments plan to deliver the biggest ever sale of publicly-owned corporate and financial assets in 2015-16, exceeding 23 billion in real terms for the first time.
Speaking at the CBI annual dinner, the Chancellor said that the two bodies that currently manage most of the taxpayer stakes in businesses across the economy - the Shareholder Executive (ShEx) and UK Financial Investments (UKFI) - are to be brought together under a single holding company.
The new company, UKGI, will make it easier for government experts to work together in order to deliver a key part of the governments long term plan the sale of a wide range of publicly-owned assets in a way that secures good value for money for taxpayers. These will include sale of shares in Lloyds Banking Group, UK Asset Resolution assets, Eurostar and the pre-2012 income contingent repayment student loan book.
The new company will also help the government achieve its aim to run large, publicly-owned delivery bodies more efficiently, as well as learn from private sector expertise to improve the performance of those taxpayer-owned assets not being sold.
Chancellor of the Exchequer, George Osborne said:
If we want a more productive economy, lets get the government out of the business of owning great chunks of our banking system and indeed other assets that should be in the private sector. To help that happen I can tell you that were merging UK Financial Investments and the Shareholder Executive into one organisation, to return government investments back to the private sector.
UKGI will be a government company or GovCo which will be wholly owned by HM Treasury.
It will operate through two divisions; the UKFI division will be the existing UKFI company (with its current board, articles and framework agreement) and made a subsidiary of UKGI. It will continue to operate at arms length.
ShEx will not be incorporated into a separate company but instead will operate as a division of UKGI, overseen by an advisory board and will continue to work on corporate finance and governance issues across government.
The two divisions will continue to operate under the names of ShEx and UKFI, which are well-known to their customers and key contacts, but will have common IT and other operating platforms, as well as being co-located, in order to save money and increase efficiency.
UKGIs board will be chaired by Robert Swannell, with James Leigh-Pemberton serving as Executive deputy chairman and continuing to lead UKFI full-time.
Mark Russell with be the companys new Chief Executive Officer, with other board members coming from the existing ShEx and UKFI boards.
The transition to the new company will take place over the coming months, with the aim that it is fully up and running in Autumn 2015.
The previous highs for sales of publicly-owned corporate and financial assets were in 1991 and 1987 (22.8 billion and 22.9 billion respectively in 2015 prices). In cash terms the previous high was 1991 at 11.8 billion.