Why it is important: When we manage our programmes efficiently, we deliver value for money. All UK taxpayers benefit from our ability to deliver the most positive outcomes with the least amount of Government resources.
All our programmes, with the exception of the grant funding and operating costs element for Start-Up Loans, count towards our financial return target. The Bank targets achieving a return on capital at least equivalent to the Government’s medium term cost of capital. We have a target for the end of March 2019 of 2.525%.
The British Business Bank achieved a 2.0% return on capital employed in 2015-16, which was up on the 1.3% generated in 2014-15 and significantly higher than our target for the year. This rise was generated by lower operating costs and strong cost control across the Bank, a drop in expected losses from Start Up Loans due to improved credit performance, and a fall in the value of claims from EFG partners stemming from better underlying credit performance.