3. What consideration did the Minister give to facilitating the creation of a community bank for Wales when formulating the Welsh Government's budget? OAQ54102

The Welsh Government supports the principle of establishing a community bank for Wales. The Welsh Government’s budget allocated resources to support new businesses. It will be for the Minister for the Economy and Transport to make any offer of seed funding to a community bank.

Thank you for your answer, Minister. Obviously, in January, you did say to me then that the Welsh Government was at some very early stages in discussions with a number of stakeholders who were keen to explore the feasibility of establishing a community bank. Last week, the First Minister reiterated that the Government was indeed working with partners who were also preparing a full market business plan. I would be grateful if you could give some detail in terms of what sums of money will be allocated from the Government's budget in terms of the creation of a community bank. The First Minister has said that he wants the community bank to be in place before the end of this Assembly term, which, of course, is less than two years away. And I'd also be grateful if you could perhaps provide your own assessment of what public subsidy you think would be required to set up the community bank for Wales, as is being outlined, and also if you are aware of any grant or loan that has been requested of the Government in terms of setting up the community bank for Wales.

Thank you for raising the community bank idea. Of course, we do support the principle of establishing a community bank, and developing this is a priority for us. By means of an update, the Welsh Government officials met, and the Development Bank of Wales met with potential stakeholders in the third sector and the private sector last year, including the Public Bank for Wales Action Group, and they're seeking to establish a community bank for Wales. We've provided advice on the process that would need to be followed in order to access seed funding.

Officials are now reviewing a specific proposal and a request for seed funding from the Public Bank for Wales Action Group, working in collaboration with the UK-wide Community Savings Bank Association. Seed funding would be used by the Public Bank for Wales Action Group to initiate a phase of work that would include stakeholder engagement, market assessment, and feasibility for a community bank for Wales, which will then progress to application for a banking licence. An application for a banking licence can take quite some time—two years or more, sometimes—in order to have the necessary work done with the Prudential Regulation Authority and the Financial Conduct Authority. But I think it is too early to identify just how much capital funding we would be putting towards that and what element of subsidy might be needed on an ongoing basis. But that is all part of the work that is going on, but as I say, it is quite early days in terms of the project being scoped and discussions taking place with stakeholders.