Regional initiatives to boost industry in the North of England and the Midlands have so far failed to cut through to small business owners across the UK, according to new research.
A nationwide survey of founders, undertaken by Bibby Financial Services (BFS), uncovered significantly low awareness of the government’s flagship regional schemes, with the concept of a Midlands Engine particularly struggling to establish itself. Some two-thirds of owners in Britain had not heard of the initiative.
Even across the Midlands, over half of founders were unaware of how they could expect to benefit from investment schemes.
A £250m Midlands Engine Investment Fund was announced in the 2016 Spring Budget, but has since suffered a number of setbacks. Most recently, it was revealed that just 60 per cent of the money will be allocated to small business owners.
Now, the government-backed British Business Bank (BBB), financing the fund, has confirmed applications for the remaining budget will open in August.
Meanwhile, the Northern Powerhouse has also struggled to take off. Despite finance and development schemes already in place, almost half of owners were unaware of the concept.
The two regional initiatives were key hallmarks of the Conservative government led by David Cameron and George Osbourne. Policy makers pledged to engage with business owners across both regions to deliver tailored strategies to support enterprise, but many local entrepreneurs still appeared unconsulted.
According to the research, a third of founders in the North West, a quarter in the North East and almost a third in Yorkshire and Humberside and never heard of the Northern Powerhouse.
Commenting on the findings, Edward Winterton, UK CEO of BFS, said development strategies were crucial in driving regional economies and closing the UK’s investment gaps.
“Such strategies, however, are currently on unsteady ground,” he added, warning of the lack of awareness from those the government has tried to target.
“It is vital that [business owners] in these regions see tangible benefits from the billions of pounds that have been earmarked, but this must start with awareness of the opportunities available to them and an understanding of how they can benefit.”
Of business owners aware of both regional strategies, there was an indication that those outside of major cities felt underrepresented.
Some 40 per cent of founders in the North of England felt the Northern Powerhouse was too focused on Manchester. This sentiment was also reflected in the perception of London. Two-thirds across the UK felt investment was too heavily weighted in favour of the capital.
Winterton added: “The UK very much remains a London-centric economy, but we must redress the balance if we are to create an economy that works for everyone across the country.
“Improving connectivity, investing in skills and development and creating the right environment for enterprise to thrive and grow are vital in supporting regional economies.
In February 2017, BBB announced the launch of the Northern Powerhouse Investment Fund, offering startups and growing companies in the region access to loans of up to £750,000.
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