Business development · 2 February 2016

Northern Powerhouse: Half the North’s small firms doubt concept

The Northern Powerhouse policy aims to redistribute economic growth
Only half of small business owners in the North of England believe the government’s Northern Powerhouse concept will have a positive impact on business prospects, with 16 per cent still in need of persuasion about the idea’s benefits.

New research conducted by the Federation of Small Businesses (FSB) showed very high levels of awareness of the Northern Powerhouse initiative amongst the North’s small businesses, with 93 per cent claiming to be aware of it. However just over a fifth of firms said they were not clear about what the concept would mean in practice, indicating that the government should be doing more.

The research found that a greater level of local control over spending was the top priority for businesses looking to gain from the Northern Powerhouse concept, with 40 per cent of business owners citing it as their main wish. Government investment in digital infrastructure, transport links between cities and investment in workplace skills and training were also considered key priorities.

Policy director at the FSB, Mike Cherry, said: Continued support for the concept of the Northern Powerhouse from the business community will depend on delivery of these priorities.

the way local authorities invest must reflect the priorities of local job-creating entrepreneurs. Businesses want the ongoing political discussions about devolving powers to translate into real investment in the infrastructure Northern businesses need.

Small firms are less supportive of proposals to give local authorities tax setting powers, with just 16 per cent of owners backing the idea.

First proposed in 2014 by the chancellor, George Osborne, details of the government’s Northern Powerhouse initiative were further fleshed out in the latest Autumn Statement in November. By devolving greater power to local authorities and by better connecting cities such as Manchester, Liverpool, Hull, Leeds and Sheffield, the initiative aims to push economic growth outside of London and the South East.



Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

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