The Northern Powerhouse Opportunity

Last year, chancellor George Osborne announced during a speech at Manchester’s Museum of Science of Industry that the country “needed a Northern Powerhouse”. It would see the major cities across the north of England join forces to rival the might of London and the south east. "A collection of northern cities sufficiently close to each other”, Osborne added, “that combined they can take on the world."

Since that day, there have been countless speeches by the chancellor and other Government ministers promoting the Northern Powerhouse, with the term now firmly entrenched in the political lexicon. But despite a general consensus that the north-south economic balance needs to be redressed, many businesses – especially SMEs – aren’t aware of the opportunities the Northern Powerhouse could bring.

In a nutshell, the Northern Powerhouse aims to boost economic growth across the north by improving transport links, investing in science and innovation and devolving political powers through ‘city deals’ and local enterprise partnerships (LEPs). High profile projects include the £61m National Graphene Institute in Manchester and the High Speed 3 (HS3) rail link connecting Liverpool to Hull via Manchester and Leeds, with many more in the pipeline.

It’s obviously a long-term plan, but SMEs will eventually reap the benefits of the Northern Powerhouse. For example, HS3 will facilitate smoother business links and partnerships between companies across the north and devolution will help to determine local economic priorities rather than being dictated by central policy, with elected mayors able to act as figureheads and champions of their respective towns and cities. 

Clearly the Northern Powerhouse is a huge opportunity for SMEs in the north and in the absence of finance from banks or LEPs, debt capital investments such as ours will become increasingly important for those businesses that are looking to enter the next phase of growth. 

In fact, we are already working with ambitious regional SMEs that are currently under-served in private debt financing, providing them with investments of between £2m - £20m to support their strategic growth plans. Our base in Manchester, right at the heart of the Northern Powerhouse, gives us the geographical proximity we need to establish relationships with nearby businesses and their advisors and close deals much quicker than London-based alternatives. 

Looking ahead, the Government is continuing to back its Northern Powerhouse plans. The recent visit of Chinese president Xi Jinping to Manchester was clearly an ‘open for business’ sign to foreign investors, with the unveiling of direct flights to Beijing set to position the north at the centre of the UK’s global trade links. 

To find out how our flexible debt capital can support your business, please call Gary Davison on 07771893473 or email gdavison@toscafund.com