Edward Winterton

Are SMEs aware of the Northern Powerhouse and Midlands Engine?

Regional initiatives such as the Northern Powerhouse and Midlands Engine are failing to make an impact on UK SMEs, according to the SME Confidence Tracker from Bibby Financial Services (BFS).

Data for Q2 2017 revealed that two-thirds (66%) of UK SMEs were unaware of the Midlands Engine, while 43% were not aware of the Northern Powerhouse.

Just under a third (32%) of businesses in the North West, a quarter (25%) in the North East and 31% in Yorkshire and Humberside had never heard of the Northern Powerhouse.

The Midlands produced even worse results as just over half of SMEs in the West (51%) and East Midlands (56%) were unaware of the Midlands Engine or how it might benefit them.

The two initiatives were introduced by the Conservative government – under the leadership of the then prime minister David Cameron – with the aim of creating a more balanced economy by driving regional growth. 

However, they have hit various bumps in the road due to political change brought about by both the EU referendum and general elections in 2015 and 2017.

The construction sector was the least aware of either initiative: 50% of construction SMEs had never heard of the Northern Powerhouse, while 72% were unaware of the Midlands Engine. 

A third of UK SMEs thought that the Midlands Engine was too focused on Birmingham, while 40% believed the Northern Powerhouse was too centred around Manchester.

A large number of SMEs across the country (66%) believed that there was too much investment into London compared with the rest of the UK.

Edward Winterton, UK CEO at Bibby Financial Services (pictured above), said: “Measures that aim to close the economic gap between the rest of the country and the South can only be a good thing.

“For this reason, there has been much hope placed on the Midlands Engine and Northern Powerhouse strategies to drive regional economies through focused investment and skills development.

“Such strategies, however, are currently on unsteady ground. 

“Over a quarter of SMEs in the North are unaware of the Northern Powerhouse and more than half of those in the Midlands have not heard of the Midlands Engine.

“This demonstrates a distinct lack of awareness from small- and medium-sized businesses the government wishes to benefit.

“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."


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    Glenn Blackman

    Not surprised to hear that so few companies are aware of the funding options that are available. FundInvoice.co.uk launched its own #IFaware campaign, to promote invoice finance as an option for SMEs, after finding that 1 in 3 were not aware of invoice finance as a funding option for their business, despite being eligible. We also found that within the construction sector, where the majority raise applications for payment, almost half of them are unaware that they can get part payment against them immediately.

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