North West views: Mercia Fund Management’s Mark Payton on the Northern Powerhouse

With the government’s vision of creating a Northern Powerhouse commanding the attention of the North West business community, particularly in the wake of the UK Northern Powerhouse International Conference & Exhibition, at Bdaily we’ve decided to run a new series of interviews to establish just what the region’s business leaders think of the plans.

Is the North West set for an overhaul in the coming years – one to turn the region into a true example of economic empowerment through business growth, job creation and prosperity?

Today we caught up with Mark Payton, the managing director and CIO of tech investor Mercia Fund Management.

What does the Northern Powerhouse mean to you?

The Northern Powerhouse is the bringing together of disparate opportunities and unifying them to create a stronger, more effective economy. Infrastructure and access to finance improvements can lead to connected resources and expertise

So the Northern Powerhouse to me is about unification, it’s about helping our regions communicate, which means marked improvements to transport infrastructure, connected communities and leveraging cross-regional resources such as access to capital and expertise within academic (universities) and the business community thus supporting young and growing businesses alike

That’s what the Northern Powerhouse means - bringing all those pieces together.

Are there signs of the Northern Powerhouse starting to bear fruit in the region?

Absolutely. It’s the reason we made a big push into the North with the acquisition of Enterprise Ventures last month. We’re not coming into the North and hoping we can create something, as it’s already here.

There are a fantastic number of universities here, as well as incubators and startups, and digital in particular is becoming quite vibrant. So there is a startup community here and the combination of Mercia and Enterprise Ventures results in a much larger, stronger group which means that we can drive growth further and faster.

Has the government done enough to convince you of its commitment to Osborne’s vision?

The rhetoric is good, but of course we’re always awaiting the delivery of the rhetoric. For us, two things are especially important. Firstly, there are the funds associated with the Northern Powerhouse, the £300m to £400m will be delivered for young businesses and those firms seeking growth capital. Our expectation is that this will be put out into the market in the coming months, although it hasn’t come yet and it’s been in discussion for a long time.

Secondly, there’s the discussion on HS2 and HS3. We actually think HS3, connecting across the country rather than down into London, is a much more relevant intervention than HS2.

To me, positive delivery both of the funds and HS3 will show that there’s something behind the rhetoric.

Transport improvement is intrinsic to the Northern Powerhouse. Do you believe that spending billions on infrastructure will improve Northern productivity?

My view is that 20 or 30 minutes off the journey time to London from the North isn’t worth the investment. But crossing the North at the moment is really challenging, so there’s a real need and desire for HS3.

HS2 is questionable though. It’s difficult to justify the return on investment.

Are there any other areas which you believe money should be spent on, ahead of transport?

If you can bring in the finance through large funds and increase connectivity across the North, the rest of the plans will happen - you just need a framework that encourages the private sector to come in.

Really there should be public sector infrastructure and framework, and that will facilitate the private sector.

While Manchester is a key city in the government’s vision, do you think enough is being done to cater for other important North West towns and cities?

I think Manchester’s a fantastic city, but there are some great opportunities in the regions that are currently lacking attention. This comes back to my point about connectivity across the North and providing a suite of investment funds that support businesses all over and not just in Manchester, Liverpool or Leeds. We need to make sure that that happens - that those investment interventions are delivered across the North of England.

The city of Manchester is considered the heart of the North in many respects, but we look to the regions around the city and that’s where we find some of the most exciting opportunities, in places like Burnley and Newton Le Willows. The Northern Powerhouse Fund will be critical in driving regional development in these places, so we eagerly await news of its development.

For all our latest Northern Powerhouse news and views, click here. Share your views and get involved with our latest interview series by contacting North West editor Richard at richard.bell@bdaily.co.uk