Member Article

FSB urges Gov to act on Northern Powerhouse as frustrations grow

Frustrations are rising from the business community over a perceived lack government of action in regards to the Northern Powerhouse.

Releasing a new report urging accelerated delivery of the initiative, the Federation of Small Businesses (FSB) representatives are leading the charge to demand less talk and more action.

‘An Entrepreneurial North’ highlights the benefits of moving to a pan-regional small business support model as part of the Northern Powerhouse project.

The two Local Enterprise Partnerships (LEPs) in the North East are receiving over £1 billion in the six years to 2021, with 55p in every £1 coming from European Union sources.

The report suggests that Government plans to bring together different funding streams into a single UK Shared Prosperity Fund (UKSPF) marks an opportunity to more effectively integrate small business support services across the north.

Also among asks are improvements to infrastructure in the North East and delivery of the Major Road Network.

Projects flagged as of particular importance include duelling the A1 north of Newcastle, increasing direct rail services from Sunderland and Middlesbrough and reducing air passenger duty. North-eastern airports currently carry higher costs than those in Scotland, hampering their attractiveness to inward investors.

Ted Salmon, FSB North East Regional Chairman, said: “Three years on from the first mention of the Northern Powerhouse and it’s still hard to find concrete manifestations of it.

“With a week to go until the Budget, we’d like to see the Chancellor take some meaningful steps towards getting the show on the road.

“We need cast iron guarantees about EU funding post-Brexit. Firms across the North East are benefitting from EU support to the tune of millions every year. One thing’s for sure, we won’t have a Northern Powerhouse unless that money’s replaced.

“Our LEPs and Growth Hubs are doing some fantastic work in supporting small firms across the region. However, we do have some challenges around awareness of what these bodies offer and duplication of services. Moving to a pan-regional model could help tackle these issues.

“The success of the Northern Powerhouse starts with having the right infrastructure in place. We need greater focus on the local road routes and rail lines that matter to small businesses. Headline-grabbing projects have their place, but incremental investment in small-scale projects would provide a bigger boost to productivity over the long term.”

The new report also recommends the creation of a Council of the North with responsibility for overseeing integration of regional activity and scrutiny of metro mayors. The installation of a People of the North body is suggested as a means to tackling skills shortages in the region.

A previously unreleased survey conducted by FSB members in the north of England shows that, when asked which improvements associated with the Northern Powerhouse would significantly benefit their firms, small business owners most frequently identify better broadband (56%), better small business support (52%), lower business rates (51%), improved road infrastructure (51%) and enhanced mobile coverage (49%).

Ted Salmon added: “With LEPs, local authorities and metro mayors all working together to deliver the Northern Powerhouse, it makes sense to have a Council of the North to advise on pan-regional activity.

“We have some significant skills gaps across the North East. Given that one in five UK small business employers relies on EU workers, there is a chance Brexit could exacerbate this issue. A dedicated body responsible for upskilling the north will help mitigate that risk.

“Above all we need to move towards a situation where people stop paying lip service to the Northern Powerhouse and start delivering the enhanced connectivity, improved infrastructure and integrated business support we were promised three years ago.”