At least two-thirds of SMEs within the UK believe that the government’s investments are predominantly London based and that actually the industrial strategy overlooks the rest of the UK.
The government do plan to boost the economy via regional encouragements for example, the Northern Powerhouse and the Midlands Engine Strategy however, they are not succeeding in making a good enough impression on UK SMEs according to the latest research taken from the SME confidence Tracker funded by Bibby Financial Services.
Taken from data for Q2 the tracker found that 66% of SMEs are not aware of the Midlands Engine Strategy while 43% have not heard of the Northern Powerhouse.
Research found that 32% of businesses within the North West, 25% in the North East and 31% in Yorkshire and Humberside have not come across the Northern Powerhouse even though the government have tried to push this across UK businesses. Figures soar in Midlands where 51% of those in the West and 56% of those in the East are not aware of the Midlands Powerhouse and the ways it can benefit businesses.
UK CEO of Bibby Financial Services, Edward Winterton comments;
“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.
“It is vital that SMEs in these regions see tangible benefits from the billions of pounds that have been earmarked, but this must start with awareness of the opportunities available to them and an understanding of how they can benefit.”
The Northern Powerhouse and the Midlands Engine both came from previous prime minister, David Cameron and chancellor, George Osborne they had plans to develop a more balanced economy by pushing regional growth. Plans have been tampered with due to Brexit and the snap general election.
When broken down by sector, research found that those businesses within the construction sector are the ones who are the least aware of the two investments in fact, 50% of the sector have never even heard of the Northern Powerhouse while 72% haven’t heard of the Midlands Engine.
Of those who are aware of the incentives their gut feeling is that when it comes to investment it is regionally favoured – more so to the larger cities. One third of SMEs who took part in the research believe that the Midlands Engine is focused too much on Birmingham while 40% believe the Northern Powerhouse is too concentrated on Manchester. Research also revealed that 66% of SMEs within the UK feel that there is too much investment in London compared with the rest of the country.
“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. Improving connectivity, investing in skills and development and creating the right environment for enterprise to thrive and grow are vital I supporting regional economies.
“While Brexit negotiations are clearly a priority for big and small businesses alike, it would be unwise for the government to neglect the regional strategies on which it once placed so much emphasis.
“Such measure proposed as part of the Industrial Strategy should not be side-tracked by Brexit negotiations but instead form part of these important discussions.”