Budget 2016: northern power-what?

Northern businesses are left unimpressed despite Chancellor George Osborne's infrastructure updates and support for further devolution.

In a nod to the government’s plans for a robust northern powerhouse, George Osborne confirmed plans for the HS3, Crossrail 2 and further devolution of power. The northern business community, however, is less than impressed, calling for more investment in digital infrastructure beyond a 5G network.

“The government has once again expressed dedication to ending decades of slow northern growth with this Budget. However, while it is taking the initiative on developing transport infrastructure in regional cities, to make the northern powerhouse a reality, we still need more investment in digital framework, such as putting resources into heavy-duty networking capabilities to serve growing business hubs, or delivering on promises to install premium-grade broadband in business districts across the north,” stated Simon Acott, business and partner development director, Exponential-e. The homegrown cloud and IT services provider has offices in Manchester and Reading in addition to the nation’s capital.

“While Osborne acknowledged the imminent arrival of 5G technology will bring forward the government’s innovation proposals, there must targeted investment in digital northern infrastructure, which so far has remained largely theoretical,” he added.

For James Blake, CEO of the Manchester based big data analytics firm Hello Soda, the northern powerhouse extends beyond just infrastructural updates. “The north of England has already made huge strides in growing as hub for businesses. Now that we have a strong foundation, it’s vital that we build on the success to date to create a viable and sustainable economic future for the region.

“As a FinTech company, we’ve been told that we’d be better placed in London but we are passionate about the north of England. Our success to date in being a small Manchester start-up three years ago to now having a global presence and servicing businesses internationally is evidence of the potential the region offers,” he said, in support of Manchester’s growing tech scene.

>Read the budget speech in full

What about the midlands?

Budget announced that the British Business Bank will support £1 billion of finance for smaller business today, which includes the creation of the £250 million Midlands Engine Investment Fund (MEIF). In response, Keith Morgan, CEO of British Business Bank, said: “The region has 460,000 SMEs and the MEIF will make finance available to help them grow, with wider benefits for regional employment and prosperity.

“The MEIF will sit alongside the Northern Powerhouse Investment Fund in providing assistance to businesses outside London and the south east.  Overall this will help to increase the UK’s productivity, which remains one of the key challenges for the wider economy.”

Praseeda Nair

Praseeda Nair

Praseeda was Editor for GrowthBusiness.co.uk from 2016 to 2018.

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