Northern businesses are highly confident about the future despite the uncertainty of Brexit, according to a report issued by international law firm CMS. In the survey, entitled Corporate North, we revealed that 89% of surveyed businesses say they are positive about the growth prospects of the Northern Powerhouse.
Nearly four out of five of surveyed businesses were equally positive about their own growth prospects, with 79% describing themselves as fairly or strongly positive. Two thirds of respondents plan to recruit new staff in the next six months.
Northern business leaders cited the magnetism of the region’s cities and towns as a key part of the attractiveness of doing business in the north. A strong sense of place offering a high quality of life was seen as one of the North’s key selling points, alongside high quality people, strong skills and work ethic and overall affordability compared to the South and South East.
This is all good news, of course, and to be welcomed. But respondents also raised a number of challenges which need to be overcome before the much-discussed Northern Powerhouse is to be shunted from concept to reality. Front and centre is the issue of connectivity.
Transport links and connectivity have been a defining feature of the Northern Powerhouse concept since its inception, and a key part of the narrative about the development of the North. While progress has been made and the government’s recent announcement of a funding boost of £436m to improve transport connections within northern city regions through the Transforming Cities Fund is to be welcomed, lingering concerns about the slow progress of HS2 and the desire for the Northern Powerhouse Rail (HS3) stifled optimism, and barely a day goes by without reports of northern commuters being affected by transport disruptions.
Interestingly, Corporate North showed that a NPR/HS3 project was considered the most important pending transport project for the North by a huge margin. 42% of respondents opted for NPR/HS3, compared to only 4% who wanted to prioritise HS2.
Other key factors and recommendations identified in Corporate North were:
• Increased skills investment, both from business and Government;
• Further devolution of powers and spending from central Government to the regions;
• The need for businesses to play their part, driving growth, investing in their futures and making themselves heard, and
• Pan-north collaboration, at scale. This involves collaboration between business, LEPs, city regions, central government and even overseas investment agencies.
These last two points are important. While respondents were positive about the Northern Powerhouse initiative, particularly in the way it has helped put the region on the map, there was an implied impatience with the progress made to date. 76% of respondents said the Northern Powerhouse was “a start, but needed to move forward and deliver.” It is time for Northern Powerhouse to move beyond conferences and slogans, and deliver more tangible benefits.
Northern businesses have a vital role to play in pushing this forward; to make it happen themselves. While it is easy to be confused about the Government’s commitment to the Northern Powerhouse concept (particularly when a former Minister for Northern Powerhouse was revealed as having spent only 90% of his time in the role in London, and when 282 Northern Powerhouse civil servants based in Sheffield were relocated to London), this confusion mustn’t be allowed to turn into cynicism or apathy. On the contrary, it should be a prompt for the North to push faster and harder itself. All regions of the North must work closely together and adopt a ‘One North’ approach to achieving the Northern Powerhouse vision.
The North of England is an excellent place to do business – we all know that. Home to 15m people, an economy worth close to £330bn (which would make it the ninth largest European economy if it was a country, ahead of Belgium, Sweden, Austria, Norway and Denmark), and responsible for 19% of all the UK’s exports thanks to its seven international airports and 12 major ports.
It is also becoming a centre of innovation. The North generate a third of the UK’s total renewable electricity and exported £7.3bn of pharmaceutical products in 2015. It is also home to seven of the UK’s 27 key tech clusters, and is rapidly developing a reputation as a hotbed for key future industries like digital, biotech and advanced manufacturing. It is perhaps appropriate that the home of the first industrial revolution is playing a significant role in the fourth industrial revolution also.
There is much to be proud of in the North, and our business dynamism is part of that. Corporate North paints a picture of a forward-thinking, confident business community in this part of the world. The challenge now is to build on that confidence, and work hard across the various stakeholders in the North and with Central Government to make the Northern Powerhouse vision a reality.
CMS’s Corporate North report is available for download free here.
About the author
Howard Gill is a partner in CMS’s Corporate group, heading the Corporate team in Manchester. He specialises in UK and multi-jurisdictional corporate finance, fundraisings, public and private M&A, joint ventures and corporate governance. Howard has a particular focus on the Real Estate and Hotels sectors.
Tel: 0161 393 4736
November 29th, 2018