More than 6,000 new high quality jobs have been created through the Northern Powerhouse Investment Fund since its launch five years ago, new data shows.
Since its launch in 2017, the Northern Powerhouse Investment Fund (NPIF) has made 1,324 investments into 983 companies totalling £318m to the end of January 2022. The Fund has also generated an additional £437m in private sector leverage, boosting the overall impact on Northern SMEs.
A new report by independent research company SQW has also analysed the impact of NPIF – which provides equity, debt and microfinance to businesses in the North West, Yorkshire and Humber, and Tees Valley regions – demonstrating how the fund has increased productivity, employment and skills across the North.
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The analysis surveyed 274 SMEs that have benefited from NPIF funding, revealing how 73% had increased workforce skills, and 62% had reported additional investment in research and development. In addition, 6,071 new high-quality jobs have been created through the fund, almost 1,000 more than originally planned.
Research shows that for 68% of surveyed businesses, the NPIF investment had funded the development of new products or services. Of these, 48% said their innovations would reduce carbon emissions, 52% said that they would lead to broader environmental benefits, and 42% said they would improve health or the delivery of health services.
NPIF investment also led to increased business resilience for 92% of businesses, and 87% said that they had greater confidence in their ability to raise finance from private sector sources in future.
Some 45% of businesses also went on to secure follow-on funding from sources other than NPIF, totalling over £63m – or an average of £540,000 per firm. Meanwhile, 86% of equity recipients saw an increase in their company valuation.
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Of the firms surveyed, 74% saw an increase in sales with the help of NPIF funding, and the investment encouraged 36% of respondents to keep their business in the North.
NPIF has also been promoting diversity in business leadership with 71% of NPIF-funded businesses having mixed gender senior management teams.
Manchester-based developer and software provider to the legal sector Summize completed a £1m funding round led by NPIF – Maven Equity Finance in December 2020 and used the funding to invest in its talent and products. It has since gone on to grow its team by over 80%.
Castings Technology International (Cti) secured a £2m fundraising round led by Nucleus Commercial Finance and NPIF – Mercia Debt Finance. Based in Rotherham, the manufacturing and technology business has expanded rapidly, investing further into product development, sales and marketing.
Meanwhile, Tees Valley utilities firm Everflow secured a £750,000 investment from NPIF – FW Capital Debt Finance in April 2021 and has since grown significantly. In 2021 alone, the group brought in 55 new staff and turnover rose to more than £75m, a 35% annual increase. The business has since announced plans to hire 30 new people in 2022.
Catherine Lewis La Torre, CEO at British Business Bank, said: “We are extremely proud of the positive economic impact that the Northern Powerhouse Investment Fund has had on the North over the past five years. This evaluation shows that we’ve supported a wide range of businesses in every corner of the North, from rural agriculture and environmental businesses to fast-growing manufacturing and technology companies based in urban areas.”
“This investment programme has been highly successful due to the hard work and expertise of our team, our fund managers and wider stakeholders, including the Combined Authorities, Local Enterprise Partnerships and Growth Hubs across the North. As we look forward to the next phase of NPIF, we will continue to harness this local knowledge to keep building on our understanding of the finance needs of businesses in the North so that they may reach their full potential.”
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Roger Marsh, chair of the NPIF strategic oversight board and NP11 group of Northern local enterprise partnerships, said: “Investment is a key part of business growth, now more than ever before. Over the years, NPIF funding has enabled businesses to survive the pandemic, grow their teams, create new, innovative products and contribute to the standing of the North on the national and global stage.
“This evaluation truly demonstrates the impact the funding can have on business growth, and sets out the success that NPIF will continue to have in the future.”