Northern Powerhouse Investment Fund exceeds job creation target

The Northern Powerhouse Investment Fund (NPIF) has exceeded targets for helping businesses since its launch in 2017.

A report by independent research company, SQW, published today (April 5) found that:

• 6,071 new high-quality jobs have been created through the fund, almost 1,000 more than planned
• 73% of businesses had increased workforce skills
• 62% reported additional investment in R&D
• 74% of businesses saw an increase in sales with the help of NPIF funding
• NPIF has made 1,324 investments to date, into 983 companies totally £317m to the end of January 2022
• The Fund has also generated £437m in private sector leverage

The analysis was based on 274 SMEs that have benefited from NPIF funding.

It found 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. Of those surveyed, 45% of businesses went on to secure follow-on funding from sources other than NPIF, totalling more than £63m, or an average of £540,000 per firm. Meanwhile, 86% of equity recipients saw an increase in their company valuation.

In addition to this, 74% of businesses 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.

NPIF provides equity, debt and microfinance to businesses in the North West, Yorkshire and Humber, and Tees Valley regions.

To date, 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.

Manchester-based developer and software provider to the legal sector, Summize, is one example of a business that has benefitted from NPIF funding. The business completed a £1m funding round led by NPIF-Maven Equity Finance in December 2020 and used the funding to invest in its talent and SaaS product offering. It has since gone on to grow its team by more than 80%.

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.”

She added: “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.”

Sir 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.”

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.