As a business owner it is important to know about wider issues – which may indirectly affect not just your venture but the business landscape in which you operate in. As a small business one of the most important skills that you will need to have is adaptability. Circumstances may never be totally ideal so it’s important to find ways to adapt to societal changes – whether this be a global recession, heightened terrorism or a weak government – you as a business owner need to adapt to changing landscapes.
However a business owner should always be planning ahead and spotting potential seismic shifts. Planning ahead is far better than being reactive – which is why the best business owners not only think about their own venture but also try and keep themselves up to date with current affairs. Here at Company Formation MadeSimple we strongly believe that business owners should be aware of the wider business and political landscape – so that they can be prepared. To see more about how we can help your business see here for more information.
One such subject that has been talked about a great deal by the current government is the creation of a Northern Powerhouse. Essentially the idea is that too much of the UK’s wealth is concentrated in the south (particularly in London) so it is this government’s ambition to address this issue by creating better economic conditions for the north of england. So what is this Northern Powerhouse in terms of how it works and most importantly how small businesses up and down the country benefit from it?
What is the Northern Powerhouse
The Northern Powerhouse is something that is now perceived to be the creation of Chancellor George Osborne. In a speech that he made after the election he described this idea in the following way:
“Within 40 miles of Manchester, you have Leeds, Sheffield and Liverpool, Lancashire, Cheshire and Yorkshire – a belt of cities and towns that contains ten million people – more than Tokyo, New York or London. Bring those cities together, connect Liverpool to Hull, the North West to Yorkshire and the North East – and the whole will be greater than the parts”
The concept centres around creating a collective amongst the north of England through creating initiatives and infrastructure that will ignite wealth creation and enterprise. It’s an enormous project but one which is showing potential to transform the north. The chancellor went on to further state that:
“We are making record investment in transport which will see the key roads upgraded, and the north’s railways improved with new trains and electrification. we’ve worked with the great universities of the north to make major scientific investments, like the quarter of a billion pound Sir Henry Royce Institute in the city, with links to Leeds, Sheffield and Liverpool.”
Structural changes in various institutions are also clearly a key component of what the Northern Powerhouse is all about. This idea is also about more than just pumping funds into the north it’s also about preparing for greater freedoms from Westminster – whereby northern regions have more of a say on matters that affect them, rather than having decisions made for them. It’s about ensuring less of a dependency on central government so that northern cities have more regional power.
This of course will not happen overnight – change and reform on scale rarely does – but there are signs that we might be seeing hints of how this will look. For example Manchester is soon to get its first elected Mayor in 2017 – with Sheffield also set to follow suit. It is questionable whether this will be widespread across the whole of the north – but it does indicate a willingness on part of the government to give a degree of autonomy that had not been previously seen until now. The signing of the recent North East devolution deal will also see that particular region have their first elected mayor. This deal has been hailed by the Northern Powerhouse Minister James Wharton.
“We have listened to local people and are devolving significant resources and powers from the banks of the Thames back home to where they belong on the banks of Tees.”
There is evidence to suggest that the Northern powerhouse – behind all the rhetoric – has substance to it. The question is can this program create conditions for startups and micro businesses that will be felt Of course it’s not something that anyone can answer fully at this relatively early stage. However there are signs that there could be a trickle down effect of all these various schemes that have been introduced.
Better transport creates more opportunities
One of the largest components of the Northern powerhouse program is undoubtedly the huge plans for improving transport links. There is no doubt that better transport links do tend to create greater economic benefits. According to CEO of the UK Bond Network, Chris Maule, in a piece he did for Growth Business parts of greater Manchester such as Burnley have seen greater improvements in infrastructure investment because of the new Manchester direct train line. These sentiments are also echoed by the Daily Telegraph which states that
“The general consensus is that with greater power and better transport between the Northern cities, SMEs would be able to collaborate more effectively and access local markets more easily.”
Control of Business Rates
Another key part of the Northern Powerhouse program is that regions will have the power over their business rates. Councils will eventually be able to keep their business rates that they collect and spend it on infrastructure for the purpose of regeneration. What this could mean for small businesses is that their cities will have much more money to set aside to possibly building in place schemes to help startups. London has a wealth of startup incubators and co – work spaces – so perhaps councils with money to keep – councils be able to invest in creating more work hubs so that small businesses can have space to work and network with other local businesses.
Keep more local talent away from the capital
One of the hopes of this scheme is that it will keep young talent based at home – rather than automatically seeking to go to London for work. Indeed, if the north is regenerated as the government hopes there is no reason not to think that the talent pool will be bigger for small businesses to choose from, particularly if greater investment in infrastructure facilitates growth. Maybe some London based startups will migrate up north – who knows.
It will be a far more healthy situation if the economy is more balanced and this will in turn provide much better conditions for northern based startups and micro businesses to thrive.
We hope that this has given you an insight into what the Northern powerhouse could achieve if implemented correctly.
Here at Company Formation MadeSimple we provide essential tools to assist startups in achieving their aims. For more information about what we do see here for more information.