Over half (56%) of UK SMEs believe that government investment is unevenly spread in favour of London, according to the latest SME Confidence Tracker from independent financial services provider, Bibby Financial Services (BFS).
The findings suggest UK SMEs expect more from the Government’s industrial strategy beyond London, as awareness of the Northern Powerhouse grew by 13 per cent in the year to over two thirds (70%) of SMEs. However, there remains work to be done to champion the Midlands Engine, where over half (54%) of SMEs are unaware of the initiative, despite renewed efforts by the Government to champion the region.
Highlighting further imbalances, over a third (36%) believe the Northern Powerhouse is too focused on Manchester and should look to develop other cities in the North, down from 40% in 2017. A similar situation exists in the Midlands, where nearly a third (28%) of SMEs believe the Midlands Engine is too focused on Birmingham and should be focusing on developing other cities in the region, down from 33 per cent in 2017.
When asked what they thought about the Northern Powerhouse, nearly a third (29%) of SMEs see it as an investment gimmick that is politically motivated. Just under a quarter (24%) believe the same of the Midlands Engine.
The figures follow the recent appointment of James Brokenshire, Secretary of State for Communities, as the ministerial champion for the Midlands Engine.
Edward Winterton, UK CEO, Bibby Financial Services said: “After decades of under-investment in the UK regions, a patchwork approach to investment is not delivering on the Government’s promise of a fairer economy. SMEs need better support to re-set the balance between the regions and provide business owners with the confidence to invest and grow.
“SMEs are doing their upmost to get on with things amidst Brexit uncertainty. It is about time the Government did the same. Brexit must stop being a distraction from a domestic agenda that needs to deliver for businesses and the people they employ. For starters, roads need to be built, internet speeds improved, and train lines electrified.”
The latest research also shows that confidence amongst UK SMEs declined from 50 per cent in Q1 to 42 per cent in Q2. Over half (55%) also think that uncertainty around Brexit is damaging the economy. A further 39 per cent of SMEs believe that the UK workforce lacks the skills to enable competitiveness.
Winterton added: “At the start of the year we saw a Brexit-bounce in confidence as SMEs saw signs of progress and tangible outcomes from the negotiations. Since then, developments on the Brexit front seem to be as dry as the UK’s weather. Lack of movement and squabbling within government means that SME confidence will continue to waiver.
“The latest fallout from Chequers and the resignations of Boris Johnson and David Davis is only going to fuel the frustrations of business owners up and down the UK. Confidence in the government and the economy will take a hit.”