Chancellor John Healey will announce a £150m fund for university spinouts and startups across Liverpool, Manchester, Leeds, Sheffield and Newcastle. The money is being drawn from the British Business Bank's existing budget rather than added to it, and is intended to pull in private co-investment.
The commitment lands a month before Healey's first Budget and forms part of the government's argument that devolution, not central direction, is the route to growth. It is being announced in a speech at a British manufacturing site.
Five city regions are named as targets. The fund is aimed specifically at university spinouts and other early-stage companies — the part of the market where northern institutions generate research but where follow-on capital has historically thinned out relative to the golden triangle.
The structure is the detail that matters for founders. The £150m is a reallocation within the British Business Bank's existing budget, not new money, and the government has not disclosed the instruments involved, the cheque sizes, the ownership stakes taken or whether capital will be deployed directly or through appointed fund managers. Terms were not disclosed.
That places the announcement alongside two other British Business Bank moves this year: the £100m committed to first-time fund managers, and the contest — with M&G and Schroders among the managers competing — to run the government's £1bn scale-up fund. The through-line is state capital being used to seed the manager layer rather than to write cheques into companies directly.
Healey is expected to frame the intervention in supply-side terms, saying the aim is "to get behind the most innovative and fast-growing firms" and that this "is not sentimentality, it's supply side economics". He will argue for city regions with real power, local industrial strategies and public investment used to unlock private investment.
The fund supports Prime Minister Andy Burnham's devolution programme and his pledge of "growth in every postcode". Healey will also set out how the newly formed No10 North fits into the economic plan, describing a "dual mission" with the Treasury on growth and productivity.
The Conservatives dismissed the trailed speech as a "policy-light word salad". Shadow chancellor Andrew Griffith said it would do little for households and businesses worried about further tax rises, pointing to government borrowing rates near a 28-year high.
Business groups going into the Budget have pressed for action on employment costs, business rates reform and energy bills — none of which a £150m equity programme addresses.
The measure of this fund will be the multiple of private capital it attracts and whether the five named cities see a change in the volume of seed and Series A rounds closed locally rather than in London.
Original source: City AM — https://www.cityam.com/healey-launches-150m-northern-scale-up-fund/
