Northern Powerhouse Investment Fund Early Assessment

Client: British Business Bank

The Northern Powerhouse Investment Fund (NPIF) invests in Microfinance, Business Loans and Equity Finance sub-funds which offer financing ranging from £25,000 to £2m, specifically to help SMEs secure the funding they need for growth and development. It is operated by a wholly owned subsidiary of the British Business Bank, the UK's national economic development bank. SQW, supported by the Centre for Enterprise and Economic Development Research (CEEDR) at Middlesex University, Belmana and BMG Research, was commissioned to evaluate the NPIF.

It will take many years before the full impacts of the NPIF can be identified, so the focus of the early assessment is on the processes (including the customer journey, how effectively the Fund is being delivered, and how this can be improved), as well as emerging intermediate outputs/outcomes for participating businesses, and the impact on the wider finance ecosystem. The evidence draws on an analysis of monitoring and contextual data, in-depth consultations with management, governance, delivery partners and external stakeholders, surveys with 67 beneficiaries and 16 non-beneficiaries, and case studies with five businesses.

The report - which can be downloaded here -  found that although NPIF is only two years into a 10-year programme, it has been very successful. The number and value of lending and equity deals are ahead of target, and the finance has been distributed widely across the NPIF areas. It has successfully engaged with the Local Enterprise Partnerships and other partners and built confidence in accessing finance.

The finance has enabled a wide variety of businesses to invest in activities that will directly improve their productivity through new skills, R&D, products, services and processes. This has now started to translate into additional sales, good quality employment and exports. Without the Funds, most businesses reported that projects would have been delayed, delivered on a smaller scale, or not happened at all. This has also been achieved over a period of investment uncertainty.

Alongside the NPIF, the SQW led team is also evaluating both the Midlands Engine and Cornwall and Isles of Scilly Investment Funds for the British Business Bank.