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Northern Powerhouse councils failing local SMEs

The proposal to boost the economy in the North of England, and its move away from London and the South East, also known as the Northern Powerhouse, seems to be failing local small and medium-sized enterprises (SME).

Those are the results of a new research done by IT services aggregator Streamwire.

A Freedom of Information request was sent to 34 councils making up the Northern Powerhouse, to see how much money they’re spending on local SMEs, especially on local IT SMEs.

Last August, the Government has set a goal to spend £1 in every £3 with small businesses, and now we know that more than half of Northern Powerhouse councils are missing on the pledge.

Just over half of all councils that responded (15 in total) said they didn’t spend any of their IT services budget with local SMEs. Moreover, 18 borough councils can’t tell SMEs and large suppliers apart, while 86 per cent don’t plan on increasing the proportion of SMEs.

A total of three spend more than a third of their budget on small suppliers.

“The key objective of the Northern Powerhouse was to establish the region as a beacon for 'doing things differently', strengthening the area as an economic hub and showcasing how other regions could adopt similar innovation and best practice in their communities,” said Anne Stokes, Streamwire CEO.

“Councils can play a powerful role by using their budgets to procure more from SMEs, which are more than likely to be regional businesses. Unless local councils take up this mantle, the government's goal of building an economic stronghold in the North is surely going to be very difficult to achieve sustainably.”