Last month the Chancellor announced the Government’s new Northern Growth Strategy. As a northerner, we are used to periodic strategies (from both sides of the political divide) promising to revive communities, reverse some of the damage of deindustrialisation and generally take us back to the “good old days”. Meanwhile UK economic growth continues to be concentrated in the capital and surrounding Home Counties.
But this strategy is unusually frank. Northern productivity sits 25% below London and South East England, almost exactly where it was two decades ago. The strategy leads with claims that “too often” local leaders “have not been sufficiently backed by central government – with pepperpot funding, empty slogans or false promises on investment infrastructure”. It’s a striking admission and attempts to increase the “historically low levels of business investment” into the North is a central pillar of the Government’s strategy.
If the litany of other post-war strategies has taught us anything, it’s that public money alone won’t bridge the North / South divide and private investment into businesses is crucial to catalysing growth. With that in mind the Beauhurst Insights team wanted to ask a simple question: over the decade in which “Levelling Up” and the “Northern Powerhouse” dominated the policy conversation, how much private investment actually found its way North?
The North-South equity investment gap
Much has been said about Britain’s North / South divide, but one stat sums up the difference quite neatly. Between Q1 2015 and Q4 2025, private businesses across the North East, North West and Yorkshire & Humber secured £21bn in equity funding from investors. This sounds impressive. But to put this in perspective this figure is smaller than the sum secured by firms within a single London Borough. Over the same period, private firms operating within Westminster City Council secured £33bn.
Some people would be correct in saying Westminster is an edge case, but over the measured period London’s businesses secured over six times more investment than their Northern peers. The Northern Growth Strategy itself notes that total business investment per job in the North West runs at £9,200, against £13,000 in London. That gap, on the government’s own framing, is bad enough. The deal-flow gap is wider still, and it sits in exactly the part of the economy the strategy says it wants to grow: scale-ups (often equity back), innovation clusters and the high-growth sectors at the heart of the Industrial Strategy.
The Westminster comparison is striking, but the trend over the decade is even more telling. Despite the Northern Powerhouse and Levelling Up agendas, last year Northern England raised around the same level of investment as the region did a decade earlier. As shown in Figure 1, the gulf in the value of completed deals between the North and South has grown substantially over the last decade, from around £1.7bn in 2015 to over £4.3bn in 2025. Put simply, Northern businesses get fewer deals, lower investment and have to give up larger equity stakes than Southern peers.
