Southern start-ups receive ‘five times more funding than in the North’

Emma Bowden, PA

London and the South East have received five times more Government funding for start-ups than the North and Midlands, according to analysis by Labour.

Businesses in the South East and London in total received more than £700 million in funding, while those in the North, Yorkshire and Midlands received £140 million, data shows.

Meanwhile, the average award for a start-up in the North East, North West, West Midlands and Yorkshire was lower than that for a business in London or the South East.

Shadow business secretary Ed Miliband accused the Government of “reinforcing economic imbalances in our country” in the start-up funding.

Just over two-thirds of applications for the Future Fund – launched to help protect the UK’s innovation sector during the coronavirus crisis – were from London and the South East.

Labour looked at funding allocations for successful applicants since the scheme launched in April of last year up until December 17, when the most recent data was released.

The Future Fund programme, aiming to support businesses that are normally reliant on equity investment, closed to new applicants on January 31 this year.

The average award for businesses in London was £1,058,422, while in the North East it was £892,857, according to Labour’s analysis of Future Fund data.

In Scotland, the average award was just a third of the national average at £352,941, data suggests, while it Wales it was half at £500,000.

Data also shows that the approval rate for applications from the North West, Scotland, Wales and the West Midlands were lower than the 84% approval rate for those from London and the South East.

Shadow business secretary Mr Miliband said: “While the Government talks about backing the North and Midlands, the reality is starkly different.

“By investing much more heavily in start-ups in the South of England and squeezing out other parts of the country, they will be simply reinforcing economic imbalances in our country.

“Ministers have already hurt hard-working entrepreneurs during this crisis by excluding them from support. Instead of hot air and rhetoric, it is time for ministers to deliver.”

A Government spokesman said: “We have provided an unprecedented £280 billion of support for businesses affected by Covid in every nation and region of the UK.

“The Future Fund uses a set of standard terms with published eligibility criteria, independent of ministers. This a clear, efficient way to make funding available as widely and as possible, irrespective of location.

“In addition to the Future Fund, the British Business Bank has provided nearly half a billion pounds to high-growth firms outside of London.”

From Our Partners