Chancellor John Healey is unveiling a £150 million investment fund today, September 7, 2026, aimed at supporting high-growth businesses across the North of England. Speaking at a manufacturing site in the West Midlands, the Chancellor is expected to frame the initiative as a core component of a broader growth plan designed to decouple the UK’s economic performance from London and the South East.
The fund is specifically targeted at university spin-outs and innovative scale-ups in five major northern hubs: Liverpool, Manchester, Leeds, Sheffield, and Newcastle. Individual investments from the pot are expected to range between £5 million and £15 million.
Reallocated Capital and Supply-Side Strategy
The £150 million is not new Treasury spending; rather, the capital has been reallocated from existing budgets within the British Business Bank. By deploying these funds toward regional “scale-ups,” the government aims to leverage public money to attract additional private capital.
Healey has described this approach as a form of modern “supply-side economics.” This strategy reflects an “active state” economic philosophy adopted by the administration of Prime Minister Andy Burnham, who took office in July 2026. This stance marks a shift in fiscal emphasis following the tenure of former Chancellor Rachel Reeves, focusing on direct regional investment to stimulate industrial growth.
Market Pressures and the October Budget
The announcement comes as the Treasury prepares for its first formal Budget on October 28, 2026. The fiscal landscape is currently shaped by significant external pressures, including bond market turmoil and inflationary trends linked to the ongoing conflict in the Middle East.
UK borrowing costs have recently faced upward pressure, with some bond yields hitting 18-year highs amid the geopolitical instability involving the US and Iran. Analysts suggest that while regional investment funds like the £150 million northern pot are intended to foster long-term growth, they may not immediately address the Treasury’s current fiscal challenges.
Focus on Northern Innovation
The selection of Liverpool, Manchester, Leeds, Sheffield, and Newcastle as primary beneficiaries underscores a strategy to bolster existing research and development clusters. By focusing on ticket sizes up to £15 million, the Treasury is targeting the “funding gap” often cited by firms that have moved past the startup phase but require significant capital to achieve commercial scale.
The Chancellor’s speech today is expected to emphasize that regional growth is a matter of economic necessity rather than sentimentality, arguing that the UK cannot achieve its national growth targets without significantly higher output from northern urban centers.
