Healey Adds a £150m Rung for Northern Scale-Ups

Chancellor John Healey on 7 September 2026 put a £150m northern scale-up fund on the British Business Bank’s existing books, with tickets of £5m to £15m. The cheques are meant for university spinouts and other fast-growing firms across the North of England.

He spoke at the Manufacturing Technology Centre in Coventry. Business Secretary Jonathan Reynolds said the cash “isn’t new money”.

The New Cheques Start at the Old Fund’s Ceiling

The North already has a public investment ladder, and it does not reach the size of a proper growth round. The Northern Powerhouse Investment Fund II is a £660m British Business Bank vehicle launched in 2024, offering loans from £25,000 to £2m and equity investment up to £5m.

By 12 May 2026, two years in, NPIF II had backed more than 400 businesses across 449 deals and facilitated almost £275m. Direct investment of £151.3m had unlocked a further £122.6m from private investors, about 81 pence of private money for each public pound.

The new allocation starts where that ladder stops. Tickets of £5m to £15m sit at or above the NPIF II equity cap, which is the point at which a northern company has outgrown the regional SME pot and still looks small to a London growth fund. Leandros Kalisperas, chief investment officer at the British Business Bank, said the proposed fund would give those firms a larger cheque than NPIF II can write.

THREE PUBLIC POTS ON THE NORTHERN LADDER

The Inspire pot, backed with £10m from the North East Mayoral Strategic Authority and £12.5m from Durham, Newcastle, Northumbria, Sunderland and Teesside universities, is built for the first risky years after a lab exit. Healey’s allocation is the next rung, not a replacement for either fund.

HOW THE LADDER WAS BUILT

1. 2017: The first Northern Powerhouse Investment Fund opens as a regional SME finance programme run through the British Business Bank.
2. 2024: NPIF II launches as a £660m follow-on, with equity capped at £5m and coverage across the North West, Yorkshire and the Humber and the North East.
3. 12 May 2026: The bank marks two years of NPIF II with more than 400 firms backed and almost £275m facilitated.
4. 7 September 2026: Healey announces a £150m scale-up allocation with tickets of £5m to £15m, drawn from money already sitting at the bank.

NPIF II’s own managers still handle the smaller end: Praetura Ventures on North West equity, Mercia in Yorkshire and the Humber, and Maven Capital Partners in the North East. The new vehicle has no named manager yet.

What the £150m Northern Scale-Up Fund Will Buy

At the bottom ticket the pot funds 30 companies. At the top it funds 10 to 30 in total, and 10 if every cheque is £15m. That range is the whole programme. It is not a broad northern industrial budget.

The British Business Bank presented the money as a new £150m Northern scale-up fund for ambitious businesses, including university spinouts, that have moved beyond the early stages of growth. It is meant to sit beside NPIF II and the Regional Angels Programme. Sectors flagged with the announcement were clean energy, technology, space and the creative industries.

Kalisperas put the gap in plain terms. The North, he said, should have “the same opportunity to access the capital they need to grow and thrive as other parts of the UK.” He also called it a “proposed fund,” which is the right word until a manager, a first close and a first company are named.

One northern specimen already sits inside the new ticket band. NunaBio, a synthetic DNA manufacturing spinout from Newcastle University, raised £6.5m to scale its enzymatic DNA platform, a cheque NPIF II could not have led at that size. Most university companies never get that far without leaving the region or raising in London.

The Money Was Already on the Bank’s Books

Reynolds was asked whether the £150m was new cash or money previously set out under Rachel Reeves. “It isn’t new money,” he said. The Treasury line matches that: the pot uses funds already allocated to the government-owned bank.

Healey still sold it as supply-side policy, not regional sentiment, in his first major speech as chancellor, a little over a month after Andy Burnham made him Treasury chief.

This is not sentimentality, it’s supply side economics.

John Healey, Chancellor of the Exchequer, Manufacturing Technology Centre, Coventry

He also said London is “our powerhouse,” then argued that British city-regions would transform national growth if they matched those in France or Germany. The speech sat in the Midlands, not in Manchester or Newcastle, and it came seven weeks before his first Budget on 28 October 2026, with tax rises still unruled-out.

On the bank’s own books the sum is a slice, not a new machine. By 29 June 2026 the British Business Bank had put more than £600m of direct equity into more than 50 UK science and technology scale-ups, up from £290m in October 2025 and from 31 companies in March 2025. It aims to put more than £400m a year directly into UK scale-ups, inside about £2bn a year of wider venture deployment. A £150m northern sleeve is large for a dozen firms and small beside that national run-rate.

Northern Spinouts Still Trail the Golden Triangle

The Royal Academy of Engineering’s Spotlight on Spinouts 2026 report, published on 3 June 2026, found UK university spinouts have nearly tripled in value to £49 billion since 2020. About 2,000 spinouts have been created since 2010, generating 27,000 jobs, 70% of them after 2020. Deep tech accounts for 96% of that value, and 80% (£40 billion) sits in firms still headquartered in the UK.

Oxford ranks first in Europe for spinout value. Cambridge, University College London, Bristol and Imperial fill out a British five in the European top ten. The Academy notes stronger activity in a “Northern Arc” of Liverpool, Manchester, Leeds and Sheffield. Volume and funding still run through Oxford and Cambridge.

A Parkwalk and Beauhurst tally of equity into spinouts from 2015 to 2024 shows how wide that gap is. Excluding Scotland, northern spinouts raised £1.33b over a decade.

SPINOUT EQUITY BY REGION, 2015 TO 2024

Manchester local-authority spinouts took £178m across that decade, Leeds £131m and Sheffield £110m. Liverpool took £17.3m. Manchester-based spinouts hit a record £56m in 2024, which is a good year in the North West and a quiet month in the Golden Triangle. Average university equity stakes have fallen to about 16%, the lowest in a decade, after the 2023 spinout terms guidance, but Ana Avaliani, director of enterprise at the Royal Academy of Engineering, said companies can still take 12 to 18 months to get out of the lab.

A £150m growth sleeve cannot rewrite that map. It can write the follow-on cheque for a handful of firms that have already made it out.

A Northern 500 and Four New Wealth Fund Partners

Healey did not only announce the bank allocation. He wrapped it in a wider northern growth pitch, with mayors asked to bring mid-sized firms and infrastructure deals into the same frame as the spinout cheques.

WHAT CAME WITH THE £150M

• Northern 500: A group of the North’s most ambitious mid-sized businesses, led by the Great North partnership of mayors and backed by government and the private sector.
• Wealth Fund seats: South Yorkshire, Liverpool City Region, North East England and the Cardiff Capital Region become strategic partners of the National Wealth Fund.
• Crowd-in brief: The Treasury wants the £150m to pull extra private cash into northern university spinouts and other high-growth firms, not to sit as a closed public pot.

North East Mayor Kim McGuinness tied her welcome to jobs and to work with the National Wealth Fund on regeneration and transport, which is a different cheque book from the scale-up fund. Henri Murison, chief executive of the Northern Powerhouse Partnership, treated the £150m as useful only if risk capital moves with it.

Prime Minister Andy Burnham has hung his early weeks on growth outside London and “growth in every postcode.” The Coventry speech was Healey’s economic backing for that line. Fiscal devolution, including a share of local income tax for mayoral authorities from 2028, is promised as a Budget roadmap rather than as cash that lands with this fund.

Private Capital Has to Follow the Public Money

The loud complaint after the speech was that £150m is small next to the language around it. That complaint is fair as industrial strategy and misses the narrower design. Ten to 30 growth cheques will not rewire northern venture. They can put a public name on rounds that private funds have skipped once a company is past the NPIF II cap.

NPIF II’s own crowd-in rate was 81 pence of private money per public pound. If the new fund only repeats that ratio, the North gets another thin layer of state equity. If it anchors £10m and £15m rounds that London growth funds join, the £150m starts to look like a signal, which is the Treasury’s stated aim.

The British Business Bank £150 million scale-up fund for the North is welcome and reflects the importance of supporting more fast-growing businesses, which is only possible by leveraging more private capital also prepared to take risk.

Henri Murison, Chief Executive, Northern Powerhouse Partnership

Nationally, pension providers are already exploring a Scale-up Fund of over £1 billion for British science and technology companies, with the British Business Bank working alongside that group. That is a UK-wide pool, not a northern one. Healey’s northern sleeve is the regional test of the same idea: public capital as the first serious growth cheque, private capital as the rest of the round.

No manager has been named. No first company has been named. The Budget on 28 October 2026 is where Healey said the wider devolution money map will be drawn, and until a first £5m to £15m round closes in the North the allocation is still a speech line on the bank’s existing books.