This week’s Budget puts real weight behind growth beyond Westminster.
Mayors in England get a £1.5bn borrowing facility and the right to keep a share of income tax from 2028, and of business rates from next year, with local retention of business rates rising to 100% by the end of the decade. There is also £285m of Good Growth Funding in 2027-28, including incubator capital. The British Business Bank, meanwhile, gets an extra £5bn of capacity. Together, this is the kind of long-term commitment founders and investors can plan around.
The two work hand in hand. Good Growth Funds will build the foundations of a growing place: homes, high streets and transport. A bigger British Business Bank, with £1.4bn of the extra capacity going to equity funds backing high-growth businesses, provides the capital that turns a breakthrough in a Leeds lab or a Glasgow start-up into a company employing hundreds of people. It is great to see that increase.
Getting equity to founders in the nations and regions is one of the UK’s most powerful growth levers, and the British Business Bank’s regional funds have already shown it works.
The opportunity is significant. Northern universities account for a third of the UK’s research income, around £3.4bn a year, yet the region attracts roughly 11% of venture funding. That is not a weakness. It is one of the biggest untapped opportunities in the UK economy: world-class science and ambitious founders, building companies that are ready to grow.
Backing them also keeps value at home. Just 8p in every £1 of growth funding into UK spinouts comes from rounds backed solely by UK investors, according to research from Bidwells and Beauhurst. Every company that scales with British capital behind it keeps more of its jobs, tax and returns in this country.
And this is not a leap of faith. The proof is already there. In the past 12 months alone, six companies we have backed have been sold, in deals worth more than £400m between them. Founders across Scotland and the North are building businesses that deliver, and backing them is one of the surest ways to turn this Budget’s investment into national growth.
The new founders’ relief, a 10% rate on up to £10m of lifetime gains from April 2027, rightly recognises that each of those exits is a chance for founders to back the next generation close to home.
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So how does the UK make the most of it? Three priorities.
First, make the new money work together. Good Growth Funds are designed to bring public finance, pension funds and private capital behind local priorities. As mayors and the Treasury design the borrowing facility, building in routes for it to work alongside the British Business Bank and experienced private investors would let places and the companies within them grow together.
Second, build on what is already working. The extra £5bn strengthens a model that is already delivering. The government’s commitment to work with pension providers to accelerate capital into scaling businesses is the right next step, so that founders across the nations and regions can keep growing in the UK well beyond their first raise.
Third, bring every nation with it. The devolved governments will receive equivalent funding through the Barnett formula, which is welcome. Edinburgh’s fintech cluster and Dundee’s games industry are among the national strengths the government itself has named, and the University of Edinburgh is one of the UK’s most prolific sources of spinouts. A consistent route to growth capital across all four nations would make the most of every one of them.
The ambition in this Budget is clear. Growth has to be built beyond London, with founders at its heart. The founders who will deliver on it are already building in Leeds, Manchester, Newcastle, Edinburgh and Glasgow. Getting equity to them, early and at scale, is how the UK turns that ambition into growth felt in every part of the country.