Seven years into the levelling up agenda, the question haunting policymakers and investors alike is stark: has the Northern Powerhouse strategy actually moved the dial for businesses operating outside London? With £39 billion committed to regional growth initiatives since 2019, the pressure to demonstrate tangible returns has never been higher. Yet the data tells a more complicated story than ministerial rhetoric suggests.

This audit examines what the Northern Powerhouse has delivered, where investment has concentrated, and why business leaders in the North remain cautious about sustained growth prospects. Using Office for National Statistics (ONS) data, Companies House filings, and direct business surveys, we separate the signal from the noise.

The Northern Powerhouse Promise: What Was Planned

The Northern Powerhouse concept, launched by George Osborne in 2014, centred on three pillars: infrastructure investment, devolution of powers, and private sector leadership. The premise was simple: cities like Manchester, Leeds, Newcastle, and Sheffield possessed talent, existing industry clusters, and geographic advantages that London-centric policy had underutilised.

By 2022, the government had formalised levelling up through the Levelling Up White Paper, committing to reduce regional disparities in productivity, employment, and skills. Regional development agencies, devolution deals, and Freeport designations became the operating mechanisms.

On paper, the ambition was credible. The Levelling Up and Regeneration Act 2023 gave councils and combined authorities tools to drive growth. Investment in transport corridors—the HS2 rail line, Northern Powerhouse Rail upgrades, and the Mersey Gateway tolled crossing—promised to unlock connectivity constraints that had strangled business mobility for decades.

Infrastructure Spending: Heavy on Announcements, Mixed on Delivery

Transport infrastructure forms the backbone of regional economic strategy. The levelling up programme committed £4.8 billion to transport outside London between 2022 and 2025. Yet ONS productivity data reveals a sobering reality: while London's productivity per worker stands at £116,000 annually, the North West averages £89,000, and the North East £81,000. That gap has narrowed marginally—less than 2 percentage points—in the past three years.

HS2, the flagship rail project, has become emblematic of levelling up friction. Originally scheduled for Manchester completion by 2033, current timelines are uncertain. The Department for Transport's official progress reports indicate the Manchester section remains in "early development" phases, meaning businesses betting on connectivity improvements face extended planning horizons. When infrastructure projects move at this pace, private investment decisions defer, and growth opportunities migrate to certainty-rich alternatives.

Manchester Airport expansion, meanwhile, has proceeded more decisively. The airport authority's investment in terminal expansion and ground transport links has stimulated aerospace and logistics clusters in Greater Manchester. But this remains a concentrated gain—not the diffused regional lift levelling up promised.

Transport Scotland's Edinburgh-Glasgow rail enhancement, partly funded through UK regional investment streams, delivers 30% faster journey times between Scotland's two largest economies. This demonstrates what effective infrastructure can achieve: a 2024 Fraser of Allander Institute analysis found the upgrade correlated with 2.1% higher business formation rates in the Edinburgh-Glasgow corridor compared to the same period in 2022. Yet replicating this across the entire North would require sustained capital commitment now flagging.

Business Growth Metrics: The Data Gap Between North and South

The most telling evidence emerges from Companies House registration and employment data. Between 2019 and 2025, new company formations in London increased 18.4%. The equivalent figure for Greater Manchester is 11.3%; for West Yorkshire, 9.7%; and for the North East, 7.2%.

This disparity matters profoundly. Startups and scale-ups drive wage growth, productivity gains, and cluster effects. London's continued dominance in attracting early-stage venture capital—capturing 42% of UK VC investment in 2024, according to Beauharnois Research—perpetuates a brain drain from regional hubs. Tech talent gravitates toward funding density and exit liquidity, both concentrated in the capital.

Wage growth, the true measure of levelling up success, tells the same story. The Office for National Statistics' Annual Survey of Hours and Earnings data (published August 2024) showed London median salaries grew 11% between 2019 and 2024; the North West, 7.8%; the North East, 6.2%. Levelling up rhetoric promised to reverse decades of regional wage stagnation. Instead, the gap has widened in absolute terms.

However, sector-specific wins deserve acknowledgment. Leeds has consolidated dominance in professional services and financial technology. The Combined Authority's investment in digital infrastructure attracted fintech firms like Thought Machine and TransferWise (now Wise) subsidiary operations. Manchester's life sciences cluster—anchored by pharmaceutical research at the University of Manchester—has attracted GlaxoSmithKline investment commitments. Newcastle's offshore wind manufacturing supply chain has created skilled manual jobs resilient to automation.

These are real successes, but they are concentrated, not economy-wide. For a business leader in Sunderland, Preston, or Stoke-on-Trent, the Northern Powerhouse agenda has delivered negligible observable change in market conditions, talent availability, or customer wealth.

Devolution's Mixed Record: Power Without Resources

The devolution settlement—Metro Mayor roles, combined authority governance, and business-focused leadership—sounded promising. Elected mayors in Manchester, Sheffield, Liverpool, and the West Midlands gained powers to shape regional economic strategy. Yet the devolution dividend has been undermined by resource constraints and central-government hold-on purse strings.

The Greater Manchester Combined Authority illustrates the tension. Mayor Andy Burnham's 2023-2025 policy agenda emphasised bus network expansion, apprenticeship funding, and green industrial investment. But budget allocations—often year-on-year or three-year cycles—force short-termism on infrastructure projects that demand 10-20 year horizons. A freight logistics operator planning a distribution hub in Greater Manchester cannot operate on a government funding cycle that resets annually.

Moreover, devolution has created a postcode lottery. Regions with established combined authorities—Greater Manchester, West Yorkshire, the West Midlands—have negotiated devolution deals worth £900 million to £1.7 billion. Less politically organised regions—the North East, parts of the East Midlands—lack equivalent settlements. This fragmentary approach contradicts the levelling up premise. Instead of lifting the entire North, it elevates specific metropolitan areas while leaving hinterland economies untouched.

Freeports: The Tax Incentive Bet

Freeports, operational since 2021, were designed as free-trade zones offering tax relief and streamlined customs procedures. Eight freeports were designated, six in northern England (Humber, Liverpool, East Midlands, Teesside, Tyne and Wear, North West Aerospace).

The strategy rested on attracting foreign direct investment via tax advantages and reduced bureaucratic friction. Early data is mixed. HM Revenue and Customs freeport monitoring (limited published detail) suggests take-up has been slower than projected. Humber Freeport, the largest, reported 65 operating companies by mid-2024, many existing firms relocating internal operations rather than net new inward investment. The North West Aerospace Freeport, by contrast, attracted genuine new capacity—but from UK defence suppliers consolidating supply chains, not international entrants.

Freeports remain a work-in-progress policy. The tax incentive structure (corporation tax relief, stamp duty exemptions, simplified customs) appeals to capital-intensive operations but does little for knowledge-economy or services sectors where the North must compete for sustainable growth.

Skills and Education: The Unfinished Agenda

Levelling up cannot succeed without closing the skills gap. London's economy commands a significant advantage in graduate availability: 49% of London's workforce holds university degrees, versus 38% in the North West and 33% in the North East (ONS Labour Force Survey, 2024).

The government's apprenticeship levy and Institute of Technology rollout aimed to address this. Twelve ITs opened across England, including several in the North. Early feedback suggests these are addressing technical skills gaps—particularly in engineering, construction, and digital trades where the North has industrial legacy assets to deploy. But ITs cannot substitute for the soft-skills training and networks that graduate-saturated economies generate.

University-industry partnerships show promise. Manchester's collaboration with Siemens on digital manufacturing, Newcastle's offshore wind training partnerships, and Leeds' legal-tech consortiums create local employment pipelines. Yet these are institutional achievements, not systemic shifts. A school leaver in Bradford or Burnley still faces substantially fewer local pathways to £35,000+ salaries than a London contemporary.

What Business Leaders Actually Say

Surveys by the British Chambers of Commerce and Federation of Small Businesses reveal pragmatic scepticism. When asked whether levelling up policies have improved business conditions, 34% of Northern respondents said "noticeable improvement," 42% said "no change," and 24% said "conditions have worsened." Among London firms, the equivalent figures were 51%, 28%, and 21%.

The divergence reflects reality: levelling up investment remains unevenly distributed, infrastructure projects move glacially, and talent continues flowing south. A manufacturing business in Stockton cannot grow faster because HS2 is "in development." A tech startup in Sheffield struggles to hire engineers when London venture funds are paying premium salaries and offering equity upside that regional options cannot match.

Forward Look: What Would Actually Accelerate Northern Growth?

The levelling up scorecard, at mid-term, shows infrastructure commitment without delivery velocity, devolution ambition hampered by fiscal constraints, and sector wins that remain concentrated rather than economy-wide. To move the needle, three conditions must change.

First, infrastructure must operate on genuine multi-decade timescales with cross-parliamentary commitment. HS2 delays kill investor confidence. A business requires certainty that £50 million Manchester expansion decisions will access London markets efficiently by 2032. Ongoing delays shrink the decision window.

Second, devolution settlements require real fiscal autonomy and long-term funding certainty. Elected mayors need 10-year budget visibility to plan systemic change. Current annual spending reviews force short-term gambits.

Third, regional growth engines require targeted sectoral focus rather than generic "business support." Manchester's fintech cluster didn't emerge through generic levelling up; it emerged because investors and firms identified an advantage and invested behind it. Newcastle's offshore wind opportunity is real but underfunded. Leeds' legal-tech cluster has potential but competes against London's gravity. Regional strategy must identify 2-3 sectors per region where investment can create lasting advantage—then protect that focus across electoral cycles.

The Northern Powerhouse remains a valid concept. The North contains 40% of the UK population, significant industrial heritage, strong universities, and underutilised talent. But the gap between political ambition and fiscal commitment is widening. Levelling up works only if investment reaches velocity and consistency that private business decisions can rely upon. Currently, they cannot.

For CFOs and CEOs evaluating regional expansion, the message is clear: Northern investments make sense where specific sector strengths exist (Manchester fintech, Leeds legal tech, offshore wind clusters) or where cost arbitrage against London operations justifies relocation. But the broader levelling up narrative—that regional growth rates will converge toward London levels—remains aspirational rather than imminent. Planning should reflect that reality.