Northern Powerhouse calls for £6bn boost for North
The call comes as part of a new report, Innovation in the North, published in collaboration with Durham University Business School.
The report argues that targeted public and private R&D investment in the North’s high-potential sectors could help close the productivity gap between North and South, unlocking up to £206 billion in economic output over the next decade.
Jessica Bowles, vice chair of the NPP and director of strategy at Bruntwood, said: “This report shows what those of us working in northern cities have long recognised: our economy is rich in innovation potential – from healthtech and clean energy to advanced manufacturing and digital.
“The foundations are already in place, but what’s been missing is a strategic and long-term commitment from government to help these clusters scale and thrive.
“Unlocking that potential means backing the North not only with R&D funding but also with investment in infrastructure and skills that support diffusion and adoption.
“We know that innovation doesn’t happen in isolation – it’s embedded in our places, our businesses and our universities.
“Devolved, place-based investment and greater control for local leaders are essential if we want to turn that embedded strength into meaningful economic growth.
“Our report shows the North has the assets to deliver, but it needs the tools to do the job.”
Launched at a parliamentary reception marking Durham University Business School’s 60th anniversary, the report offers the most detailed analysis yet of the North’s innovation ecosystem.
It maps strengths across 71 subsectors and evaluates regional performance in skills, technology, infrastructure, and capacity for adopting new ideas.
The report highlights that R&D spending per capita in the North East is less than half the England average and only a third of that in the East of England.
It also points out that while the North is home to clusters in clean energy, health, digital, and advanced manufacturing, these sectors are underperforming due to limited support for scaling and adopting innovation.
Professor Kieran Fernandes, executive dean of Durham University Business School, said: “This report is a critical step in reshaping the UK’s approach to innovation and productivity.
“The findings show that targeted investment in the North could unlock both regional and national growth, addressing the persistent dilemma of regional versus national priorities.
“The economic evidence is clear: rebalancing innovation spending is not just a question of fairness, but a national economic imperative.”
Among its recommendations, the report calls for reduced business rates on lab space to support start-ups, a £3 billion annual investment in pan-Northern innovation, and targeted support for translational research and diffusion.
It also urges the government to back catapult centres as both national and regional assets and to expand the Made Smarter programme across the North.
Tom Bridges, UK government and innovation leader at Arup, said: “The North of England is uniquely positioned to help the UK realise its ambition of becoming a global science and innovation superpower.
“With world-class universities, R&D-intensive businesses, thriving start-up ecosystems, established innovation districts, and the momentum of Freeports and Investment Zones, the region has all the ingredients for success.
“To unlock this potential, we need greater R&D investment in the North, the expansion of Innovation Accelerators, and targeted support from government and Mayoral Combined Authorities — to back innovators and build the labs and facilities they need to grow.”