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North-South divide worsened by Covid-19, says Nucleus

Over a third (35 per cent) believe that the regional inequality across the UK will never be resolved.

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Chirag Shah/Nucleus Commercial Finance

Back in February, the Kalifa report outlined a plan to strengthen regional fintech hubs outside of London and the SouthEast, but it seems like the hill just got a little steeper.

According to new data from Nucleus Commercial Finance, 56 per cent of SME leaders think that the UK’s regions are unequal, with 44 per cent saying that economic inequality has worsened as a result of the pandemic.

Looking into the numbers a bit deeper, the divide becomes clearer.

Business leaders in the North are most concerned about regional inequality, with nearly three quarters (72 per cent) saying they are worried about the North-South divide. In the South, just under half (49 per cent) agree that the regions are unequal.

The East Midlands feel the UK is most unequal, with 78 per cent noticing the divide, closely followed by the North West (77 per cent) and Yorkshire and Humberside (69 per cent).

Nearly a third (32 per cent) of SMEs also believe that the location of their business has negatively impacted their ability to access funding throughout the pandemic.

“Despite years of promise from the government to address the North-South divide, it’s clear SMEs are still feeling its impact and many don’t ever see it being resolved. It’s particularly worrying that business owners have felt the force of this when it comes to accessing finance,” Chirag Shah, CEO of Nucleus Commercial Finance said. 

“SMEs are the lifeblood of the economy and play a vital role in the communities they serve. In order for them to thrive, we need to provide them with the right tools to help them future-proof their business and ultimately succeed for years to come.”

Shah also called on the Prime Minister to “do more to level up and unite the country” to boost local business and help ensure that no region feels hard done by.

Nucleus’ research found that SME leaders across the regions were pessimistic about the ability of the government to address the issue, with 34 per cent believing that equal government investment will never be addressed and 35 per cent think that investment equality across the regions will never be resolved.

To help spur on SME recovery, Nucleus recent announced a post-CBILS lending programme, called Business Growth Loans.

The new scheme allows companies to borrow up to £25,000 over six months as the government-backed schemes close.

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