Healey launches £150 million fund for northern innovators as fiscal headroom tightens

# John Healey, the UK chancellor, unveiled a £150 million fund for fast‑growing firms in the North of England on Monday. The British Business Bank will manage the pot, offering investments of £5 million to £15 million to university spin‑outs and other innovative companies.

The announcement formed the centerpiece of Healey’s speech on the day he set out a broader “active state” agenda. He said the fund will “get behind the most innovative and fast‑growing firms” and that public money will be used to attract private capital.

Healey framed the move as part of a plan to spread growth more widely across the United Kingdom. He pledged that the British Business Bank and the National Wealth Fund will receive a stronger mandate to support investment and innovation.

The National Wealth Fund has already signed strategic partnerships with mayoral authorities in South Yorkshire, Liverpool City Region, the North East and Cardiff Capital Region. Those agreements give local leaders direct access to the fund’s investment expertise for infrastructure projects.

Healey positioned the fund as a response to the “optimistic story” he wants to tell about Britain. He echoed the tone of Prime Minister Andy Burnham, who has urged a more upbeat narrative than his predecessor.

The chancellor’s optimism arrives against a challenging macro‑economic backdrop. Government borrowing costs have risen sharply, and the war in Iran has heightened concerns about inflationary pressure. Those factors compress the fiscal space ahead of Healey’s first budget on 28 October.

Economists note that the Treasury’s fiscal buffer, built by former chancellor Rachel Reeves, may be tested if growth does not materialise as projected. Some warn that the government could face pressure to raise taxes or cut departmental spending to preserve that buffer.

The Conservative opposition dismissed the speech as “policy‑light word salad”. Shadow chancellor Andrew Griffith warned that families and businesses remain anxious about higher taxes and borrowing rates near a 28‑year high.

Liberal Democrat deputy leader Daisy Cooper criticised the fund’s geographic focus, arguing that re‑announcing £150 million for the entire North will “barely shift the dial on growth”. She called for a broader Growth and Defence Deal that addresses Brexit‑related trade barriers.

Healey responded to criticism by stressing that the fund is not “sentimentality” but “supply‑side economics”. He said the active state will remove red tape, give city regions real power and use public investment to unlock private capital.

The chancellor also pledged that the National Wealth Fund will support local industrial strategies, linking public money to private investors to create jobs in the regions that need them most.

Analysts see the fund as a modest but concrete step toward regional diversification. The £150 million figure represents a small share of total UK public investment, yet the targeted size of each grant (£5‑15 million) could provide meaningful growth capital for firms that have struggled to secure private financing.

If the fund succeeds in attracting additional private cash, it could amplify its impact beyond the initial allocation. The Treasury’s hope is that the partnership model will encourage private investors to co‑invest, leveraging public money into larger financing rounds.

Critics remain skeptical about the fund’s scale and timing. The combination of higher borrowing costs and geopolitical uncertainty may limit the government’s ability to sustain further regional investment without compromising fiscal discipline.

Healey concluded that wealth creation requires an “active, accountable state at all levels”. He argued that removing obstacles and creating conditions for profit‑making will help Britain navigate global turmoil and deliver a more resilient economy.

The fund’s rollout will be watched closely by regional leaders, business groups and opposition parties. Its effectiveness will hinge on the ability of the British Business Bank to identify high‑potential firms and on the willingness of private capital to match public dollars.

In the weeks ahead, the chancellor’s budget will reveal whether the £150 million fund is an isolated initiative or the first step in a larger, more coordinated regional growth strategy.