18th April 2023
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Sean Hutchinson, senior investment manager at the British Business Bank, reflects on the North’s coastal towns, and discusses how recent efforts by the Northern Powerhouse Investment Fund (NPIF) and other investors in redeveloping coastal towns can be the first step towards a road of vast opportunity.
In 2017, the British Business Bank and 10 Local Enterprise Partnerships (LEPs) across the North West, Yorkshire & the Humber and Tees Valley came together to launch the Northern Powerhouse Investment Fund. During this time, NPIF investment has played an important role in bolstering regional economic diversity by delivering finance beyond the prominent Northern cities.
As much as 68% per cent of NPIF investment has gone to businesses based outside the major cities and their surrounding areas, through its network of fund managers spanning across the North, into coastal and rural areas.
In the past, coastal towns played an integral part in the UK’s economy, layered with a rich history of industry and tourism. During the decades of the 1950s and 60s, British holidaymakers flocked to the coast, and the tourism and hospitality industries flourished, forming the lifeblood of seaside towns.
Coastal towns like Seaton Carew, Morecambe, and Blackpool have a long and storied history, but they have also faced significant economic challenges in recent times. The decline of traditional industries like fishing and manufacturing, as well as the closure of traditional tourist attractions, has left many of these towns struggling to attract investment and create new jobs. However, these towns have also shown remarkable resilience, adapting to changing economic conditions, attracting funding, and finding new ways to generate revenue.
What problems do coastal towns face?
Seaside tourism has always been seasonal in nature and, to a degree, dependent upon good weather. These shortcomings have been further exacerbated by the general decline in visits to the British seaside, increasing competition from other attractions in the domestic visitor economy, and an ever-evolving international tourism market.
Although many of these challenges may be common to other non-coastal areas, seaside towns are often labouring with additional limitations due to peripherality and inadequate transport connectivity, hindering the realisation of their economic potential.
The most recent analysis on coastal towns in 2020 revealed that coastal towns are more likely to have higher levels of deprivation than non-coastal towns.
Along the East coast of England, the share of coastal towns in the higher income deprivation category is particularly high at 85% (39 towns out of 46). It is also high in the North West of England at 76% where 16 out of 21 coastal towns are in this category.
Coastal towns must therefore work to develop a thriving local economy. A key decision to consider is whether to focus efforts on revitalising the local tourism economy or throw their efforts behind diversification. In either scenario, access to finance is a crucial factor for the growth of these deprived coastal towns.
A new era of redevelopment and regeneration?
Deprived seaside towns have been seeking to undertake regeneration projects, including by way of various funding streams and local delivery structures.
One coastal town that has successfully secured investment for redevelopment is Morecambe in Lancashire. The town is set to receive a massive investment for redevelopment for the Eden Project, a world-renowned ecological and environmental organization. It has been awarded £50m in the second round of the UK Government’s Levelling Up Fund, and the investment has the potential to transform Morecambe’s economy, creating new jobs and attracting visitors from across the UK and beyond. Morecambe’s investment may serve as a model for other coastal towns looking to secure investment for redevelopment.
A significant regeneration project that will deliver new leisure facilities, create jobs, boost tourism, and help level up Blackpool was announced last year. The entire £300 million private sector-led regeneration scheme will go ahead thanks to a £40 million investment from the Department for Levelling Up, Housing and Communities which will move the Magistrates and County Courts currently situated within the proposed site and allow for the Blackpool Central regeneration scheme to go ahead as planned. It will create an estimated 1,000 jobs and will also attract 600,000 more visitors to the seaside town each year in a massive boost to the local economy.
Towns like Blackpool also have an ambitious network of entrepreneurs seeking investment. Many businesses located in rural and coastal towns in the North have experienced growth through the effective utilisation of funding from the Northern Powerhouse Investment Fund. REAX, a specialist access and rescue training company based in Blackpool, is a prime example. In 2018, the company secured a £35,000 loan from NPIF – River & GC Microfinance, facilitated by GC Finance. With the financial assistance, REAX has expanded its team of external specialist training instructors, established new facilities, and launched a mobile training unit that can be deployed on client sites across the country.
Another business recently secured funding from the Northern Powerhouse Investment Fund is Raithwaite Sandsend, a coastal retreat located in Whitby which experienced a resurgence after securing a £250,000 investment from NPIF and Business Enterprise Finance. This financial boost enabled the hotel to maintain its operations amidst the COVID-19 pandemic, and it has since set its sights on expanding its facilities. By September 2022, the hotel had achieved complete carbon neutrality and launched its organic kitchen garden in late 2021 to source ingredients for its menu.
There is no doubt that with proper support and investment, seaside towns have substantial capacity to flourish and expand. These successful regeneration projects and ambitious businesses exemplify the potential for deprived seaside towns to not only survive but thrive with proper support and investment and may serve as inspiration for other coastal communities looking to achieve similar success.
What lies on the road ahead?
Looking ahead, the road for coastal towns appears to be one of vast opportunity, particularly with a renewed focus on redevelopment and regeneration. The recent investment in towns like Morecambe and Blackpool, as well as the success of ambitious businesses like REAX and Raithwaite Sandsend, demonstrate the potential for deprived seaside towns across the North to not only survive, but thrive.
Access to finance remains a crucial factor in the growth of these towns, and it is heartening to see various funding streams and local delivery structures being utilized to undertake regeneration projects. Morecambe’s successful securing of investment for the Eden Project and Blackpool’s private sector-led regeneration scheme are just two examples of how investment can transform a town’s economy, create jobs, and boost tourism.
The recent successes of REAX and Raithwaite Sandsend demonstrate the potential for ambitious businesses to thrive in coastal towns, but proper support and investment are necessary. With proper investment and support, there is no doubt that seaside towns can flourish and expand, offering a wealth of opportunities for regeneration and growth.
By leveraging the Northern Powerhouse Investment Fund and other government support, establishing community-led funding initiatives, and developing partnerships with private investors, these towns can overcome the challenges of accessing finance and create new opportunities for growth and development.
It’s testament to the strength of the NPIF network that investment has been delivered to all corners of the Northern Powerhouse region. The partnership between each of the LEPs, Combined Authorities and the NPIF fund managers has been the bedrock to making this regional economic diversity possible.
Ensuring that investments reach all businesses, regardless of size or sector, and are distributed evenly across all regions is crucial. This is not limited to big cities alone, but also extends to the towns, rural areas, and coastal regions for which the North is renowned.
The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.
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