4th May 2023
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NPIF investment has been instrumental in promoting regional economic diversity by providing funding to businesses beyond the major Northern cities. A significant portion of NPIF investment, up to 68%, has been directed towards businesses located outside the major cities and their surrounding areas. This has been made possible through NPIF’s network of fund managers, which spans across the North, including coastal and rural areas.
Coastal towns often boast a rich history of industry and tourism and played a vital role in the UK’s economy in the past. However, these towns have faced significant economic challenges in recent years. Despite this, NPIF has continued its work, generating investment across the North, and supporting SMEs in the North West, Yorkshire & Humber and Tees Valley regions.
What’s the challenge for coastal towns?
The issue of coastal towns is a multi-faceted one. Tourism in seaside towns is seasonal and relies heavily on consistently favourable weather – a rarity for the UK. Unfortunately, this is not the only problem these towns are facing. Coastal tourism has been in decline for some time, with competition from other domestic attractions and the ever-changing global tourism market.
Seaside towns face additional challenges due to their peripheral location and limited transport links from bigger cities, which hinder their ability to reach their full economic potential. Recent analysis in 2020 shows that coastal towns are more likely to experience higher levels of deprivation compared to non-coastal towns.
In particular, the East coast of England has a significant share of coastal towns in the higher income deprivation category, with 39 out of 46 towns falling into this category. Similarly, 16 out of 21 coastal towns in the North West of England are in the same category.
It is therefore essential for coastal towns to focus on developing a thriving local economy, and a critical decision to consider is whether to concentrate on revitalizing the local tourism industry or diversifying efforts. However, regardless of the approach taken, access to finance is a crucial factor for the growth of these deprived coastal towns.
Prosperity lies on the road of investment
Seaside towns across the North have been striving to redevelop and regenerate themselves as local businesses grow with the help of various funding streams and local delivery structures. These efforts have been met with great success, with many businesses located in these areas experiencing growth through the effective utilization of funding from the Northern Powerhouse Investment Fund.
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.
Raithwaite Sandsend, a coastal retreat located in Whitby, is another business that has also benefited from funding from the Northern Powerhouse Investment Fund. A £250,000 investment from NPIF and Business Enterprise Finance enabled the hotel to maintain its operations amidst the COVID-19 pandemic and expand 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.
It’s clear that with proper support and investment, seaside towns can become a hotbed for regional innovation and business. The success of these ambitious businesses is a testament to the potential for deprived seaside towns to thrive with the right support and investment. We hope these success stories will serve as inspiration for other coastal communities looking to achieve similar success.
What’s to come on the road ahead?
As we look ahead, the prospects for coastal towns appear to be full of potential, particularly with a renewed focus on providing access to funding. Recent investments in coastal towns and the success of ambitious businesses like REAX and Raithwaite Sandsend demonstrate that deprived seaside towns can not only survive but also thrive.
Access to finance remains a crucial factor in the growth of these towns, but it is encouraging to see various funding streams and local delivery structures like NPIF being utilised by local businesses to reach their ambitions and growth potential.
The successes of REAX and Raithwaite Sandsend show the potential for ambitious businesses to thrive in coastal towns, but proper support and investment are necessary. There is no doubt that seaside towns can flourish and expand, offering a wealth of opportunities for 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 expansion and development.
The strength of the NPIF network has been instrumental in delivering investment 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 foundation for making this regional economic diversity possible.
Ensuring that investments reach all businesses, regardless of their 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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