The UK is preparing to inject a further £100 million into the country’s early-stage investment market, with the government seeking to widen access to venture capital and encourage the
creation of new funds outside London.
The next phase of the British Business Bank’s Investor Pathways Capital Initiative is expected to support as many as 10 new venture capital funds across the UK. The programme is designed to give promising businesses access to the early investment they need to scale, while strengthening regional economies and creating jobs.
The initiative is part of a planned £400 million investment programme aimed at supporting first-time venture capital fund managers from a broad range of backgrounds. The government says the approach will help channel more private capital towards innovative companies at a stage when access to finance can determine whether they remain small or develop into major employers.
The move comes as businesses across Britain continue to face higher operating costs and pressure on investment. Ministers argue that increasing the flow of capital into companies outside the capital is essential to spreading economic growth more evenly across the country.
Chancellor John Healey said wealth creation was among his priorities and that government support should extend to businesses investing in people and local economies.
“The £100 million boost will help provide the fuel to drive new life into local economies up and down the country,” he said.
The British Business Bank has already committed up to £90 million to 10 new microfunds under the first cohort of the Investor Pathways programme. Applications for the next cohort, which forms part of the new £100 million deployment, are due to open in autumn 2026.
Economic Secretary to the Treasury Lucy Rigby said the government wanted to see growth “in every postcode”, arguing that businesses needed reliable access to finance if they were to innovate, expand and create jobs.
The announcement was accompanied by a regional push to strengthen links between government, investors and businesses. Rigby visited Sheffield and Leeds to meet companies, lenders and investors from across Yorkshire, with discussions focused on how the British Business Bank and the private sector can improve access to growth capital.
The government says the regional approach is part of a wider effort to reshape Britain’s business finance system and ensure companies can secure funding at different stages of development, from start-up through to scale-up.
It follows commitments made at Mansion House aimed at strengthening the UK’s investment ecosystem and increasing the flow of capital into productive businesses.
The government is also expanding the Growth Guarantee Scheme. Recent reforms are expected to increase lending capacity by a further £2 billion a year by 2028/29 and enable an additional 12,000 smaller businesses to access finance annually.
The changes include longer loan terms and wider eligibility criteria, with ministers arguing that the scheme will give more companies the confidence and financial capacity to invest, expand their operations and take on new workers.
The British Business Bank is at the centre of the strategy, providing support through debt finance, venture capital and targeted investment programmes. Its recent investments have included technology companies, new venture capital funds and businesses in communities that have historically struggled to attract investment.
For the government, the objective is increasingly clear: reduce the concentration of investment in London and build a funding network capable of supporting ambitious companies across England, Scotland, Wales and Northern Ireland.
The test will be whether the additional capital reaches businesses with the potential to grow — and whether regional investment can translate into the jobs, productivity and local economic activity ministers are promising.
