Levelling up through a purpose-led approach to finance

  • Living standards and Levelling up

Laila Page (Head of Sustainable Banking, Performance and Frameworks), Natwest 

In this piece Laila Page, Head of Sustainable Banking, Performance and Frameworks for Natwest, describes the role of purpose-led banking in levelling up and the need to ensure that private sector finance reaches the areas and regions where it is needed most.  The piece also highlights the practical value of social science research by demonstrating how Natwest uses it to guide key elements of its business practice.

The levelling up white paper (LUWP) (2022) published in February offered some much needed clarity and definition around the aims of the UK government’s flagship domestic policy agenda. Importantly, it identified the need to ensure that economic opportunity is distributed more evenly across the country. A serious, government-wide programme to address this challenge is overdue; for too long, the economic prosperity of the UK has been held back by entrenched socio-economic regional inequalities.

At NatWest Group, we welcome the direction of travel and the objectives set out in the LUWP. The renewed focus on the ambition to spread opportunity more equally across the country aligns strongly with NatWest Group’s purpose-led commitment to champion the potential of people, businesses and communities in every region of the UK. As one of the UK’s largest banks, with a long-standing history of supporting the regional economies, we recognise the role we can play in levelling up the country. Indeed, we believe that we have an important responsibility to do so.

The LUWP was not accompanied by the provision of significant additional public funding directly aligned to support the government’s levelling up objectives – meaning that there is a clear need for private sector finance to step in and fill this gap. As set out below, this is something that NatWest Group is committed to doing, particularly through the support we can provide to the nation’s Small and Medium-sized Enterprises (SMEs) in every part of the country to reach their full potential. But we believe that our role can and should go further than this. As a purpose-led bank, it isn’t enough to be only a provider of funds or a corporate donor playing a philanthropic role. With 19 million customers and around 40,000 colleagues in the UK, we benefit from being part of a broader network, and believe we have a duty to pay this forward by acting as a convenor and connector for the communities we serve. As a bank we have the ability to help, not just by providing the finance to access growth opportunities, but by making introductions, building capability and sharing best practice and insight on the interventions that can increase the ability of regions and their residents to make a step change in how they maximise their unique strengths.

Supporting enterprise

Any ambition to level up the UK will rely heavily on boosting the fortunes of our SMEs (firms with 1-249 employees) – particularly when it comes to improving both their access to finance and productivity performance. The UK’s 5.9 million SMEs are the lifeblood of our economy, driving almost half of UK turnover and 60% of employment (LUWP). And we know that the proportion of the workforce employed by SMEs can be much higher that this in some local areas.

It is welcome that the LUWP acknowledges the importance of SMEs in driving levelling up and also emphasises the central enabling role that the financial sector has to play in helping them to reach their full potential. As the white paper also notes, bank lending represents the main source of financing for SMEs (LUWP, p66), but there are “sharp differences in access to financial capital across different parts of the UK”, particularly for businesses located outside the South East of England. At NatWest, we have made removing barriers to enterprise a key strategic priority. With access to about 1 million SME customers across the UK, we have a unique vantage point on this issue. The additional value that SMEs can deliver for the economy is clear. Our Springboard to Recovery research (2021) has shown that a thriving SME sector could deliver as much as £140 billion in gross value added (GVA) to the UK economy by 2030 – equivalent to creating 3.2 million jobs across the UK.

Central to levelling up will be boosting and making regional productivity performance across the UK less unbalanced. To achieve this, we need to help SMEs become stronger, faster growing and more productive.

We believe that there are a number of distinct areas where action needs to be taken to help SMEs realise their full potential. This is set out in more detail in our report (2021), but the areas include: productivity; female entrepreneurship, diversity of entrepreneurship, supporting scale-ups, and helping SMEs to drive the transition to net zero.

The opportunities are significant. The report Time to Change (2022) – a result of our collaboration with Aston University’s Centre for Research in Ethnic Minority Entrepreneurship – identifies the multiple barriers faced by ethnic minority businesses, particularly when it comes to accessing finance, markets and quality business support. The report makes recommendations to tackle these barriers which, if implemented, it is estimated could increase the GVA contribution of ethnic minority businesses from the current £25 billion a year to £100 billion.

And when it comes to tackling the climate challenge, we know that SMEs can deliver half of the UK’s carbon reduction ambition – highlighting the crucial role they have to play not only in the drive to level up the country but also to support the transition to net zero. Our Springboard to Sustainable Recovery research (2021) has shown that if the opportunities for SMEs to support the transition to net zero are realised: there is a £160 billion revenue opportunity; 130,000 new jobs could be created; and 30,000 new companies could be created.

We are committed to working in partnership with the UK Government, business bodies, charities and other financial services providers to help level up the SME landscape. To do this, we collectively need to make it easier for SMEs to access the finance they need, and we must focus in particular on helping them to achieve a step-change in their productivity performance. Unlocking the untapped potential outside London will be key. That’s why at Natwest Group we have committed £6 billion to support SMEs to scale and grow – with £4 billion of this allocated to funding enterprises located outside London.  We’ve also launched Regional SME Transformation Taskforces to drive forward the SME agenda.

Building thriving communities

Understanding the needs of the customers we serve is at the heart of what it means to be a purpose-led bank in the modern world. This is also true for the communities in which we operate. Only by embedding ourselves in these communities can we build the relationships required to understand and support the specific needs of the local areas we serve.

One of the core missions set out in the LUWP is to “improve pride in place in every area of the UK” by 2030. This is an ambitious undertaking, and it is an important one. While perhaps not traditional territory for a bank, we have carried out some detailed work on this recently at NatWest Group. In particular, we have been working to understand what it means for a community to be “strong”, and in turn what underpins community strength. These topics go hand in hand – building community strength will clearly be critical to deliver on the ambition of improving pride in place.

Last year, we sponsored research carried out by the Centre for Social Justice (CSJ) looking at this issue. The CSJ published a major report with their findings, titled “Pillars of Community” (2021), exploring what needs to be done to build community strength and help communities to thrive in the wake of the COVID-19 pandemic. The research found that “all sectors – including public, private and charitable/voluntary – are seen as holding responsibility for strengthening community life”. We certainly share this view. At NatWest, we have long understood the value and importance of taking the local approach – recognising that different regions and communities require different levels and types of support. Our commitment to this diversity of approach can be seen in our seven Regional Boards covering London & South East, Midlands & East, North, South West, Northern Ireland, Scotland and Wales. Each Regional Board brings together senior leaders from across the organisation to engage with stakeholders at a local level, while also ensuring the effective and impactful delivery of our national strategy at a regional and local level.

And there are further practical steps that we continue to take to play our part in building stronger communities. While research has shown that affluence is not necessarily a good predictor of community strength (Pillars of Community, 2021), it is intuitively the case that financial resilience matters. That’s why we’re helping young people to build their financial capability through our flagship learning programme MoneySense. Since it launched in 1994 we have upskilled 10 million young people, reaching 1.2 million in 2021 alone. When it comes to providing “pathways to participation” (Pillars of Community 2021), our new CareerSense programme, launched last year, provides free-to-access tools to develop critical skills and support youth employability prospects for 13 to 24-year-olds – especially for those from low-income families and Black, Asian and Minority Ethnic backgrounds. And we continue to support our adult customers to make the most of their money, whether that’s by helping them on to the housing ladder, helping them to grow their savings or by providing free Financial Health Checks.


The government’s levelling up ambitions are bold and cover a broad range of policy areas – these should be welcomed. However, each research report we sponsor or produce contributes to the growing body of evidence that we are more likely to build successful solutions when we approach barriers systemically. No one actor is accountable across that system, nor can one actor deliver comprehensive change on their own. Effective and lasting solutions need a collaborative, cross-sector, economy-wide approach to deliver on levelling up. Government, UK business and the charitable sector all have an important role to play. As a purpose-led bank, NatWest Group is determined to play its full part in this ecosystem. We will do this not just through funding but by also focusing on our strengths as a convenor, influencer and connector – helping to shape an environment in which communities are provided with the tools they need to help themselves to thrive and where our SMEs are given the support they need to realise their full productive potential.

Photo Credit: Patrick Tomasso on Unsplash

About the author

A lawyer by background, before becoming Head of Sustainable Banking, Performance and Frameworks at NatWest, Laila has held various roles in NatWest including Head of Legal, Commercial Bank and Chief of Staff Commercial and Private Banking.