Greater regional decision-making will have a positive impact on business growth, according to research from accountancy and advisory firm BDO LLP.

North West business leaders believe that giving regional mayors and local authorities increased fiscal powers will boost growth over the next three years, with the majority (87%) backing a shift in decision-making.

The call comes as Prime Minister Andy Burnham rolls out plans to give power to ‘every postcode’ in a renewed focus on regional mayors and the key role they will play in UK policy decisions.

The BDO bi-monthly tracker covering 500 mid-market businesses with revenues between £10m and £500m, also reveals that appetite to invest has increased for four in five (81%) mid-sized North West businesses over the past three months.

According to the research, more than two-fifths (45%) plan to invest or expand in the North over the next two years, closely followed by London and the South East (40%).

When asked which sectors North West business leaders see the most potential to drive economic growth over the next five years, nearly a third (29%) identified the hospitality and leisure industry, together with financial services (29%), and construction (29%). This comes as the hospitality sector saw a strong performance over the summer, benefiting from increased domestic tourism and a World Cup bounce.

Despite a more positive outlook, mounting supply chain costs and disruption (cited by 49%), together with higher taxes (37%), are the top challenges that risk holding back growth in a segment responsible for over £1.8 trillion in revenues and more than one in three private sector jobs.

Looking ahead, the Autumn Budget will determine whether renewed confidence translates into long-term investment. The areas North West businesses want to see the government prioritise to drive growth include simplifying the tax system and providing greater certainty on future tax policy, as well as reducing business energy costs and improving energy security.

Regional businesses also highlighted where the government should focus specific funding to boost the economy. Two in five are calling for increased business grants (41%), nearly a third want to see more attractive government backed loans (31%) and a quarter (25%) want the government to take equity stakes in strategic businesses.

Angela Cross, Regional Managing Partner at BDO in the North West, said: “The government is making all the right noises when it comes to creating the conditions for good growth in every part of the UK.

“Regional business leaders clearly agree that by giving regional mayors and local authorities greater control over locally raised tax revenues it will positively impact business growth over the next three years. The key now is making those pledges a reality in a way that flows meaningfully through the regional business community.”

She added: “The North West mid-market wants to invest, expand and continue to be a powerful driver of jobs and revenue growth in the UK. Supporting them to do that is a no-brainer. The upcoming Budget is a crucial moment to provide businesses with much needed certainty and confidence.”