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

Yorkshire business leaders believe that giving regional mayors and local authorities increased fiscal powers will boost growth over the next three years, with nearly three-quarters (71%) 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 two-fifths (42%) of mid-sized Yorkshire businesses over the past three months.

According to the research, seven in ten (71%) plan to invest or expand in the North over the next two years, followed by London and the South East (42%).

When asked which sectors Yorkshire business leaders see the most potential to drive economic growth over the next five years, nearly three-quarters (71%) identified the financial services industry, together with manufacturing (42%), and retail and wholesale (42%).

Despite a more positive outlook, increased employment costs and skills shortages (29%) and mounting supply chain costs and disruption (cited by more than one in ten), are some of 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 Yorkshire businesses want to see the government prioritise to drive growth include reducing employment costs, such as National Insurance, as well as improving access to finance and capital for growing businesses.

Regional businesses also highlighted where the government should focus specific funding to boost the economy. More than half are calling for improved local infrastructure (58%), with more than a quarter (29%) wanting the government to take equity stakes in strategic businesses.

Dan Brookes, Interim Regional Managing Partner at BDO in Yorkshire and the North East, 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.”

He added: “The Yorkshire 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.”