Yorkshire Times
A Voice of the North
4:00 AM 30th November 2021

Financial And Related Professional Services Key To ‘High Wage, High Skill’ Economy In Yorkshire & Humber

Financial and related professional services productivity per worker in Yorkshire and the Humber (£77,755) was higher than productivity in the region’s economy as a whole (£48,652) in 2019, according to a new report from TheCityUK. This pattern is mirrored across the UK, suggesting the industry will be key to delivering on Prime Minister Boris Johnson’s ambition of a “high-skill, high-wage” economy.

TheCityUK’s report, ‘Enabling growth across the UK’, examines the total contribution the industry and its composite sectors make to the UK’s nations, regions, towns, and cities. It shows of the 2.3 million people in industry employment – 1 in 14 British jobs – two thirds of these are based outside London.

Other key findings from the report included:

The region has a strong presence in banking and is an important UK centre for insurance outside London.
Many multinational companies are located in Yorkshire, and Leeds is one of the UK’s largest centres for banking. It is home to 30 national and international banks and has the headquarters of three of the five largest building societies – Yorkshire, Skipton and Leeds. HSBC, with its global IT shared services based in the region, and Santander Group, with its internal contact and service centres are also based in the area. While First Direct, Handelsbanken, Lloyds Banking Group and NatWest all operate significant banking operations in the region.

The region is also an important centre for other financial services, including insurance with Direct Line with offices in Leeds, and Aviva a substantial presence in York.

Leeds is also a significant hub for related professional services with thriving tax and legal, accounting, deals and consulting sectors.

142,000 people in Yorkshire are employed in the financial and related professional services industry. Leeds is one of the UK’s largest centres for banking.
The industry is responsible for 6.8% of regional GVA, and 5.7% of regional employment.

A full analysis of each of the 12 regions and nations of the UK can be found in the full ‘Enabling growth across the UK’ report.

Richard Little, TheCityUK City Chair for Leeds and Head of UK Regional Financial Services, KPMG UK, said: “Levelling Up must move from being a powerful slogan to an integrated set of policy actions if this region is to achieve its potential. The financial and related professional services industry has played a clear role in creating a strong basis for what a high wage, high skill, dynamic Yorkshire & Humber can look like, and now we need the investment in infrastructure, skills and connectivity that can take us to the next level.”

Miles Celic, Chief Executive Officer, TheCityUK, said: “This industry is a significant employer in towns and cities throughout the country providing excellent local employment and career opportunities. As part of our strategy to return the UK to being the number one international financial centre in the world, we want to increase private and public investment in regional skills and infrastructure and further boost our successful regional and national clusters of financial and related professional services expertise. It is through playing to our national strengths in industries like ours that the Prime Minister’s ambition of a high-skill, high-wage, high-productivity economy can be realised.”

The report also found that:

The financial services trade surplus accounted for nearly half of the total surplus of all sectors generating a positive trade balance in 2020.
The financial services sector and the legal and accounting sectors provided £75.6m and £20.5m respectively.
Financial and related professional services contributed £193.8bn to the UK economy in 2019, representing 9.8% of total GVA
Overall, 21 towns and cities in the UK each have over 10,000 people employed in the industry.

TheCityUK makes a number of recommendations to help deliver on the promise of levelling-up including:

Hardwire the concept of levelling up and regional development into the UK’s policymaking machinery, including setting metrics focused on economic opportunities and environmental impact, and including key performance indicators specific to levelling-up for key governmental departments.
Physical and digital infrastructure should be prioritised to connect and transform regions and nations.
The government must ensure that its investment in skills is aligned with the needs of businesses and accessible across the UK, reflecting that two thirds of the 2.3 million people employed in financial services are based outside London.
There needs to be a partnership between government and industry to achieving the shared goal of transitioning the UK to a Net-Zero economy across each of the nations and regions.
Government should accelerate the progress it has already made in ensuring that relevant regulators and central departments establish operations in major financial and related professional services hubs outside London.
Government should dedicate resources – including expertise, marketing collateral and logistical support – to representing major regional clusters, with a view to expanding global networks and client bases across emerging global centres.
Devolving power to a clearly and tightly defined ‘place’, be that a city region, sub-region or a major new town, can ensure decision-making takes place at close proximity and in continued dialogue with the local industry cluster. Further devolution to these defined places should proceed at pace.