UK’s financial hubs outside London must be protected from uncertainty, warns report

A new report has underlined the important role UK-based financial and related professional services play in underpinning prosperity in Britain’s nations and regions and the danger to it posed by uncertainty.

Of the 2.2 million people working in the industry, the majority (1.5 million, or around two-thirds) work outside London, with hubs like Edinburgh, Glasgow, Birmingham, Bristol, and Manchester home to more than 30,000 financial and related professional services workers each, the report states.

Together these hubs represent around 7 per cent of the working population, yet contribute nearly 11 per cent (£176bn) of total Gross Value Added (GVA) in 2015.

The report produced by TheCityUK – ‘Enabling Growth across the UK’ – shows that while London remains core to the industry’s strong position, major outlying centres with more than 30,000 people employed in financial and related professional services may be left vulnerable after Brexit.

Overall, 21 towns and cities across the UK have in excess of 10,000 people in employment in the industry and since 2010, 200,000 additional industry jobs have been created across the UK.

The report also highlights where the regions and nations may benefit from shifting trends in globalisation, particularly in relation to reverse-offshoring.

It says that as cost-differentials between the UK and other lower-cost overseas centres narrow, there is an opportunity to retain or ‘win’ back middle and back office functions.

Digitalisation is also cited as a great opportunity for the industry in centres across the country, bringing new high-skilled jobs, the report states. Such jobs have already added £140 billion in value to the economy in new wages over the past 15 years.

Miles Celic, chief executive of TheCityUK, said: “Our report reinforces the value delivered by financial and related services to the whole of the UK economy. Firms from across the world come to Britain to do business, many first putting down roots in London and then expanding their operations across the country, creating a deeper talent pool of skilled workers that benefits local and national businesses.

“In turn, strong regional financial centres like Edinburgh, Manchester and Birmingham, boost the attractiveness of London as a global financial centre. Maintaining this ecosystem is critical to ensuring the UK remains a world-leading place to do business.”

The report identifies four key areas for policymakers and other key stakeholders to focus on, working in close partnership with the industry, to maintain the industry’s international competitiveness: