Financial and related professional services productivity per worker in the West Midlands (£89,680) was nearly twice as high as productivity in the region’s economy as a whole (£50,774) in 2019, according to a new report from TheCityUK. This pattern is mirrored across the UK as a whole, 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:
- 127,000 people are employed in the financial and related professional services industry in the West Midlands. The West Midlands has a significant concentration of activity in banking and management consulting.
- Birmingham is a significant centre for financial and related professional services outside London, employing 46,850 people. Of these, the largest proportion work in banking, followed by accountancy.
- Birmingham’s status as a major financial centre was cemented when HSBC moved its UK headquarters to the city in 2018. Goldman Sachs also recently opened its largest office outside of London in Birmingham. The global law firm DLA Piper has also moved into new Birmingham offices this year. The city is host to a number of other professional services firms including PwC, Deutsche Bank, Deloitte and EY.
- The industry is responsible for 6.3% of the region’s GVA, and 4.7% 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.
Andy Street, Mayor of the West Midlands, said, “We can’t level up without the support of the financial and related professional services industry. It provides high-quality, high-wage jobs across the breadth of the country, and 127,000 of those are right here in the West Midlands. It’s the oil in the engine for the rest of the economy – providing the finance for all kinds of other businesses to get off the ground and grow, and supporting people in their everyday lives.”
Sandra Wallace, TheCityUK City Chair for Birmingham and Joint Managing Director, UK and Europe, DLA Piper, said, “Birmingham’s position as a key hub for the financial and related professional services industry has been underlined by decisions made by HSBC, Goldman Sachs and others to focus on growth in our region. Our industry already employs 127,000 people in the West Midlands and it will continue to play a key role in making the goal of a high-skills, high-wage economy a reality, but getting the right support and investment from government will be essential.”
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.
- 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 achieve 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 continuous dialogue with the local industry cluster. Further devolution to these defined places should proceed at pace.
Find out more about the Financial and Professional Services sector in the West Midlands.