SCOTLAND remains a significant financial centre, the second largest financial and related professional services hub in the UK after London. In Scotland, the industry employs 145,000 people, representing 5.9% of employment, and contributes almost £14bn (9.6%) to the Scottish economy, according to a new report published today by TheCityUK.
The report, ‘Enabling growth across the UK 2022’, provides data on financial and related professional services employment and the industry’s economic contribution in Scotland . It also makes recommendations for how the industry can further support growth across Scotland and the wider UK.
The strength of Scotland’s financial services sector lies in its diversity and strong track record of innovation. Edinburgh and Glasgow are the major centres for financial and related professional services, with industry employment at 48,325 and 38,200 respectively.
Edinburgh is an important international financial centre with a strong presence in banking, life insurance and investment management activities; Glasgow has strengths in general insurance, asset administration, legal services and accountancy.
While London remains the UK’s largest financial centre, two thirds of the more than 2.2m industry jobs are found outside the capital in towns and cities right across the UK. Similarly, almost half the industry’s £238bn of economic contribution (GVA) comes from outside London.
Sandy Begbie CBE, Chief Executive Officer, Scottish Financial Enterprise, said, “This report shows that not only are financial and related professional services an important part of the national economy, but also deliver real opportunity and prosperity for Scotland. Scotland’s financial centre has a long history of innovation, and it is currently becoming a global leader in FinTech. If our industry is to continue to thrive in Scotland, with all the benefits that brings, we need to see industry and government at all levels working together to generate greater productivity and to empower regional economies with the right investment in skills and infrastructure.”
Miles Celic, CEO of TheCityUK, said: “The financial and related professional services industry is a true UK-wide success story, one that brings growth and jobs to all parts of the UK, including Scotland. While the last 10 years have seen tremendous regional and national growth for the industry, we are confident it can do even more to boost investment and continue to drive productivity growth in Scotland and across the other nations and regions of the country. Businesses want to work more closely with regional and national administrations to realise the shared goal of levelling up all parts of the UK.”
To encourage the industry’s role in the wider economy, TheCityUK has set out a series of policy recommendations where national and regional administrations and industry can partner to deliver progress on devolution, skills, infrastructure, and international trade.
Devolution and engagement
- Now is the time to accelerate devolution in the regions and nations.
- Simultaneously, more power should be devolved to metro mayors and combined authorities.
- Devolution deals should be as standardised as possible so there are clear expectations about which policy areas sit with national government and which with regional leaders.
Skills and talent
- Central government should devolve much more power and funding around skills policy to local and regional governments who are best placed to know what their area needs.
- The government should reform the apprenticeship levy system to ensure that it is more flexible and can better meet the challenges of tomorrow.
Infrastructure and investment
- The government should commit to delivering the HS2 project as soon as possible and look at other transport investment – particularly on the rail network – to join up towns and cities across the UK.
- The government should use every tool at its disposal to deliver additional quality and affordable housing at strategic locations close to business hubs around the UK.
Driving growth through international trade and green industries
- The government should use its resources and expertise to partner with the regions to develop and support export strategies that can be delivered on a place-by-place basis, taking advantage of local strengths and connections.
- The government should work urgently to identify the structures that can help promote sustainable investments over non-sustainable ones and consider how the tax system can be used to incentivise the journey to net zero.