The deputy Prime Minister has for some time been calling for a rebalancing of the UK economy. The ultimate objective is to drive increased activity across the “regions” to counterbalance the growth in the City the South East, and also to promote diversification of the economy in order to reduce the UK’s reliance on the Financial Services sector.
FS contributes £126.9 billion in GVA
In support of this initiative, a recent Parliamentary report has illustrated very clearly the role the Financial Services industry plays in supporting UK economic growth and generating tax revenues. At a high level it shows that in 2014 the Financial Sector contributed £126.9 billion in gross value added (GVA) – that’s 8% of the UK’s total GVA. And this figure may in fact underestimate the true value of the Financial Services sector because it fails to account for the multiplier effect that takes place when access to credit by business and consumers helps to fund growth in other areas.
8% sounds a great deal for a single sector, yet the contribution reached a height of 9.3% in 2009 after a period of recovery following the financial crash. Since then, growth in real terms has been sporadic, with total GVA still below pre-crash levels. Yet perhaps the most notable, though not unexpected, revelation in the findings is the regional disparity of Financial Services activity. London is the hub of the global Financial Services industry, so it comes as no surprise that the City leads the way in revenue generation, but the degree of imbalance is remarkable. According to the Office for National Statistics, London and the South East are responsible for 60% of GVA generated by financial and insurance activities.
London – a unique asset
Of course, there are two ways to look at this statistic. One is to conclude that the regions have been underperforming. The other is to recognise the outstanding performance of City firms, and this second view is perhaps the fairer. One of the factors underpinning this remarkable performance is London’s ability to attract world-leading talent. City-based firms, supported by specialist Financial Services headhunters, have an advantage over businesses located elsewhere around the globe, simply because of London’s position as a preferred place of residence. This special asset has created a virtuous cycle of growth, whereby City firms are able to recruit leading talent which in turn supports stronger performance, resulting in further recruitment.
Financial Services Executive Search
This ability to recruit top talent from around the globe should not be underestimated as a driver of London’s success. In 2014, the UK Financial Services industry employed 1.1 million people, that’s 3.4% of the total UK workforce. This demand for skilled staff has heightened competition for talented Financial Services professionals, which has increased the reliance on experienced Financial Services Executive Search firms to find and recruit them. Stone Executive leads the way in Financial Services Executive Search. Our Financial Services headhunters have an in-depth knowledge of all FS sub-sectors, from capital markets to corporate finance, and they boast a professional network that spans financial centres around the globe.
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