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How the finance sector can drive prosperity across the UK

Financial and related professional services play a crucial role in economic growth.

By Miles Celic

The UK faces profound and far-reaching public policy challenges. The consequences of the pandemic, exacerbated by the illegal Russian invasion of Ukraine, have added to and deepened a range of pre-existing economic and social issues. For many people, they’ve felt this directly through the impact on the cost of living.

The need to boost economic growth is clear. The role of financial and related professional services is crucial in helping to deliver it.

Ours is an industry that both fuels and enables other parts of the economy, and delivers jobs and prosperity across the UK. It is supporting the transition to net zero and leading global innovation in emerging sectors like fintech, as well as supporting people in their everyday lives to buy a home, start a business or save for retirement.

The latest edition of our “Enabling growth across the UK” report sets out our industry’s contribution across the country’s regions and nations. We employ 2.5 million people – around one job in every 13 in the UK. Two thirds of these jobs are based outside of London, with the north-west being the second-biggest centre for financial and related professional services jobs in the country. Of the 390,000 jobs created in the decade to 2021, more than half were outside of the M25. London is a great asset for the UK, but almost half of our industry’s exports come from outside the capital. Financial and related professional services are a true national success story.

But it has the potential to make an even greater contribution. There are three areas for reform that could help supercharge growth and provide more opportunities to unlock the industry’s potential across the country.

More devolution to boost the economy

We believe that greater devolution across the UK – especially in the English regions – will help further unlock growth. But, where possible, there should be greater consistency in the powers offered to each area to create a greater certainty for business to grow.

For example, a major business operating in one part of the country can engage with its local mayor on key issues such as skills policy and trade promotion, in a way that a major business operating in another area cannot.

This inconsistency across different areas leads to cost, complexity and uncertainty. More powers and the right organisational infrastructure will make it easier for authorities to deliver the coordination and leadership needed to maximise growth.

Reforming skills and apprenticeships to enhance opportunities

Local policymakers and business leaders are best placed to identify the skills that are needed in their areas, particularly when they have clusters in specialist sectors such as fintech or lawtech.

That’s why we need further devolution of education policy and funding to mayoral combined authorities in future English devolution deals, with local leaders taking a greater role in oversight of education.

Further reform of the apprenticeship levy is also overdue. We need improved access for smaller firms, alignment of systems across the home nations, and for businesses to have more say on the duration and timings of when they bring on an apprentice.

More effective local infrastructure and helping the regions attract international investment

Connectivity within the UK and with key international markets is critical for business. We need more effective digital and transport infrastructure to enhance the connectivity of thriving regional hubs and support greater growth across all industries.

We should also view the devolved leaders’ recently announced role in trade promotion as a pilot for extending this remit to other local areas, and make enhancing trade and investment across the UK a priority for all future trade agreements and memorandums of understanding.

What now?

The financial and related professional services industry is a national asset that drives employment and prosperity in every part of the UK. These are good-quality jobs and careers with some of the world’s leading firms and some of our most exciting start-ups.

Beyond its significant role as a major national employer and focus on supporting people and businesses, there is significant opportunity for our industry to play an even bigger role in driving growth and unlocking potential in every region and nation of the UK. We will keep working with policymakers, regulators and local leaders on this transformative agenda to help forge a sustainable future for all.

[See also: How will we reach net zero?]