SCOTLAND has retained its status as one of Europe’s leading financial centres and the second largest international financial hub in the UK after London, with financial and related professional services employing 136,000, representing 5.2% of total employment, and contributing almost £14.3bn (9.6%) to the Scottish economy in 2021, according to a new report from TheCityUK.
The report, ‘Enabling growth across the UK’, provides the latest available data (2021) and analysis on the financial and related professional services industry’s contribution to the UK’s regions and nations. It also provides policy recommendations for governments on how to further unleash the industry’s potential to drive growth across Scotland and the rest of the country.
Edinburgh and Glasgow continue to be Scotland’s major industry hubs, employing 48,030 and 36,950 respectively. In Edinburgh, the industry contributes almost 30% to the local economy and employs 13% of its workforce. In Glasgow, banking and insurance are the dominant sectors and together account for over 60% of the industry’s gross value added in the city. Aberdeen and Fife are also large industry employers.
Sandy Begbie CBE FRSE, Chief Executive Officer, Scottish Financial Enterprise, said: “The financial and related professional services industry is a significant contributor to our national economy, and it delivers real opportunity and prosperity for Scotland. We have distinctive strengths as a financial centre and over many years, the industry has proven itself to be resilient and innovative. There’s so much more potential to unlock. Our sector-led growth strategy is a key priority for SFE this year, working with both governments, TheCityUK, and other key bodies to foster a culture of ambition and innovation, and specific plans that will keep us at the cutting edge in the global financial landscape.”
Miles Celic, Chief Executive Officer, TheCityUK, said: “Financial and related professional services are an engine for growth and enabler for the wider economy. The industry’s continued strong contribution to Scotland’s economy and international financial stability underlines its status as a national success story. The growth in industry employment in Scotland over the past decade also reflects the significant investment made by firms and their commitment to building a strong pipeline of talent. But there is more that can be done to enable the industry to support faster growth across the country. By working together with governments, our industry can make an even greater contribution to national growth and prosperity.”
Diversity and innovation form the bedrock of Scotland’s financial services industry, from banking, life assurance, and pensions to investment management, wealth management, and asset servicing. The financial landscape encompasses a wide spectrum of strengths including general insurance, corporate finance and broking services sectors, in addition to a strong community of professional advisors and suppliers.
In its report, TheCityUK sets out a series of policy recommendations for governments focusing on devolution, people and prosperity:
· Maximise opportunities from devolution to drive growth: Scotland has significant potential to make use of the increased devolution it has relative to other parts of the UK to maximise growth for the industry – especially given its maturity and reputation as an established financial centre. Leaders should engage with business, develop shared plans to drive growth and be held accountable for their delivery.
· People: Government and industry should agree and jointly deliver skills action plans that ensure the future workforce is fully equipped to meet the changing needs of the economy, while also supporting wider social benefits through ensuring people from all backgrounds have clear pathways to enter the industry and are encouraged to do so. Greater flexibility and funding for reskilling and upskilling is important. At a UK level, the Apprenticeship Levy should be reformed to ensure that the scheme is more flexible and better meets future skills needs and challenges.
· Prosperity: There should be a more coordinated approach to attracting investment and recognition of the importance of supporting industry hubs around the country. This means that as well as a national growth and promotion strategy for the industry, plans should be drawn up at regional economy level, especially for Edinburgh and Glasgow, to support their continued competition as leading financial hubs with distinctive strengths.
