bradford district professional and financial services ... · there are currently 3,500 pfs...

BRADFORD DISTRICT PROFESSIONAL AND

FINANCIAL SERVICES SECTOR DEVELOPMENT

Draft Report to City of Bradford MDC Date: March 2014 Ref: BFDMDC-YORE-96NJ3J

ewlocations.com

Table of Contents

BRADFORD DISTRICT PROFESSIONAL AND FINANCIAL SERVICES SECTOR DEVELOPMENT ............................ 1

Table of Contents ........................................................................................................................................ 2

EXECUTIVE SUMMARY ................................................................................................................................ 1

Project Aims ............................................................................................................................................ 1

Profile of Professional and Financial Services ......................................................................................... 1

Future Trends and Opportunities ........................................................................................................... 4

Key Findings ............................................................................................................................................ 9

Key Recommendations ......................................................................................................................... 11

1.0 INTRODUCTION ............................................................................................................................. 15

1.1 The Growth Opportunity of Professional and Financial Services ............................................. 15

1.2 Professional and Financial Services Inward Investment ........................................................... 18

2.0 DATA ANALYSIS - PROFESSIONAL & FINANCIAL SERVICES SECTOR .............................................. 23

2.1 National Workforce Trends ....................................................................................................... 23

2.2 Bradford’s PFS Workforce ......................................................................................................... 23

3.0 PFS SECTOR PESTLE ANALYSIS ....................................................................................................... 26

3.1 Political and Economic Issues.................................................................................................... 26

3.2 Social / Technology Issues ......................................................................................................... 27

3.3 Legal / Environmental Issues .................................................................................................... 28

3.4 Professional and Financial Services Sector in Bradford - SWOT ............................................... 31

4.0 BUSINESS CONSULTATIONS & SECTOR DEVELOPMENT ISSUES ................................................... 32

4.1 Business Growth Issues ............................................................................................................. 32

5.0 PROJECT THEMES AND RECOMMENDATIONS .............................................................................. 39

5.1 General Business Growth Projects ............................................................................................ 39

5.2 Improving the Education-Employment Space .......................................................................... 40

5.3 Promoting Bradford, Looking After Inward Investors ............................................................... 43

Bradford District PFS Sector Development March 2014

East West Locations / Breeze Strategy 1

EXECUTIVE SUMMARY

PROJECT AIMS

This report reflects the findings of a project focused on Professional and Financial Services (PFS) activity in Bradford commissioned by The City of Bradford Metropolitan District Council. The projects aims were to investigate the sector’s main activities in Bradford, understand key changes and future developments relevant to businesses in the sector and, through a series of local and national consultations, recommend initiatives and projects that can help further develop and grow the PFS sector in Bradford. Recommendations for future actions are included in the main report and at the end of this Executive Summary. PROFILE OF PROFESSIONAL AND FINANCIAL SERVICES

PFS activity takes in three broad areas of the economy with specific sub-activities as follows;

• Financial Services - Financial Services, Insurance and Pension Fund activities

• Professional Services - Property, Legal, Accountancy and Head Office activities. Technical Professional Services include Architects, Advertising and Market Research

• Business Services - Employment and Recruitment Services, Leasing, Facilities Management, other office and administrative support

The scale and importance of various activities makes the continued importance of PFS activity to the UK economy clear:

• The UK is the leading global hub for high-end knowledge intensive services, second only to the USA in export volume but three times larger in per capita terms.

• The UK insurance market was the largest in Europe and third largest in the world in 2011. • The UK is the largest source of both insurance funds and pensions in Europe. • Insurance specialisms in both maritime and aviation secure the UK as the single most

important market for these services in the world. • Three of the top five ‘Global 100’ legal firms are UK businesses. • Legal firms are among the top exporters in the PFS sector, with over half of the UK’s top

100 law firm’s revenues being generated by international firms based in London. • The UK currently provides 14% of the world’s share of insurance, computer and

information services. As a result, financial services was responsible for just over 1 million jobs in Britain during 2012. Another 2.4 million jobs arose in professional and technical services and 2.1 million in business services. These activities collectively account for 20.8% of all jobs in the GB economy.



Financial and related services on their own contributed almost £200 billion to the UK economy during 2011, 14.5% of all economic output in the economy. Not only are PFS jobs significant in absolute number, the nature of many jobs in the sector is important too. By occupation, management, professional and semi-professional occupations account for 44% of all UK employees and administrative roles provide 11% of all workforce jobs. The occupational profile of financial, insurance and professional services is significantly different to the rest of the economy. In these activities, 95% of PFS staff fall into the four occupational groups identified above. Due to the unique occupational profile of PFS businesses, the PFS workforce is also relatively well-qualified when compared against other parts of the economy. Over half (52%) of employees possess Level 4 NVQ or degree level qualifications. Qualification levels in the sector have increased over the past decade at a faster rate than in the economy as a whole. Alongside a rise in levels of qualifications held by staff, the range of skills required has broadened in many companies. Specialist technical skills, with internet and e-commerce related elements being especially important, are increasingly in demand. People are at the heart of most PFS businesses and skills are therefore a significant driver of business success and, ultimately, growth. Outside of the dominance of London as a core international financial market, Leeds offers Bradford a significant opportunity to leverage growth opportunities for both indigenous firms and through inward investment activity as a major financial services centre in the UK economy. TheCityUK identified Leeds as a preferred location for financial services companies looking for new locations for key business functions during 2012 due to the existing concentration of activity in Leeds and its surrounding city region. Financial and professional services activity in Leeds alone contributes £3.8bn of gross value added (GVA) to the UK economy. Nationally this is the third greatest economic contribution by a city behind London and Birmingham, and ahead of £3.6bn generated by the sector in each of Glasgow and Manchester1. The wider Leeds city region is responsible for generating £9.2 billion of GVA from financial services activity, the largest contribution of any city region outside London. The city region is home to three of the UK’s largest five building societies; Leeds Building Society, Yorkshire Building Society and Skipton Building Society. The latter two both have significant operations in Bradford.

1 CityUK, Regional Contribution of UK Financial and Professional Services 2012.



Bradford’s PFS Sector Bradford’s financial services industry provides important supporting functions to the wider city region base of companies. Financial services generate £428m of GVA in Bradford annually, three quarters of this in banking services. Professional services add a further £194m of GVA with legal services accounting for over 50% of this. Bradford is the third largest generator of GVA from legal activity in Yorkshire, behind only Leeds and Sheffield1. There are currently 3,500 PFS businesses within Bradford. These support 31,300 jobs in the district. Jobs in the district are split by broad PFS activity in Table 1. PFS jobs are not just city centre jobs. The central area accounts for only one in three (10,300) PFS jobs. Whilst the city centre is a focus for some professional services firms, it is only one of several business locations. PFS businesses operate across the district with many of the largest firms identifiable outside of the city centre core itself. Proximity to motorways, to Leeds, Leeds Bradford airport and other attracting factors appear to be as powerful as being in the city centre. Table 1: Professional and Financial Services in Bradford, 2012

Sub-sector Bradford Leeds City Region Business Units Employment Business Units Employment Financial Services 370 7,300 2,735 54,900 Professional Services 2,050 14,200 16,725 101,300 Business Services 920 9,800 6,960 94,700 Total PFS 3,490 31,300 26,420 250,900

Source: UK Business: Activity, Size and Location 2012 from IDBR, Office for National Statistics Table A1.1; BRES 2012. A distinct feature of the Bradford economy is the fact that during the last two years professional services have been growing in employment terms whilst other business services have declined. This contrasts with the national pattern. Employment in financial services appears to be stable. Another defining feature of Bradford’s sector is the dominance of head office activity in the city. Representing 27.2% of all professional services employment, no other city in Yorkshire has a higher density of employment focused on head offices than Bradford. The closest profile in the region is Leeds where head offices account for 18.3% of jobs in professional services. As a component of the Leeds city region area, Bradford remains an important banking location. This is reflected in the presence of substantial office operations for global and national firms such as Yorkshire Bank, Yorkshire Building Society, UK Asset Resolution Ltd (UKAR), Ecology Building Society, Provident Financial and Santander. 12.5% of PFS employment and 13.2% of all PFS businesses in the entire city region are located in Bradford.



Bradford’s PFS sector appears more exposed to both negative and positive changes in the wider UK economy. Figure 1 shows reductions in employment as a result of wider shocks in the economy came one year earlier to Bradford than in the country as a whole, but their effect on overall employment was greater. However, the city bounced back more quickly, with significant gains during 2008 and 2009 in the immediate aftermath of the credit crisis, ahead of either England or the city region. Improvements during 2012 yielded jobs growth in the PFS sector at a slightly faster pace than nationally whilst the city region area is still showing no real jobs growth. This greater variability in the fortunes of the sector is partly explained due to the pattern of activities taking place in the district. Professional services firms selling into a wider geographic market and the presence of large employers in the banking sector, for whom the health of the global and national economy is an important barometer, appear particularly important.

Figure 1: Change in Employment: PFS Sector 2005 - 2012

Source: ONS, Annual Population Survey, 2004 – 2012, NOMIS Crown copyright. FUTURE TRENDS AND OPPORTUNITIES

The European and UK financial and professional services marketplace is in a period of major change in both its regulation and levels and patterns of consumer demand. The outcome of these changes present both challenges and opportunities for the industry in Bradford. In the banking sector the market troubles of 2007 and 2008 connected with severely weakened balance sheets and a rapid slowdown in consumer demand, activity in the property market and ultimately consumer confidence continue to hold back businesses growth plans. Regulatory changes contained within the Banking Reform Bill to protect retail banking from other more speculative, activities have increased uncertainty across all businesses regardless of size.

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

2005 2006 2007 2008 2009 2010 2011 2012

Bradford

Leeds City Region LEP

England



In professional services, cost pressures from increased regulatory compliance and the increased competition of online products have seen the number of businesses trading in accountancy and, in particular, legal services reduced. Bradford is well placed however, to benefit from growth in back office requirements of the larger firms that are emerging from this market restructuring. Offering one of the highest concentrations of head office firms in financial and business services, home to a rapid growing population and able to offer extremely competitive property and labour market costs Bradford is well placed to capitalise on downward cost pressures being felt in the sector. The competitive cost base is an opportunity for the city to attract the attention of employers. Demonstrating the necessary range of skills among residents will be one of the most important keys to unlocking this potential however. It is these skills and not the average level of qualifications that will tell the story of a workforce fit for emerging market opportunities, most importantly associated with the growth of digital services in the PFS sector. At the same time as existing companies are looking to restructure, the market is being shaken up by new business models and new entrants. New entrants within the financial services market will create substantial opportunities for Bradford. The city’s ability to demonstrate itself as a financial service hub is unquestionable. The importance of Bradford within the Leeds city region PFS offer will help in presenting the city to the wider world. There is also an immediate opportunity to place Bradford at the forefront of rapid growth in Islamic finance. The UK is already the leading western economy and Europe’s primary centre in this regard. The government is supporting further initiatives to consolidate this position and Bradford’s demographic and Islamic finance specialisms at the University place it as one of the only viable non-London locations to support this growth. However, the city must now capitalise on every opportunity to get its product right; both in property terms and the available skills in the workforce. The new models in finance and also in professional services rely more heavily on an online presence and therefore skills associated with the development, operation and delivery of internet services. Ensuring these are in place now and into the future is paramount. Not only will this attract the attention of inward investors, it will also have the benefit of ensuring existing Bradford firms can explore their new market opportunities from a Bradford base rather than having to look elsewhere. The opportunity for Bradford goes beyond finance, banking and professional services. Consumer-facing companies across all sectors are realising the importance of good customer service, and continue to invest in UK-based call centres. Major players in financial services, utilities, telecommunications and online retail are all looking for cost-effective locations where they can recruit and retain significant staff numbers. Increased public sector outsourcing is creating growth in businesses focused on delivering services on behalf of collections of local authorities and other government departments. Bradford already has a strong portfolio of customer service operations to demonstrate its viability to others.



Sector Growth – What’s Possible? It is understandable that local authorities like Bradford want to take a proactive role in the attraction and retention of businesses; but any activities undertaken must be tempered by asking what is possible in the short term and where can the council achieve maximum impact, both on its own and through leveraging its public and private sector partnerships. The overwhelming majority of companies choose to start, grow, locate or relocate with absolutely no reference to government agencies but the public sector can ensure Bradford is considered, its existing benefits fully understood and can help to shape the future of the city’s attractiveness to companies using digital technologies. This goes further than inward investment promotion to those not yet in the district. If there were no inward investment activities, companies would still expand, they would still choose new locations and they would create wealth and prosperity. Through a thorough understanding of the location and growth drivers of PFS businesses Bradford can stand out from this crowd. An important starting point is this sector review. What A Council Can Influence Through both its scale and range of partnership working, there is a huge amount of influence that Bradford council can have on the business, social and cultural fabric of the city. As the largest employers in Bradford and the largest purchasers in the city, the public sector, especially the council, has the ability to influence the local business environment like nobody else. Every hiring decision and every purchasing decision has the potential to make Bradford a place that is more conducive to business growth. The council’s annual budget of almost half a billion pounds already passes on a significant positive benefit to local companies. Whilst it is clearly not practical for every tender to be awarded to Bradford firms, the opportunity now exists to extend existing commitments and provide more and better targeted information on the range of contract opportunities to local business and professional services firms; not just those of the council but also its wide range of partners across the city region. Several councils now provide and actively promote a localised portal that aims to do this; blackcountrybusiness.co.uk is a good example. Enhancing the beneficial local impact of the council’s spending applies equally to the direct purchase of goods and services, providing a direct impact on growth in Bradford’s businesses through the procurement of legal and professional services for example. Inward Investment is Important.. Growing existing businesses and helping those already in Bradford to weather the significant changes in the professional services marketplace is critical but inward investment activity will nevertheless be an important part of growing Bradford’s economy into the future.



The Leeds city region financial services offer is the best of all north of England locations. Bradford has an opportunity to place itself at the heart of it. A clear and well resourced inward investment proposition, backed up by case studies of the breadth and long history of financial and supporting professional services in Bradford and the substantial teaching and research resources in the University Business School, would provide a better understanding of the range of opportunities to outside businesses developing their location strategy. Demonstrating an appreciation of the needs of the online marketplace and its associated skills and other business needs will be important in placing Bradford on the radar for inward investor projects in the sector. ..but Bradford’s Existing Professional and Financial Services Activity is Paramount The biggest determinant of future sector growth is the existing base of companies that are based here. For financial and professional services the biggest issue facing the sector in Bradford is survival and retention, not the attraction of new players. Attracting a new inward investor into a city such as Bank of New York (Manchester), Deutsche Bank (Birmingham) or Capital One (Nottingham) is a rare event. New UK headquarters projects or substantial back-office facilities are significant but do not happen often. The competition for them is now more fierce than ever. It is in the development of existing businesses that the council can make a real difference immediately. Existing financial and professional firms in Bradford are likely to be in the sights of other cities. Major occupiers are being targeted with lucrative relocation packages and seduced by impressive offers. It is clear that Bradford is vulnerable to attack from aggressive inward investment teams, whether in Yorkshire, elsewhere in the UK or beyond. The city’s most attractive financial and professional assets are not large in number; but their loss would be catastrophic in terms of local employment, future prosperity and external perceptions of the city. Company Targets not Sector Plans Rather than developing a fully ‘sectoral approach’ to developing existing PFS sector businesses in Bradford, what is needed are very specific, individual investor plans. Bradford doesn’t need a broad PFS strategy, it needs individual firm-level strategies. There should be a full-on defensive strategy to engage with each of the major occupiers, not just once or twice a year – but every single week. What will work best are direct connections with relevant functions across the council – legal to legal; PR to PR; HR to HR; chief executive to chief executive; finance director to finance director. There is simply no excuse for any competing location having more of an inside track on the future wants and needs of Bradford’s businesses than the council itself. The council might not be able to control or even influence corporate location decisions, but it must dedicate the necessary time and resources to understanding each of the key firm’s aspirations, needs and plans. Well executed aftercare and local business support usually results in much more local investment and many more jobs being created over time than inward investment.



Good ongoing local engagement with key employers is not just a defensive play however. It is also the best path to finding new investors in that sector. Working with existing businesses on strengthening supply chains often identifies inward investment targets, and the possibility of targeting them through trusted and respected industry contacts that are pro-Bradford. This recognition that the companies hold all the cards, runs through this sector study and its recommendations for future actions.



KEY FINDINGS

A number of key observations about the PFS sector in Bradford emerged from our consultations and analysis of the district’s current offer.

• There is almost universal agreement that the council should pursue a more integrated strategy towards business, one that cuts across all council functions from the lowest to the highest levels. Companies will only come into contact with one or two touch points in the council, usually in terms of planning or business support need, but the activities of many other departments have impacts on businesses in their day to day activities.

• Most consultees regard a broader sharing of data as being the single largest opportunity

that the council can effect immediately. This includes openness in providing information to businesses around longer term strategy when taking decisions and more general information being provided to local companies in order that they can act as direct ambassadors for Bradford in their day to day dealings with others.

• The perception of Bradford as a location for business is generally positive by those

operating in the district. Negative comments generally refer to localised issues such as road and rail accessibility outside of the city centre during peak hours and in the city centre uncertainty around the Westfield shopping centre, an apparent lack of daytime business activity and, for some, parking issues for meetings and client entertaining. However, these cannot be seen as critical to future business growth.

• The most significant infrastructure issues identified appear to cluster around parking

arrangements to allow greater use of the city centre during the daytime and out of office hours and local rail accessibility impacting on recruitment potential rather than long distance connections and speed to London, which was not raised as a significant issue at all.

• Property availability was not generally raised as a growth issue, the uniqueness of many

older properties in the city centre appear to outweigh any problems in refurbishing them for modern use. Several demonstrator projects have shown how it is possible to operate successfully from older properties with the right quality of conversion. Serviced office space is also available but the quality of the offering across the district varies and this is a possible limitation to the district-wide offer that might be limiting firms as they begin to grow.

• One specific type and scale of property however, appears to be limited in supply. There is

little availability of grow on space for those businesses of 100 or more staff who want to stay within the city centre market. Larger properties of this type are available in the District but very few in the city centre, in close proximity to public transport links in particular.



• Recruitment issues were viewed as limiting growth in many cases. However, when pressed

on the nature of these issues for businesses, it is clear that satisfaction with existing employees is very high indeed. In fact many firms see stability in the local labour market and lower levels of staff turnover as one of the defining positives of Bradford as a location. Recruitment problems appear more related to numbers of applicants than the quality of those applying.

• Skills issues are at the forefront of many businesses concerns, and where concerns have

been expressed they are almost always linked to emerging skills around the adoption and use of new technology. Such skills issues are a problem that many fear will limit growth in the immediate future. Almost all those consulted felt that the problem starts at the very earliest stages of schooling, with little exposure of local children to the opportunities and types of job that are available in the district. There has been, as yet, no coordinated attempt at bringing businesses and schools closer together in this respect. Initiatives have been left to individual firms to make contacts where they can. Such moves have improved both the number of applicants for jobs and the understanding by applicants of the need for a broader base of skills than traditional qualifications can provide.

• Beyond schools demonstrator opportunities, many local firms have begun to recruit

through the use of apprenticeship programmes. However, very few Bradford schools appear able to fully participate in this route to employment due to lack of information and appreciation of the district’s employment profile among school staff. There is clear latent demand for a co-ordinated approach taking in a full range of work experience, internships and apprenticeships in some of Bradford’s medium to large scale employers.

• The lack of connection between the education sector and local businesses is also impacting

on recruitment of college and University leavers for businesses outside of the more traditional professions. Retention of more University graduates through employment with Bradford firms should be viewed as a priority. Our consultations suggest that larger businesses are more successful in recruiting from the graduate pool but that this is not reflected in many smaller businesses.

• Appreciation of some of Bradford’s best academic and training assets appears limited. The

activities of the Industrial Centre of Excellence at Shipley College are beginning to directly benefit those businesses that were involved early in its creation. For many businesses outside of the immediate area and a large number of Bradford’s newer businesses ICE is as yet unknown. The opportunity to benefit PFS businesses in Bradford are district wide. The same can be said for many of the activities of the University and the School of Management. There is very little evidence of research and innovation type partnering activities taking place between PFS businesses and the substantial local research base within the University.



• A significant proportion of those consulted with wish to promote Bradford within their supplier and customer networks. A lack of access to detailed information on the city as an investment location or training on how to do so was identified by some businesses.

• We have uncovered some very positive stories around the engagement of local businesses

in order to address immediate business needs. The redeployment of staff following a large scale customer service centre redundancy exercise is just one example. Many feel that this type of intervention is where the council can provide maximum benefit, but that this needs the council to be constantly engaged with businesses on as many levels and across as many departments as possible to identify issues early and provide solutions proactively.

• In this way, the council has a real opportunity to become a powerful ‘go to’ body, tying

together the needs of the diverse range of PFS firms in the district in order to benefit and promote smaller local companies as well as work with larger employers to anchor them firmly into the district and promote further employment growth by attracting other parts of their operations.

• The view of Bradford from outside of the district appears to need addressing. In some

parts of the country, key intermediaries do not have any thoughts as to the offer of Bradford as a business location. For most, their knowledge is limited to a general appreciation of its location and one or two headline names in the financial services industry. Invest in Bradford and Bradford’s businesses can only address this if they work in partnership to curate the positive message and engage others in it.

KEY RECOMMENDATIONS

The project was asked for at least five recommendations of business development activities. Our recommendations are grouped around three themes;

• General Business Growth Projects, • The Education-Employment Space, and • Inward Investment/Investor Development Activities.

There is also potential for crossover into projects aiming to develop other sectors where the underlying business growth issue is generic. This is particularly true in the education and skills related recommendations. Businesses rarely classify themselves as belonging to one or more sectors. Neither should the design of solutions. Business Growth Recommendations

• The general conditions that make a city centre attractive to operate from need promoting. Bradford is poised at one of the most opportune moments to broadcast the recent improvements in public realm around the city centre, the start of the Westfield shopping centre and the presence of supporting infrastructure such as the National Media Museum.



• Launch a Series of High Profile Business Events in Bradford. A series of high profile business events at key locations in the city centre should be considered, with speakers being brought into Bradford through existing business networks and the network of West Yorkshire universities.

• An accompanying series of less formal city centre events should also be planned, raising

the use of city centre spaces by a business audience alongside the success of less business focused events that have taken place in CityPark and elsewhere in recent years. These could include PFS-focused ‘suits in the city’ challenge events with Leeds or Manchester businesses for example. Some of Bradford’s main PFS employers are well placed to assist as they have offices in two or more locations.

• Link the University, its international activities and Bradford Businesses. The University

should be further encouraged to connect its substantial international linkages, research activities and student-based resource with businesses in Bradford, through the events stream and by connecting graduates and course materials more directly with the needs of local businesses.

• Investigate and Stimulate ‘Grow On’ Property Availability. High quality, grow on space for

firms with between 100 and 200 staff is limited in the city centre. The council should investigate and promote the options for private sector developments of this scale. This will ensure sufficient property is available in the city centre to attract growing businesses from other parts and from outside of the district.

• Efforts to promote business growth should not be solely focused on finding and helping

rapid growth companies. There are relatively few of these in the more traditional PFS sector and it is not possible to identify winners from losers in any case. The most important issue facing Bradford in the near future is to retain and maximise employment of existing PFS businesses as the district faces significant competition from other locations who will be targeting the larger employers in Bradford and/or already be home to parts of their operations.

• Promote Financial Technology Opportunities. There are significant emerging

opportunities for those businesses operating in professional, and in particular financial, services to increase adoption of technology in delivering their services. These should be promoted to existing Bradford businesses, to those thinking of starting businesses in Bradford and to companies developing technology solutions for financial services, so called ‘FinTech’ companies, outside of the district looking for their next expansion. A number of existing businesses in Bradford are effective in the online insurance and financial services markets. These offer ready made case studies that can be developed by the council to attract others to opportunities that the city can offer.



Education-Employment Theme

• Industry-driven curriculum development. A regular working group of meetings between employers and those able to affect change in the curriculum being taught should be considered. The Centre of Excellence at Shipley College is already displaying some of these industry-driven characteristics and should be supported as a model to be used across the district. However, the approach can be taken much further with industry participants being given an enhanced role in curriculum development.

• Enhancing School Performance. Where Bradford could be different is to integrate its

approach to business growth with schools at all key stages, publicly targeting an improvement not only in the usual schools indicators used by OFSTED for example, but a number of additional measures linked to activities with local businesses – local enterprise targets. In this way, Bradford could publicly state that its schools are operating an ‘enhanced OFSTED’ or ‘schools plus’ model, complying with national targets and policy but going further to ensure longer term employment gains to the district.

• Enhancing Employer-Education Links. The national school’s curriculum is changing to

embrace enterprise behaviour. Bradford could boost this move further by setting up sponsorship of school enterprise centres or hubs, coordinated by the council but directly involving local employers in providing information, schools visits and, ultimately, work experience opportunities.

• Summer Skills Camps. Enterprise hubs should be extended with the council supporting

Financial Services Summer Camps for local students (12-16 year olds), spending time during summer holidays at each of the major companies and attending tailored training sessions, talks and activities. This sort of activity, based on the development of STEM summer camps in America, has taken place in locations around the UK recently with positive results.

• The council should use deeper and more regular engagement with businesses to identify

and showcase those that are successfully recruiting from Bradford University’s graduate pool. This would provide a clear story of the opportunities, benefits to the business and a positive storyline of rapid career development that is possible in the district.



Inward Investment Theme Addressing the ‘Bradford message’ is made more important given the central focus of professional and, in particular, financial services by other promotion bodies in the city region including Leeds and Partners. The sales message of the entire city region is very powerful. Bradford provides a significant proportion of the message through its large Head Office and national and international financial services presence. This needs greater external coordination, greater resourcing for Invest in Bradford and the provision of information and support to Bradford’s businesses as ambassadors of the district in their day to day operations.

• Increase Invest in Bradford Resources. The Invest in Bradford team should be resourced to undertake a rolling programme of investment promotion activity for the PFS sector that makes key audiences aware of Bradford’s existing financial services strengths and opportunities. This should include:

• creation of detailed propositions for different types of project (HQs; Outsourcing; Call Centres, FinTech are the initial and most pressing opportunities),

• further development of web based and social media tools that both Invest in Bradford and Bradford businesses can use in their promotion of the city,

• a stronger and more frequent targeted intermediary programme with London-based advisors and specialists,

• direct engagement and involvement in sector organisations starting with TheCityUK, the Financial Services Investment Organisation,

• explore partnerships with Leeds, Manchester, Sheffield, Nottingham and Bristol on common sector initiatives,

• hosting of national and regional events focused on PFS issues (beyond the series of high profile events indicated above and including the UKTI sector team and TheCityUK organisations, and

• Create Proactive Company Plans. The creation and implementation of council-wide

company contact plans for existing key employers in the district is of paramount importance. Other locations will be targeting these same employers. Regular contact and in depth intelligence on their plans is essential in retaining as many jobs in the district as possible.

• Islamic Finance. We also recommend that a specific Islamic Finance initiative with the

Professional Muslims Institute, YABA and the University is investigated. Bradford has both the resources in place in terms of people with knowledge of Sharia compliant financial services and senior involvement in the PMI to provide essential contacts elsewhere, and a strong business case for one of only a handful of viable support locations for Islamic finance operations in the UK.



1.0 INTRODUCTION

This report reflects the findings of a project focused on Professional and Financial Services (PFS) activity in Bradford commissioned by The City of Bradford Metropolitan District Council. The projects aims were to investigate the sector’s main activities in Bradford, understand key changes and future developments relevant to businesses in the sector and, through a series of local and national consultations, recommend initiatives and projects that can help further develop and grow the PFS sector in Bradford. The report is structured as follows;

• The remainder of section 1 provides an introduction to the opportunity for growing the sector further through indigenous growth linked to the market and inward investment

• Section 2 contains an analysis of PFS activity in Bradford and nationally • Section 3 discusses major factors affecting businesses operating in the sector and presents

a SWOT analysis of Bradford as a PFS location • A summary of our discussions with those active in professional and financial services in

Bradford, the Leeds city region and nationally is contained in Section 4 • Section 5 pulls the opportunity and local consultation sections together to provide a series

of recommended business support and sector development projects to further develop PFS activity in Bradford.

1.1 THE GROWTH OPPORTUNITY OF PROFESSIONAL AND FINANCIAL SERVICES

Financial services employment in Britain during 2012 was just over 1 million people (1,036,000), with another 2.38 million people working in professional and technical services and 2.1 million in business services. These activities collectively account for 20.8% of all jobs in the GB economy. Financial and related services on their own contributed almost £200 billion to the UK economy during 2011, 14.5% of all economic output in the economy. The scale and importance of various activities makes the continued importance of PFS activity to the UK economy clear:

• The UK is the leading global hub for high-end knowledge intensive services, second only to the USA in export volume but three times larger in per capita terms.

• The UK insurance market was the largest in Europe and third largest in the world in 2011. • The UK is the largest source of both insurance funds and pensions in Europe. • Insurance specialisms in both maritime and aviation secure the UK as the single most

important market for these services in the world. • Three of the top five ‘Global 100’ legal firms are UK businesses. • Legal firms are among the top exporters in the PFS sector, with over half of the UK’s top

100 law firm’s revenues being generated by international firms based in London. • The UK currently provides 14% of the world’s share of insurance, computer and

information services.



The range of services provided by PFS businesses is extremely important to the rest of the economy. Outside core financial services, Professional and Business services provide a significant input to all other sectors with very few outputs supplied to end users. This offers a powerful channel for transmitting efficiency gains and positive spillovers to a wider group of industries. Not only do they support and promote innovation in other businesses in a local economy, they also provide important support for businesses trading outside of the area. Employment is now growing again across several financial services sub-sectors. Official data shows growth in non-financial Services activities in the PFS sector in Figure 1.1 below but the latest CBI/PwC business surveys reflect this with respondents reporting a strong forward view that employment will rise in the near term across the industry over their last three quarterly surveys. The strongest growth is expected in Building Societies and Life Insurance firms2. The industry surveys also show turnover and business volumes generally increasing across almost all financial services activities. Insurance-related activity continues to report a flat performance however.

Figure 1.1: Employment Change in England’s PFS Sub-Sectors, 2009 - 2012

Source: ONS, Business Register Employment Survey 2009-2012, Crown copyright. Outside of the dominance of London as a core international financial market, Leeds offers Bradford a significant opportunity to leverage growth opportunities for both indigenous firms and through inward investment activity as a major financial services centre in the UK economy.

2 CBI/PwC Quarterly Business Surveys - Financial Services, September 2013.

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2009 2010 2011 2012

Financial Services

Professional Services

Business Services



TheCityUK identified Leeds as a preferred location for financial services companies looking for new locations for key business functions during 2012. Financial and professional services activity in Leeds alone contributes £3.8bn of gross value added (GVA) to the UK economy. Nationally this is the third greatest economic contribution by a city behind London and Birmingham, and ahead of £3.6bn generated by the sector in each of Glasgow and Manchester3. The wider Leeds city region is responsible for generating £9.2 billion of GVA, the largest contribution of any city region area behind London. The city region is home to three of the UK’s largest five building societies; Leeds Building Society, Yorkshire Building Society and Skipton Building Society. The latter two both have operations in Bradford. Bradford’s financial services industry may be smaller, but provides important supporting functions to the wider city region base of companies. Financial services generate £428m of GVA in Bradford annually, three quarters of this in banking services. Professional services add a further £194m of GVA with legal services accounting for over 50% of this and making Bradford the third largest generator of GVA from legal activity in the region behind Leeds and Sheffield3.

3 CityUK, Regional Contribution of UK Financial and Professional Services 2012.



1.2 PROFESSIONAL AND FINANCIAL SERVICES INWARD INVESTMENT

To establish the context for investment attraction, it is useful to review the range of possible triggers for location searches that companies undertake and the typical location factors that influence the ultimate selection. Table 1.1 represents factors that are typical in guiding the selection of locations for new or relocating operations. Each factor takes on a different level of importance as companies move through the location selection process. The relative importance of each factor will vary by industry, function and company-specific project requirements. While all projects will have their own unique drivers, the ‘big three’ of access to customers, access to suppliers and access to talent are consistently at the top of most company ‘wish lists’ when it comes to finding a new location. Customer facing PFS firms, particularly in the legal, property and accountancy fields, often place market access and workforce skills issues at the top of their site selection agenda; one of the main reasons why Bradford originally developed its position as home to some of the longest established professional services companies in Yorkshire and the north and partly why some of those businesses have relocated to Leeds over time. Larger professional services operations place less emphasis on market access given the rapid growth of internet sales and their regional and national market focus. Back office PFS operations need no direct access to consumers and therefore skills, costs and access to essential infrastructure (power and IT) tend to be elevated in the location decision.

Table 1.2: Key Location Selection Factors Factor Description

Market Access Accessibility to customers – new and existing Supply Chain Accessibility to suppliers – new and existing Talent Pool Availability of skilled and experienced workforce Property Availability of right site or property Utilities Telecoms/fast broadband, power – scale, security and resilience Education Availability and reputation of post-secondary institutions

Know How Depth of research institutions and corporate R&D activities Workforce Scale Ability to scale workforce (population, demographics, cluster) Costs Start-up costs; Operating costs; Taxes Business Networks Industry and sector groupings, chambers, trade associations Transportation Access to road, rail, air and port connections Congestion Ease of mobility into and around the location Productivity Workforce productivity, churn rates, union activity Sustainability Low carbon issues, footprint, access to renewable energy Capital Access Visibility to market capital for innovation and investment Business risk Geopolitical risk, security, stability, natural hazards Regulatory Legal and regulatory environment (international projects) Quality of Life Ability to attract/retain talent - image, housing, education Support Incentives, support, bureaucracy and visioning in alignment



What is clear is that the right property offer in terms of space and quality needs to be immediately available for most inbound projects. Very few PFS businesses plan expansions allowing for long lead times in procuring sites and having premises built for them. A range of property options is essential. Domestic and International Inward Investment in the UK During 2011/12 Breeze Strategy tracked and analysed the top 250 job-creating projects irrespective of whether they were foreign or UK companies investing in a new location. Of these:

• 101 could be classified as being Professional, Financial and Business Services projects • 37 required new locations, the remainder were in situ expansions of existing facilities • 39 were call centres or back-offices (14 of which were in new locations) • 34 were HQ projects (11 of which were in new locations)

No one location has a dominant position in terms of attracting new PFS projects even, perhaps surprisingly, when London is included. There is a good national spread and a mix of traditional low cost back-office locations and major regional centres. Table 1.2: Locations Attracting New PFS Projects 2011/12

Location New Projects (20+ jobs)

London 3 Cardiff 3 Swansea 3 Manchester 3 Birmingham 3 Liverpool 3 Edinburgh 2 Tyneside 2 Sheffield 1 Glasgow 1 Crawley 1 West Bromwich 1 Belfast 1 Livingston 1 Gloucester 1 Sunderland 1 Weston 1 Leeds 1 Forres 1 Troon 1 Rhondda Cynon Taff 1 Bristol 1 Exeter 1

Source: Breeze Strategy UK Projects Database 2012.



Table 1.3 shows that while Business Services and Financial/Professional sectors account for a significant proportion of the UK’s 1,406 foreign investment successes in 2011/12, only 5 of 197 projects were located in Yorkshire and the Humber. Table 1.3: PFS Sector Breakdown of UKTI Foreign Investments 2011/12

Business Services

Professional/ Financial

Total Projects 74 123 New Site Projects 47 57

Expansion Projects 14 47

Other (JVs/M&As) 13 19 Scotland 2 9

Wales 1 3

Northern Ireland 1 4

North East 6 1

Yorkshire & The Humber 3 2

North West 7 2

West Midlands 2 5

East Midlands 4 2

Eastern England 1 0

South East 3 9

South West 4 2

London 37 84

Other/UK-wide 3 0

Source: UKTI Inward Investment Projects 2011/12. Major Office Inward Investments (2011/12) Table 1.4 shows the largest projects during 2011/12 in terms of employment creation. The functions which are best represented in the table below are call centres and headquarters projects. The most important sectors providing jobs and projects among these are:

• Financial & Professional • Technology Media & Telecoms (TMT)

It should be noted that all of these investments were announced during a recession.



Table 1.4: PFS Projects by Location and Scale, 2011/12 Company Source HQ Town/City Region Activity Industry Jobs New/

Expansion FDI/UK

Nestle Switzerland Crawley SE HQ Food 840 Relocation FDI

Aegis India Manchester NW Back Office Finance/ Professional

600 New FDI

Serco Hampshire Cardiff WA Call Centre Business Services

600 New UK

Solicitors Regulation Authority

Redditch Birmingham WM HQ Finance/ Professional

600 Relocation UK

Firstsource India Cardiff WA Outsource Finance/ Professional

600 New FDI

BSkyB London Stockport NW Call Centre TMT 550 New UK

BSkyB London Sheffield YH Call Centre TMT 500 New UK

The Contact Company

Wirral Wirral NW Call Centre Business Services

500 Exp UK

DVLA London Swansea WA HQ Business Services

400 Relocation UK

HEROtsc India Glasgow SC Call Centre Finance/ Professional

400 New FDI

Telefonica Digital

Spain London LO HQ TMT 400 New FDI

Capita London Belfast NI Back Office Finance/ Professional

330 Exp UK

Avaloq Switzerland Edinburgh SC HQ TMT 300 New FDI

Ceridian USA Glasgow SC HQ Business Services

300 Exp FDI

BT London West Bromwich

WM Call Centre Finance/ Professional

300 New UK

Hastings Direct Sussex Bexhill SE Call Centre Finance/ Professional

300 Exp UK

BT London Tyneside NE Call Centre TMT 280 New UK

E-PPL Nuneaton Nuneaton WM Office Business Services

250 Exp UK

Provident Financial

Bradford Bradford YH Call Centre Finance/ Professional

250 Exp UK

Scottish & Southern

Perth Treforest WA Training Energy/ Environment

250 New UK

Virgin Media USA Manchester NW Call Centre TMT 250 Exp UK

Virgin Media USA Swansea WA Call Centre TMT 250 Exp UK

Vodafone Berkshire Stoke WM Call Centre TMT 250 Exp UK

Ryanair Ireland Manchester NW Office Business Services

250 Exp FDI

Santander Spain Liverpool NW Call Centre Finance/ Professional

250 Exp FDI

PricewaterhouseCoopers

London Belfast NI Office Finance/ Professional

247 Exp UK

Shed Productions

London Glasgow SC Media TMT 230 New UK



Yorkshire Building Society

Bradford Bradford YH HQ Finance/ Professional

220 Exp UK

Aker Solutions Norway London LO Office Energy/ Environment

200 Exp FDI

Etihad UAE Manchester NW Call Centre Business Services

200 New FDI

Hewlett-Packard

USA Gateshead NE Call Centre TMT 170 New FDI

Source: UKTI Inward Investment Projects 2011/12. The latest data on inward investment successes from UKTI, the first year data has not been made available at regional geography, shows;

• 315 projects by foreign investors in the Business, Professional & Financial Services (BPFS) sector in the UK,

• 10,650 new jobs were created in the sector and 26,100 jobs were safeguarded through investment activity,

• 60% (189) of these were expansions of existing investments, • 126 were new investments, and • Outside of London, Greater Manchester LEP (16 projects) and Leeds City Region LEP

(11 projects) had the largest share of BPFS successes. Behind software and computer services, financial and business services were the second and third most important inward investment project categories within the latest year of UKTI’s foreign inward investment results. The strongest sub-sectors of BPFS activity were;

• Business & Consumer Services (113 projects), and • Financial Services (99 projects).

UKTI have stated that their sub-sector focus priorities for 2013/14 are;

• Financial Services (lending, investment, insurance, asset management), and • Business and Professional (Business Process Outsourcing, Legal Services and Accountancy).

This focus is unlikely to change into the medium term. Moreover, the UKTI’s Inward Investment Report for 2012/13 profiles Leeds as a location offering a particularly strong capability in BPFS activities. There is therefore a significant opportunity over the near term to enter a dialogue with inbound investors and market Bradford as a viable destination for inbound financial and other supporting (back office) business services projects as part of the already strong Leeds city region offer to UKTI.



2.0 DATA ANALYSIS - PROFESSIONAL & FINANCIAL SERVICES SECTOR

The table below sets out the definition for the sector that has been used throughout this section of the report. There are five divisions of economic activity which account for the Financial and Insurance and Professional, Scientific and Technical activities sub-sectors.

Sub-sector Activity SIC2007 codes

Financial Services Financial services, Insurance, Reinsurance and Pension Fund activities

64 65 66

Professional Services Property, legal, accounting and head office activities. Technical professional services, architects, advertising and market research activity

68 - 74

Business Services Employment and recruitment services, leasing, facilities management, office and administrative support activity

77 - 78 80 - 82

Source: UK Standard Industrial Classification of Economic Activities, ONS, 2007 2.1 NATIONAL WORKFORCE TRENDS

Across the economy as a whole, 44% of the workforce are employed in managerial, professional and associate professional occupations and 11% in administrative and secretarial jobs. However the occupational profile in the financial, insurance and other professional services sector is significantly different to the rest of the economy, with 95% of the workforce employed in these four occupational groups. Sales and customer service staff are another key occupational group, particularly in the financial services sector. People are at the heart of most PFS businesses and skills are a significant driver of business success. The PFS workforce is generally well-qualified. Over half (52%) of employees possess Level 4 or higher qualifications. Qualification levels in the sector have increased over the past decade at a faster rate than in the economy as a whole. Specialist technical skills are increasingly in demand in addition to more generic attributes such as customer-facing service skills. 2.2 BRADFORD’S PFS WORKFORCE

Figure 2.1 below sets Bradford’s experience over the period straddling the credit crisis against the Leeds city region and national picture. Wider economic effects, both negative and positive, appear to affect the city’s employment position in professional and financial services more than in the city region or nationally4. As a result, the city’s experience with PFS jobs through the credit crisis has been more accentuated than in the wider areas.

4 Part of the explanation for this is likely to stem from the relatively large number of head offices located in Bradford, in financial services in particular. Wider economic shocks or rebounds tend to have a more significant impact on these types of employer.



Figure 2.1: Change in Employment: PFS Sector 2005 - 2012

Source: ONS, Annual Population Survey (workplace analysis), 2004 – 2012, NOMIS Crown copyright. Reductions in employment as a result of wider shocks in the economy came one year earlier to Bradford than in the country as a whole, but their effect on overall employment was greater. However, the city bounced back more quickly during 2008 and 2009, with significant job gains ahead of either England or the city region in the immediate aftermath of the credit crisis. After a flat period between 2010 and 2011, gains made during 2012 have resulted in jobs growth in Bradford’s PFS sector at a slightly faster pace than nationally. It is notable that the city region is still showing no real jobs growth. Table 2.1 sets out the employment position and stock of businesses in the various PFS sub-sectors at 2012. Bradford accounts for 12.5% of PFS employment and is home to 13.2% of all PFS businesses in the Leeds city region area compared to 14.5% of businesses of any type. Table 2.1: PFS Employment and Number of (Local Unit) Businesses, 2012

Sub-sector Bradford Leeds City Region Business Units Employment Business Units Employment Financial Services 370 7,300 2,735 54,900 Professional Services 2,050 14,200 16,725 101,300 Business Services 920 9,800 6,960 94,700 Total PFS 3,490 31,300 26,420 250,900

Source: UK Business: Activity, Size and Location 2012 from IDBR, Office for National Statistics Table A1.1; Business Register Employment Survey, 2012, Crown copyright.

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

2005 2006 2007 2008 2009 2010 2011 2012

Bradford

Leeds City Region LEP

England



More recent changes in the employment contribution of each of the sub-sectors in Bradford is shown by Figure 2.25. Figure 2.2: PFS Employment Trend, Bradford 2009 – 2012

Source: ONS, Business Register Employment Survey 2009-2012, Crown copyright. A distinct feature of the Bradford economy, reflected to a much lesser extent in the city region area, is the fact that during the last two years professional services activities have been growing in employment terms whilst other business services have declined. This is not the case nationally as Figure 1.1 above shows. As for official data at national level, financial services employment appears to be stable at present. Another defining feature of Bradford’s sector is the dominance of head office activity in the city. Representing 27.2% of all professional services employment, no other city in the Yorkshire region has a higher density of employment focused on head offices than Bradford. The closest profile in the region is Leeds where head offices account for 18.3% of jobs in professional services. PFS jobs are not just city centre jobs. The city centre accounts for one in three (10,300) PFS jobs in the district with large employers across all types of activity identifiable in other parts of the district.

5 Note that this dataset is different from that used for the time series analysis in Figure 2.1 above, hence the lack of a reduction in total employment during 2010 as shown in the earlier figure. BRES data used here is considered the most robust for analysis but is only consistent from 2009.

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2009 2010 2011 2012

Financial Services

Professional Services

Business Services

Total PFS



3.0 PFS SECTOR PESTLE ANALYSIS

3.1 POLITICAL AND ECONOMIC ISSUES

Professionals Consolidating Functions Cost pressures are most significant in the legal market, with recent significant increases in insurance costs adding further to cost pressures. These are having an impact on many firms. Some well known names have already ceased to trade, others have been targeted as takeovers for larger firms and more restructuring among small to medium sized legal firms is likely. Following the Legal Services Act in 2007 deregulation in the legal markets has quickly led to a split of functions in the marketplace. Larger firms and businesses from outside the legal profession have entered the market to undertake bulk transactional work such as conveyancing, wills and probate. The increase in online purchases of legal services by consumers and businesses is also fuelling this trend. Increasing numbers of law firms and accountants are looking to consolidate, outsource and relocate more of their middle and back-office functions. Often this involves a global strategy with a number of locations being chosen. Slater and Gordon are a large Australian legal firm for example that have actively entered the UK market through strategic purchases. They currently have a 100,000 sq ft requirement, potentially split between Manchester and the Leeds area to site a large process and back office service centre. For the larger UK firms, many of the opportunities for locations such as Bradford are arising from reducing headcounts and office space in London through establishing a support base in a more cost-effective location. Among the examples are Allen & Overy lawyers moving back-office to Northern Ireland, Simmons & Simmonds law firm moving key functions to a new Bristol office and Augentius Fund Administration, the London-based private equity firm creating 164 jobs in Belfast. Investing in Customer Services Consumer-facing companies across all sectors are realising the importance of good customer service, and continue to invest in UK-based call centres. Major players in financial services, utilities, telecommunications and online retail are all looking for cost-effective locations where they can recruit and retain significant staff numbers. Within the past two years BSkyB have opened five new contact centres in Stockport, Derby, Sheffield, Newcastle, Glasgow, Virgin Media opened two new centres in Manchester and Swansea during 2012 and Vodafone are continuing to expand their Stoke on Trent centre, switching functions from other offices. The trend to offshore contact centres and back-office processes is still in evidence, but in a far more sophisticated way than before. Rather than simply sending all functions offshore, firms are recognising the value in having a more balanced portfolio of locations and, in some cases, firms have brought key functions back from overseas due to increasing wage costs, quality control and management issues. Just recently, Santander has brought call centre jobs back from India to Liverpool and Jet2 has closed their South African call centre expanding the existing facility in Leeds.



Public Sector outsourcing has recently replaced any large scale public sector relocation plans. The latter is not likely to re-emerge on any significant scale. Attraction and development of private companies bidding for public sector contracts is now the largest opportunity. Public sector procurement policy is being challenged nationally with some authorities already flexing their own procurement to maximise local economic impacts in addition to delivering efficiency gains. Local authorities can help their local companies to gain a foothold in this marketplace through their own local procurement activity. Continued pressures on local government budgets will also offer opportunities for joint procurement such as those already underway in parts of West Yorkshire. Investigation of how local government spend might better impact the area in which the goods and services are being consumed is required. 3.2 SOCIAL / TECHNOLOGY ISSUES

In line with the UK’s early and significant use of online commerce, there has been a significant rise in consumer demand for online professional services, principally mortgages, conveyancing and wills but now broadening out to non-conventional lending and other services. The market is still much smaller than the general online retail market but the emergence of a small number of larger firms is already clear and forecast growth is very significant. The latest CBI surveys of the sector show IT budgets are expected to rise across most financial services firms in response to legislative pressures. Previous innovation research highlights that Financial Services shows a very high proportion of ‘innovation active’ businesses among all service and distribution firms6. In many cases, innovation is being pursued through a growth of online services but other technologies are now forcing change in financial services at a faster rate than previously. Globalisation and the development of new markets is beginning to generate demand for innovative new products across the business and financial sector and the cultural awareness to exploit new opportunities. Among these, and a major opportunity for Bradford given its demographic profile, is the significant rise of Islamic finance products. The UK is already the leading western economy and Europe’s primary centre for Islamic finance. Nationally, the UK is home to around 20 banks and 25 law firms offering Islamic finance products with six banks being fully Sharia compliant. The UK government is now placing a major emphasis on becoming a global Islamic finance hub with plans to launch the first Islamic sukuk bond provided by a western country being recently announced by the Prime Minister.

6 Business Innovation and Skills, May 2012, UK Innovation Survey 2011 – First findings; builds on DTI, Innovation in Services, Occasional Paper 9 2007.



The current government is publicly targeting Islamic finance as a cornerstone of the promotion of the City of London. Despite the marketing being constrained to the London market at national level, regional opportunities may flow from this too. Bradford is well placed due to its existing banking profile, key Islamic finance academics in residence at Bradford University7 and the presence of both the Yorkshire Asian Business Association and several key Bradford business people on the Board of the Professional Muslims Institute8. Globalisation in financial markets has also opened up greater possibilities for the UK to attract large scale funding for urban and other regeneration schemes. Sovereign wealth funds and other funds are being actively targeted by new UK government policy. UKTI has recently set up a dedicated Strategic Relations Institutional Investors Team to assist inbound investments into large infrastructure schemes of £100m+ around the country. A further social (and global) change in finance is the rise of crowdfunding and other peer to peer financing schemes via online access. Crowdfunding raised $2.7 billion for projects during 2012 with 2013 forecasts showing a near doubling to $5.1 billion9. The UK is well ahead of other nations in both the creation and adoption of some of these platforms, particularly in peer to peer and equity-based lending projects. FundingCircle.com is a UK based peer to peer lending scheme for businesses that is now planning to launch in the US market for example. Three major trends are now evident in crowdfunding; local communities and localised crowdfunding platforms are emerging, linked to this crowdfunding is spreading out from the funding of technology or creative projects to innovation challenges focused on solving a social problem and access to funding by women through the crowdfunding route is far outperforming traditional investment vehicles. Socially, Britain’s ageing population and an increased interest in financial planning for later life is leading to an increased demand for new products and the skills to develop and deliver them. 3.3 LEGAL / ENVIRONMENTAL ISSUES

There has been a high level of regulatory restructuring in the financial and professional services markets in the past few years, both nationally and internationally. In Europe, important regulatory changes are being undertaken. Solvency II is the largest ever change to European insurance solvency regulations and aims to unify the EU insurance market and enhance consumer protection. The new rules are subject to delay in implementation and may not now be implemented until 2015 or 2016.

7 Among others in Bradford, Professor Roszaini Haniffa Head of the Accounting and Finance Group at the University’s School of Management is the editor of the Journal of Islamic Accounting and Business Research. 8 Four of the seven strong Advisory Board for PMI are Bradford based. 9 Massolution, 2013CF-The Crowdfunding Industry Report.



April 2013 saw the enactment of so called ‘twin peaks’ regulations in the UK; creating two new regulators in the financial services markets. The Financial Conduct Authority has now taken over regulation of retail and wholesale financial and other services from the FSA whilst the Prudential Regulation Authority (PRA) now supervises banks, insurers and large investment firms. The change to the new regime has had an impact on operating costs, particularly for those in the insurance industry. Among the key impacts on businesses are;

• New products will need to be tested before being launched into the market; • There will be a new, more comprehensive system of products and services monitoring

enforced on firms, • Sales processes are being more tightly regulated, and • Other compliance measures and risk assessments are being tightened up, with staff

requiring new skills to ensure their firms are in line with the new approach, As the current report was being drafted the government entered the final legislative phase of introducing the draft Banking Reform Bill. The Bill has been drafted to create a stronger, more stable system of financial regulation in the UK. The four key areas of reform are;

• Supervision: the government has put the Bank of England back at the centre of the supervisory regime, with new powers to identify and address systemic risks as they emerge, ensuring safe banks that will not bring down the economy in the future,

• Structure: the government has brought forward new laws to separate high street banking operations from the trading floor in the City to protect retail banking customers,

• Culture: the government has announced that it will implement major reforms so that banks work for the economy and consumers, and

• Competition: empowering consumers by giving them greater choice which should incentivise innovation and competition within the banking sector.

A number of additional measures of regulation on the banking industry are contained within the Banking Reform Bill. Among the most important of these for regional financial services firms will be the establishment of a new utility-style regulatory regime for payments systems. This is being created to reduce one of the most serious barriers to entry for new firms. This is likely to increase the number of companies entering the deposit banking market over time which will have implications for inward investment attraction and consequent employment. The Bill is scheduled to become law during mid-2014. Increased regulation and financial supervision is likely to have a significant impact on the demand for new skills in the finance sector, including increasing the demand for qualified financial advisers, compliance training for sales and other staff and collaboration and partnership skills at management level.



For local authorities, the government’s new “general power of competence” for local authorities was enacted through the 2011 Localism Act. The power means councils are now allowed to do anything a private individual is allowed to do. Local authorities must carry out such activity through a separate company. The change in legislation opens up the opportunity to undertake property and other investments for commercial purposes, develop local lending schemes or make direct business investments for example.



3.4 PROFESSIONAL AND FINANCIAL SERVICES SECTOR IN BRADFORD - SWOT STRENGTHS Low levels of staff attrition reported by indigenous firms. Demographic profile shows an increasingly youthful working age group. Bradford seen from outside as part of the larger Leeds-Bradford economic geography. Yorkshire ‘brand’ well liked outside of region. City region marketing of largest financial services centre outside of London brings benefits for Bradford also. Demonstrable household names in local financial services industry. Centre of Excellence at Shipley College likely to yield long term skills development benefits. Low cost property location. Lower than average labour market costs.

WEAKNESSES Low profile of the city in the sector in the wider UK context. Little hard evidence on workforce’s low attrition rates. Younger members of staff are more difficult to retain in the city. Lack of connectivity between service sector inside the city centre and those operating from other locations (principally Salt Aire) who connect less with the Bradford ‘brand’. University activity not embedded into local sector as much as it could be (or is in competing cities such as Manchester or Birmingham for example).

OPPORTUNITIES Co-location next to the second largest financial services economy of the UK. Extremely competitive property costs in city region and compared to other north of England centres. Local companies strong advocates of stability of workforce. Strong growth expected in employment terms and IT investments across financial services businesses in response to legislative pressures. Demographic profile may fit the requirements of growth in Islamic finance companies investing in UK – Bradford can present itself as a viable support location. Ongoing consolidation in the legal services market is resulting in some large footloose back office requirements emerging in the inward investment market. Convergence of financial services and technology (FinTech) could open opportunities. Crowdfunding and peer to peer lending through UK websites is growing fast.

THREATS Relocation of a number of professional firms to Leeds core market does not threaten jobs for residents but potentially creates a bad story for further inward investments. Costs of insurance remain problematic for smaller firms in the legal sector, could affect indigenous firms. Failure to market service industries to local population at sufficiently young age results in low aspirations. Among non-Bradford residents retention of graduates is an ongoing problem. Every city in the UK is chasing front, middle and back office projects. Dominance of a small number of major employers in some markets increases the importance of investor development activity significantly. Replacement of Financial Leeds with a more general inward investment body to raise profile of sector adequately outside of the city region may lack the detail and focus needed.



4.0 BUSINESS CONSULTATIONS & SECTOR DEVELOPMENT ISSUES

We have undertaken a mixture of face to face consultations, follow-up telephone interviews and roundtable discussions structured around understanding the nature of professional services businesses operating in Bradford and any growth issues that have been experienced in operating from the district. Twenty eight consultees have been interviewed to date alongside the Leeds City Region LEP team and three national PFS sector and related organisations (TheCityUK, UKTI, National Skills Academy for Financial Services). 4.1 BUSINESS GROWTH ISSUES

General Business Development Issues There is an almost universal appreciation among those in the PFS businesses that we have spoken with that any growth strategy needs to be an integrated strategy reflecting all aspects that impact on business; from skills and infrastructure issues through to Bradford as a place to socialise. Many felt that such integration requires an explicit statement that all parts of the council will work towards the same goals and this has not always been evident. There is also a great deal of concern to avoid short termism in business development initiatives. It was understood that many projects are tied to finite budgets and funding that is available from outside of the area, but to adequately tackle some of the district’s business-related issues a longer term approach is felt to be necessary. A common frustration among consultees was a lack of support from the council – not in terms of financial backing or incentives, but rather in terms of access to information and a willingness to enter a dialogue regarding local procurement. A few consultees suggested that whilst business engagement was good at the most senior levels of the local authority, there were too many ‘dead-ends’ and unreturned emails or calls elsewhere in the council when attempting to act rapidly to an emerging problem. The use of Bradford city centre for business lunch and after office hour’s activities is potentially harmed by infrastructure issues that have had a long historical development. Problems associated with uncertainty around the Westfield shopping centre10, lack of linkage between the two railway stations, localised issues around broadband connectivity and the length of time taken for planning permissions were the most often cited high level infrastructure problems encountered.

10 As of 21 October the developer has stated that just over 50% of all retail space at Westfield Broadway is now under contract or negotiation. 35% of retail floorspace at the centre has been let with contracts exchanged (18,500 sq m in total). A start date at the end of Q4 2013 is anticipated by the company.



Consultees suggest that some improvements should be within the council’s power to influence, such as improvements to car parking provision. Two short stay issues have been raised, one by those with businesses inside the city centre that there is insufficient lower cost short-term parking for their visitors during the day, and second that the use of the city centre after normal office hours is not supported by any reduced fee quality parking provision. Rail provision and concerns are mostly around local accessibility rather than linkages to London or other major regional cities (also see footnote 10). The lack of an adequate high speed service between Huddersfield and Bradford limits the recruitment catchment for some for example. More localised road accessibility issues tend to dominate the concerns of those outside of the city centre, in and around Shipley in particular. Nevertheless, the relative ease of getting to and from Leeds-Bradford airport is an attractive aspect of Bradford that businesses with international connections regularly cite. Growth in the number and range of the airport’s routes are having a positive impact on these companies11. There is a definite feeling among businesses and their employees that the city centre is being used more often throughout the summer weekends to promote the location. However, this is a general place making effort that has not to date focused on specific events during the week after office hours or at weekends that involve the business community directly. Bradford as a Business Location On property, consultees generally feel that there is only a limited negative impact associated with the lack of available, large scale Grade A office space in the city centre. However, there are many medium sized employers in the professional services market already operating from the city centre in older but refurbished buildings that receive visitors and do not see the property issue as a hindrance to their growth whatsoever. If anything, the majority of people in city centre professional services firms view the unique character of Bradford’s older properties as an attractive feature of working from the city. There are clear ‘demonstrator projects’ such as that at CityHub that can be used to showcase how older properties can remain in business use at the highest quality end of the office market.

11 Establishing a rail link between the city and the airport is also being championed by some (mainly as part of the Bradford Breakthrough group). There appears to be relatively wide support for this but the main benefit is considered to be the linkage that would be enabled between the city and the wider rail network.



Where Bradford may be limited at present is in the supply of shared/serviced office space of a very high quality. There is clearly an identifiable demand for such space in the city (e.g. CityHub) and elsewhere (e.g. Hope Park Business Centre) at rental levels that are in line with the wider city region average. Both of these spaces have attracted occupiers very quickly after their completion. Within the city centre there are other serviced office offers but few are at the very highest specifications. Property related consultees note that what Bradford does not need is any additional cheap office space offerings. A note of caution is evident among those with wider property market experience outside of Bradford that the suppressing effect this would have on commercial property values would harm future development potential rather than assist businesses directly. One type of property offering appears lacking for those involved in professional services businesses. Many identified the lack of adequate quality hotel options for business visitors to the city; both as a potentially limiting factor in attracting new businesses, but also for indigenous firms who bring clients and others into the city for events, training and other meetings. The largest companies regularly host a number of senior staff in the city from elsewhere in the country and generally use out of centre hotels or, in some cases, hotels in Leeds. Most consultees view their businesses as part of the wider Leeds-Bradford and West Yorkshire economy, notably not the larger city region geography. Only a few are fully aware of business support services and assistance available at the city region level. Nevertheless, it is clear that the majority of senior level staff working in Bradford have progressed through their careers with little regard to the political boundaries between neighbouring local authority areas. For them, Bradford is Leeds-Bradford or simply one of many places within West Yorkshire. Political concepts of geography do not have any place in their business lives. We found strong agreement among almost all consultees that Bradford would benefit from new business blood in the city through inward investment success. Most businesses identify that they themselves are one of the most powerful methods of finding and accessing potential investor employers outside of the area through their day to day activities and business links. Most are happy to promote the city and wider district offer. Many however, felt that they hadn’t sufficient briefing on the key messages and currently had little formal inward investment collateral to take with them outside of the area. One consultee mentioned their desire to market a specific property to PFS companies in London and the South East. It was interesting that it had not occurred to him that Invest in Bradford might be able to work with him or advise on potential targets. Having individual sites or premises marketed to similar target audiences is a fragmented and wasteful approach.



Skills and Recruitment A lack of the right types of skills in the right quantities are always cited as one of the key growth inhibitors in most UK locations. Bradford is no different. However, these need to be broken down into promoting a mix of skills at each occupational level within the local population, deeper issues in the pre-work population and the range and level of integration between various organisations working on the skills agenda at school, college and University level. A large number of the most senior level consultees we have met with suggest there should be more activity to engage with local schools; building ambition through raising understanding in the youngest age groups of what Bradford’s businesses do and then, for older schoolchildren, to consider work experience, internships, apprenticeships and ultimately employment in local firms through demonstrating the range of opportunities available. Some of this activity is already being undertaken in Bradford by specific firms, some in professional and financial services. The experience of the individuals involved suggests a clear message that this requires a long term approach by all parties involved to build ambition and a longer term, sustainable pool of talent able to benefit the city. A more coordinated approach led or promoted by the council could rapidly increase the levels of activity and results for the district. Several professional services firms report very low interest from Bradford schools at present. One firm in particular that has been using apprentices within their business in relatively large numbers has experienced significantly more interest from schools outside of Bradford, and not even in neighbouring authority areas, than the city itself. The distance these young employees are travelling suggests the apprenticeship route is not being well understood by those in Bradford’s schools or firms outside of the area. An opportunity exists to position Bradford as a centre of professional and financial services apprenticeship training in the wider area. This is not a Bradford-specific issue. Projects elsewhere are currently being discussed to promote links between businesses and schools through increased contact. Most of the tangible projects we have witnessed elsewhere have been initiated by individual Directors and businesses making contact with local schools independently – similar to activities promoted by the E3 Bradford partnership. Very few are being formally discussed as part of wider enterprise strategies. Targeting appreciation of the range of careers and improvements in the basic skills needed by PFS firms at school stage needs also to be matched by the promotion of Bradford’s firms as a viable destination for Bradford’s college and, critically, University leavers. Most professional services employers reported that finding generally older members of staff with experience did not pose a great problem for them. For these employers, it has been much more difficult to find and attract younger newly qualified professionals. Graduate level recruitment has been a difficult issue for many of Bradford’s professional and financial services businesses. Some employers have actively asked the University for assistance and met with little response.



Graduate retention in the city appears low, although some question this given the high rate of home attendance at the University. The University themselves have confirmed that this is the case but they have little detailed knowledge of what happens to their graduates once they leave. What is known from official Higher Education Statistics Agency data is that the University of Bradford reports the highest proportion of graduates entering employment and obtaining professional and managerial level positions within six months of graduating in the whole of Yorkshire12. In discussions with local firms there is a feeling that there is a significant leakage of new graduates to other parts of the city region. There appears to be a slight difference between perception and reality in this respect however. Following some of our consultations we have been provided with confidential information on the level of University graduate recruitment. This information, generally from larger scale employers, suggests that the University is an important component of their recruitment campaigns. It may be that these stories and opportunities are not being widely circulated, offering the potential to position the University very positively among other employers at a relatively low cost and quickly. Other employers with sites across the wider area, view the graduate recruitment pool in a different way. They use Leeds or Yorkshire as much as Bradford to attract younger graduate recruits, sometimes because they feel these will have a better image but also because they are more widely used among those outside of the area. Many firms in Bradford feel that they are losing opportunities to demonstrate to graduates that the city is a location in which young professionals can progress their career, perhaps in some cases much faster than they would in larger, more competitive cities where there are more graduates in the workforce. There are identifiable case studies of people rising relatively quickly through a business in Bradford that some feel should be used in discussions with potential inward investors as well as generally showcasing the city to graduates. In addition, a number of firms operate across the Leeds-Bradford geography and some report that presenting the city as part of this wider area, and the ability to work across it, has overcome some of the problems with initial attraction. Others point to lower staff turnover rates in the city compared with their experience elsewhere. This, again, supports the image of Bradford as a place to pursue a career in a more stable employment environment. For other consultees the issue is not one of accessing sufficient numbers of graduates but in managing the ‘culture shock’ of graduates once they enter employment. These employers feel that a more direct dialogue and work between themselves and the University could benefit all by adding experience of (non-curricula) working practices to what undergraduates learn whilst in college.

12 HESA, 2011/12 Destination of Leavers from Higher Education.



Opening up the scale of the potential labour pool by targeting non-traditional groups in the local population is also having a positive impact on those firms that have explored it. The National Skills Academy for Financial Services runs a ‘New Talent’ programme that is designed to open up the sector to those who would not traditionally possess the skills or the inclination to seek work in it and thereby provide a pipeline of new talent to the industry. To date the nearest college operating in the programme is Leeds City College despite one or two employers in Bradford having explored this route. Shipley College has started to move in a similar direction with the opening of its Industrial Centre of Excellence focused on business services and finance training in September 2013. Consultees with knowledge of the ICE feel that embedding this approach across not only the district’s colleges, but also in some way across schools would represent a major step forward for the future recruitment needs of the sector. Other initiatives that have been highlighted include the importance of linkages between firms making redundancies and those who are able to absorb some of the negative consequences of these job losses through expansion. The closure of Thomas Cook and redeployment of staff with council involvement was cited more than once as an example of good practice in this respect. A lack of local procurement policies in the city’s public sector organisations were mentioned across several sub-sectors of the PFS community. The city is home to national and international suppliers of business services and software that are not being used in the city itself. There is an appreciation that localism is difficult, but not impossible, to build into the requirements of public sector organisations. Some pointed to schemes run elsewhere, including local currency projects in Bristol and business portal websites that assist local companies in finding opportunities within large tender exercises. The best of these build in contacts and other business support mechanisms to ensure that local companies have the best possible chance in any open competition for goods and services. It is also notable that Bradford has a large contingent of headquarters offices outside of the public sector that offer additional opportunities for SMEs to benefit from better and more publicised tendering. Networks in Bradford Bradford Now! Here! networking events were highlighted as an important style of event that Bradford generally lacks. Several consultees expressed a concern that something similar to these or the three TEDx events held previously is needed within the city on a more regular basis. Others mentioned that they thought this style of networking could be very effectively used to reach out from Bradford and draw in colleagues and potential business partners from neighbouring cities, including Leeds and Manchester. There is an appreciation that the momentum of networking anchored by high profile speakers is difficult to maintain.



The ethnic community are not fully involved in the full range of professional and financial businesses in Bradford as much as is witnessed elsewhere with large diverse demographic profiles. There is undoubtedly a historical-cultural element to this as business start-up rates among the ethnic population in Bradford appear higher than in these other cities. However, many larger organisations have observed that online pre-filtering of potential candidates appears to be correlated to a higher than average ‘failed to complete’ rate by those from ethnic backgrounds. This observation is made more surprising by the fact that Bradford is home to a large number of ethnic, particularly, Asian business associations and groups; the Yorkshire Asian Business Association, young Asian business network and key personnel in the Professional Muslims Institute. The latter is also supported by the Bradford School of Management. Beyond PFS networks, there appears to be a lot of support for broader initiatives that promote Bradford as a place to live and work. Events around the Positive Bradford movement have a lot of support from across the sector.



5.0 PROJECT THEMES AND RECOMMENDATIONS

Below we provide recommendations on projects based on the themes resulting from consultations with businesses in the sector, support organisations inside Bradford and the city region and external consultations with sector bodies at national level. Project ideas are grouped around three themes with specific opportunities as follows;

• General Business Growth Projects

- across all Financial and Professional Services businesses

• The Education-Employment Space - Contact centres, Back office operations - Professional services with specific

qualifications needs • Inward Investment Activity

• and Investor Development

- Back office, Business Process Outsourcers - Contact Centres - Fintech companies - Islamic Finance - Existing Large Employers

There is always potential for crossover in projects with other sector growth work where the underlying business growth issue is generic. This is particularly true in the education and skills related recommendations. A number of projects are small, short term in nature with others being longer term, more transformational projects in terms of how the Council interfaces with PFS and other businesses. 5.1 GENERAL BUSINESS GROWTH PROJECTS

Project: Connecting Bradford. Bradford has all the pieces of a great jigsaw, but the lack of connectivity between the various players is a significant obstacle to growth. The Council can play a key role in creating a series of very high profile activities to create an environment where networking automatically takes place and professional and business services staff can meet with other Bradford businesses. A series of high profile business events that pull in major speakers should be considered – these should be high impact events at key venues around the city such as the University, National Media Museum and other larger spaces. Speakers should be either a significant name in their own right or be from a big name company from outside the city or region, e.g. Amazon, Google etc. Rather than being one-offs, these events should be a concerted effort to create an ongoing programme, say on a monthly basis. Project: Suits in the City. This project is linked with the ‘connecting’ theme above but offers a specific series of events outside of the formal networking environment. The city centre is under-utilised by businesses during and immediately surrounding the working day. This is despite the city centre becoming significantly more attractive with the boost provided by City Park and other developments including Westfield shopping centre on the verge of being started.



Part of the solution is already in place. The free wifi zone does not appear to be well known about among those working in offices around the city centre. The Council could consider the opportunity of sponsoring or partnering in a Leeds-Bradford suits challenge; involving opening up use of the city centre for PFS staff to participate in a series of events (annual) between the two city’s PFS employees. Some of Bradford’s firms can quickly help to initiate this given their occupation of offices in both centres. Events that have taken place elsewhere include ‘white collar boxing, tug of war and other team-based games. There could also be a University dimension to these events with other West Yorkshire Universities. Both the ‘connecting’ and ‘suits’ projects would serve to showcase the usability of the city centre for businesspeople – not just through events and general attractions as some of these are already well developed, but through a web/print campaign to showcase business venues for board meetings, seminars and conferences. Several consultations revealed that the bulk of the city’s conferencing is taking place in Leeds at present. Related to the events schedule, a mini-directory of business-friendly coffee shops and restaurants (with wifi, private dining and special deals etc) would help to counter the current argument by many in professional services businesses that ‘there’s nowhere to meet or eat in the city’. Property. From our consultations, it would appear that the availability of property is not seen as a significant limiting factor in Bradford for the smallest PFS firms and there is no significant gap in supply in the current market for mid-sized office space. However, quality might be an issue which needs addressing. City centre growth zone development grants may start to address this issue for the smaller spaces, but there are currently very few if any premises of the highest quality that can house businesses with 100 to 200 employees. The Council could perhaps investigate and market this opportunity to a range of developers. Direct or subsidised development by the Council could potentially distort the market and is not advisable. Local Procurement Policy. Investigation of an intelligent local demand stimulating public sector procurement scheme, possibly alongside other West Yorkshire authorities, that aims to provide both value for money and maximise local economic impacts. The Council’s own procurement could be further reinforced by a local support website for SME’s from Bradford’s professional and business service sector - Find It in Wolverhampton, part of a wider finditintheblackcountry.co.uk scheme, is an excellent example of this approach. There is potential to pursue a similar approach across a wider area, especially so given the possible merger of the Chamber with the Leeds, North Yorkshire and York Chamber. 5.2 IMPROVING THE EDUCATION-EMPLOYMENT SPACE

Bradford needs to demonstrate its commitment to continually improve the pipeline of financial services skills. There are a number of national initiatives which could be a catalyst for drawing together the disconnected worlds of education, business and local government in Bradford.



Project: Industry-driven curriculum development. A prerequisite for any meaningful enhancement of skills relevant to employers must be a regular working group of meetings between employers and those able to affect change in the curriculum being taught. The Centre of Excellence at Shipley College is already displaying some of these industry-driven characteristics and should be supported as a model to be used across the district. However, the approach can be taken much further with industry participants being given an enhanced role in curriculum development. Whilst in the UK this approach is limited at schools level given their national performance requirements, an approach used in Minnesota and an increasing number of US locations should be considered in Bradford. Colleges and Universities are asked to come forward with proposals for upskilling of their students relevant to local employers. Employers from five ‘target industries’ (including financial services) review the proposals and select those which they feel will deliver the most significant and relevant benefits for their future workforce needs. Proposals are not developed in a vacuum, instead they evolve through discussion with employers in ‘business retention and expansion committees’ facilitated by the local authority that twice a year brings together representatives from private businesses, in the financial services industry for example, to discuss issues around growth. In this way, Minnesota places partial control of what is being taught at local colleges and Universities into the hands of private employers. This project would create a regular and formalised Skills Working Group bringing together providers with those facing skills issues in recruitment to work up and refine what is being taught locally. Project: Enhancing School Performance. Where Bradford could be different is to integrate its approach to business growth with schools at all key stages, publicly targeting an improvement not only in the usual schools indicators used by OFSTED for example, but a number of additional measures linked to activities with local businesses – local enterprise targets. In this way, Bradford could publicly state that its schools are operating an ‘enhanced OFSTED’ or ‘schools plus’ model, complying with national targets and policy but going further to ensure longer term employment gains to the district. In Scotland, Perth Council have followed a similar approach by commissioning virtual learning resources developed around national qualifications but based on local employers skills needs. These resources are made available to all schools and include pathway to law, social media, languages and other vocational topics. To maximise the use of such a resource, a central facility such as Bradford’s library could also be used to promote and deliver virtual courses. This approach would build confidence in Bradford as a place to start and grow businesses of all types and would be a significant differentiator for Bradford when discussing the area with potential inward investors. Project: Enhancing Employer-Education Links. Some of most successful precedents for schools-industry relationship building in the UK are found in Scotland at present.



For example, East Ayrshire Council has provided all nine of its secondary schools with additional funding to support the development of enterprise hubs within the schools as part of their ‘Interaction Project’, a follow on from the Council's Business Enterprise Fund which was designed to make school leavers more ready for the world of work. Pupils at Stage 3 (14 years old) identify and respond to the specific needs of their school, leading to the design and construction of built structures or objects. The project promotes problem-based learning in teams. Pupils collaborate with local businesses and education partners including Kilmarnock College and Glasgow School of Art. In addition to the project's own objectives, the Interaction Project secures a number of business partners for each school, providing valuable work experience opportunities. Part of the Council’s funding has also been used to establish a Business and Skills Centre in each school to target the sectors of the economy identified by the Scottish Government as growth sectors. In terms of direct work placement schemes, the Chamber of Commerce is an important key partner. Again in Ayrshire, all three local councils currently contract Ayrshire Chamber of Commerce to deliver school work experience for example. The Chamber acts as an intermediary between schools and local employers to identify and deliver work experience opportunities across Ayrshire. In Renfrewshire the Chamber of Commerce engages in a broader range of educational and youth employment activities. All schools in Renfrewshire are members of the Chamber via a partnership agreement. The Chamber has key contacts at every school who are responsible for employability and works with them to help build relationships with local businesses and support them on industry related events & visits. Employer visits in schools are broader than simple talks from the employers. Pupils have to research the companies in advance, prepare questions and interested pupils get to visit the business after they have been to the school, some being offered work experience placements where this is possible. The employers focus on not just who the company is and what it does but also the skills, qualifications and attitudes they are looking for in recruitment and what it takes to succeed. The Liverpool Compact Education Business Partnership is a further case study that would be usefully pursued in the context of developing Bradford’s skills offer for professional and business services. The Partnership, the largest of the national Institute of Education Business Excellence schemes, has developed into a full range of programmes from primary and secondary school visits and talks to work experience schemes and bespoke key skills development backed by accredited certificates. It now covers 6,000 businesses and all LEA schools across Liverpool.



Project: Summer Skills Camps. As a final project idea, the Council could support the idea of Financial Services Summer Camps with local students (12-16 year olds) spending time during summer holidays at each of the major companies and attending tailored training sessions, talks and activities. This sort of activity, based on the development of STEM summer camps in America, has taken place recently in locations around the UK such as Telford with positive results. The Telford Manufacturing Partnership (a council-supported partnership of several major employers including Denso, GKN and Epson) has developed a focus on delivering STEM activities to 7-18 year olds, through a combination of day activities and summer camps. The Telford pilot has been backed by £1m from BIS through the Employer Ownership of Skills (EOS) scheme (and is match-funded by Japanese inward investor Denso). The existing relationship between the National Skills Academy for Financial Services and Shipley College offers the opportunity to develop the first co-branded camp in Bradford during 2014. 5.3 PROMOTING BRADFORD, LOOKING AFTER INWARD INVESTORS

Every city in the UK has a dedicated inward investment team that is responsible for promoting the business benefits of their city to businesses, both in the UK and overseas. All teams receive funding from local authorities (either a single council, or several councils across a city-region) and increasingly, teams leverage in additional funds from private sector partners (for example, Marketing Derby receives more than £250,000 from 170 local firms; Nottingham has a similar number of supporters in its Invest in Nottingham Club; and Hull has a well-subscribed ‘bondholder’ scheme that supports its promotional efforts). Whilst Bradford has the ‘Invest in Bradford’ brand, with a website and associated materials, it is woefully under-resourced compared to other competitor cities; its collateral looks and feels dated; and does not compare favourably to other towns and cities. If Bradford is to make the most of its locational assets and begin attracting jobs and investment from companies in this sector, the team needs to be improved with additional staff and resources. The Leeds city region has been discussing the establishment of a LEP-wide inward investment team for two years. As of October 2013, there appears to be progress towards creating a city-region inward investment team through Leeds & Partners. While this is a logical approach when competing with Scotland, London, Manchester and Birmingham internationally, it is not the panacea for Bradford’s lack of inward investment success. Bradford is just one part of a city region that includes very strong competing and/or complimentary offers across Bradford’s target sectors. The city cannot simply leave inward investment to Leeds & Partners. It must have a team of its own, responsible for:

• investor development (account managing the most important existing firms), • responding in a coherent way to all investment enquiries, • ensuring that Bradford’s strengths are understood at the LEP level, • targeting potential investors in the UK, and • local sector support and partnerships with local networks.



Invest in Bradford would leave overseas promotion and UKTI liaison to Leeds & Partners. Whilst there is a need to promote Bradford, there is a lot of mileage in leveraging and being associated with the much stronger Leeds brand. The cities are barely seven miles apart from ring road to ring road – the same distance as Manchester city centre to Manchester Airport; or Baker Street to Wembley Stadium. The airport is Leeds-Bradford and this should be extended when promoting the area in different sectors. Leeds City Region doesn’t do this and there is a danger that any LEP-level initiative will either be too ‘Leeds’ focused, or else diluted between 11 local authorities. Invest in Bradford should embrace Leeds and associate with its clear strengths in financial and digital sectors and talk about the ‘Leeds-Bradford area’, make more of Leeds-Bradford Airport and include both cities universities and interesting companies when talking with outside parties. The area’s businesses already do this when talking with their clients and suppliers. Projects: The Invest in Bradford team should be resourced to undertake a rolling programme of investment promotion activity for the PFS sector that makes key audiences aware of Bradford’s existing financial services strengths and opportunities; this could include:

• creation of detailed proposition for different types of project (HQs; Outsourcing; Call Centres),

• development of up-to-date collateral, especially web-based and social media tools that both Invest in Bradford and, crucially, Bradford businesses can use in their promotion of the city,

• targeted intermediary programme with London-based advisors and specialists, • involvement in sector organisations like TheCityUK, Financial Services Investment

Organisation, • partnering with Leeds, Manchester, Sheffield, Nottingham and Bristol on common sector

initiatives • hosting of national and regional events focused on PFS issues (eg UKTI sector team;

TheCityUK), and • the creation and implementation of council-wide company contact plans for key

employers in the district. Islamic Finance. We also strongly recommend that a specific Islamic Finance initiative with the Professional Muslims Institute, YABA and the University is investigated. Bradford has both the resources in place in terms of people with knowledge of Sharia compliant financial services and senior involvement in the PMI to provide essential contacts elsewhere, and the business case for a viable support location for the development of Islamic finance operations in the UK.



Finally, inward investment projects are far fewer than the opportunities of discussing growth with indigenous businesses. By building the closest of relationships with existing businesses the council can make a real difference immediately. Existing financial and professional firms in Bradford are likely to be in the sights of other cities. Major occupiers are being targeted with lucrative relocation packages and seduced by impressive offers. It is clear that Bradford is vulnerable to attack from aggressive inward investment teams, whether in Yorkshire, elsewhere in the UK or beyond. The city’s most attractive financial and professional assets are not large in number; but their loss would be catastrophic in terms of local employment, future prosperity and external perceptions of the city. Rather than developing a broad PFS strategy within a ‘sectoral approach’, what is needed are very specific, individual investor plans; a Santander strategy, a Friends Provident strategy and so on. We strongly recommend that key company plans are created, with council contact being made with individual firms on a regular basis and at the appropriate level. There should be a full-on defensive strategy to engage with each of the major occupiers, not just once or twice a year – but every single week. Many consultees suggested that any new business assistance mechanism or funding opportunity that is relevant should be conveyed to the businesses directly and as soon as possible as opposed to a more general promotion of each initiative as is generally the case at present. Businesses are not actively monitoring these initiatives and often fail to know of their existence. It would not be too much of an exaggeration to specify that for council officers looking to support this sector, Monday should be Santander; Tuesday should be Friends Provident; Wednesday Yorkshire Bank and so on. Not just face-to-face meetings; but deep and meaningful intelligence and research; tracking and monitoring across the entire company; social media engagement at all levels. What will work best are direct connections with relevant functions across the council – legal to legal; PR to PR; HR to HR; chief executive to chief executive; finance director to finance director. This is more likely to produce tangible results than a thousand glossy brochures or mailshots that end up in bins around the world. There is simply no excuse for any competing location having more of an inside track on the future wants and needs of Bradford’s businesses than the council itself. The council might not be able to control or even influence corporate location decisions, but it must dedicate the necessary time and resources to understanding each of the key firm’s aspirations, needs and plans. Investor development is the poor relation of inward investment. It might not have the visibility of high profile investor promotion, but well executed aftercare and local business support usually results in much more local investment and many more jobs than inward investment. Good ongoing local engagement with key employers is not just a defensive play. It is also the best path to finding new investors in that sector. Working with existing businesses on strengthening supply chains often identifies inward investment targets, and the possibility of targeting them through trusted and respected industry contacts that are pro-Bradford. This recognition that the companies hold all the cards, runs through this sector study and its recommendations for future actions.

bradford district professional and financial services ... · there are currently 3,500 pfs...

Documents