4,500 financial jobs at risk … but report claims all is rosy

Published on Monday 1 June 2009 21:33

SOME 4,500 staff have been served with redundancy notices by Scottish banking, life and asset management companies government figures have revealed.

The revelation came on the day that a body set up to promote the financial services industry sparked anger when its annual report showed employment in the sector rising.

Last night the publication of the outdated figures showing jobs growth by the Financial Services Advisory Board (FiSAB)was condemned as an "insult" to those who have lost their jobs.

According to the FiSAB report, employment in the sector rose from 90,400 in 2006 to 91,600 in 2007.

And the high-powered group, chaired by First Minister Alex Salmond, claimed that the financial services sector was experiencing both rising levels of GDP and employment.

But Skills Development Scotland revealed that its figures, culled from the UK government, showed that a further 4,500 financial services staff were now at risk of being made redundant.

The jobs quango,said that the statistics, from the Business, Enterprise and Regulatory Reform department, showed that the jobs would go from companies based in Edinburgh and the Lothians.

However, the figures, from returns filed by companies such as Royal Bank of Scotland, Lloyds Banking Group, Standard Life and Aegon, were for their employees across the whole of the UK, not just in Scotland.

Ron Hewitt, chief executive of the Edinburgh Chamber of Commerce, said: "It beggars belief the government should be issuing a report based on statistics that take no account of the realities faced in the present challenge. It is really quite insulting to those who have lost their jobs as a consequence."

In the report, FiSAB maintained that its statistics were the most "up-to-date available", but conceded "they do not reflect the most recent events of 2008-9".

Speaking at the launch of the report, finance secretary John Swinney said that, along with recent job loss announcements, there have been job gains for Scotland with companies such as Esure and Tesco Personal Finance recruiting more staff. Swinney added: "This report shows Scotland retains a financial service industry which continues to perform well, particularly in areas such as fund management and insurance, attracting a skilled workforce."

He said the government was collecting data on employment in the financial services sector which it will publish "at an appropriate time".

Owen Kelly, chief executive of Scottish Financial Enterprise, admitted that work with the Scottish economic research institute Fraser of Allander to get more up-to-date figures for GDP and jobs was "taking a lot longer than we had initially planned".

He said that collecting and tracking data from companies "was like a moving target".

And Charles Munn, the former chief executive of the Chartered Institute of Bankers, said banks and other financial institutions would be reluctant to reveal true job-loss figures.

He said: "I know from past experience it is awfully hard to get that kind of thing. Even if there is a thing like FiSAB, the banks just clam up."

Although he chairs FiSAB, Salmond was not at the report's launch. A government spokesman said: "The First Minister was in the North-east working, among other things, on a major industrial initiative to be announced this week."