Scots financial sector loses 6,000 jobs but boosts output

Scotland lost 6,000 financial sector-related jobs between 2016 and 2017, it has emerged, although output from the industry increased.

Miles Celic, chief executive at TheCityUK, says Scotland is 'playing a critical role' in the UK's finance sector. Picture: Jiri Rezac

The number of workers employed in financial and related professional services roles in Scotland dropped 3.8 per cent from 158,000 to 152,000 in 2016-17, the latest year for which figures are available, according to a study by sector body TheCityUK.

This mirrored falls in London and the south-east, where industry employment fell by 1.3 per cent and 11.4 per cent, respectively.

However, despite a fall in the number of jobs, output in the Scottish sector grew by £265 million to £12.7 billion during the period, accounting for 9.4 per cent of the nation’s gross value added (GVA).

Scotland's financial hubs Edinburgh and Glasgow employed close to 50,000 and 40,000 people, respectively, in 2016-17. Picture: Contributed

The “Enabling Growth across the UK 2019” report showed that the industry expanded at a rate of 2 per cent north of the Border, outpacing growth in London and the south-east. Pace of growth in Scotland also outperformed the UK-wide average of 1.7 per cent.

The report pointed to Scotland as playing a “critical role” in the health of the national industry, with financial hubs Edinburgh and Glasgow employing close to 50,000 and 40,000 people, respectively, in the sector in 2016-17. This represented nearly 60 per cent of all financial and related professional services employment in Scotland.

The study cautioned that continued growth in the sector “should not be taken for granted” and outlined 15 policy recommendations to help bolster its success.

Its suggestions focus predominantly on facilitating collaboration between industry, regulators, and local and national policymakers.

Miles Celic, chief executive at TheCityUK, said: “This industry is vital for job creation and driving economic output to all parts of the UK, as well as contributing billions in tax revenue. London is central to the UK’s strong position, but it is clear that the many thriving regional and national centres are an essential part of its success – Scotland playing a critical role.

“But, this should not be taken for granted. Ensuring the industry’s future as a national asset will require a concerted effort.

“This includes more regionally focused policies and initiatives, greater focus on developing specialist centres and sectors, a more competitive business environment and enhanced engagement between government and industry.”

Scottish Financial Enterprise chief executive Graeme Jones added: “The increased pace of growth delivered by Scotland’s financial services industry demonstrates the continued strength of our sophisticated ecosystem here.

“Our legacy of success stretches back hundreds of years and is something we are determined to continue through committed, collaborative engagement within our industry and with both governments.”