The Northern Powerhouse – what next?
In June 2014, the British Government of the time, announced their headline scheme to power growth in the north. “The Northern Powerhouse” was meant to bring together cities across the North, so that they collectively could ‘take on the world’ in the words of George Osborne, who announced the initiative. Upon it being announced, a swathe of initiatives were introduced, to stimulate investment, including the Greater Manchester devolution deal along with the Northern Transport strategy. With that, what we have seen, is a geographic area that had when it was launched, accounted for 16.7% of the population of the country and 13% of the vacancies, see their share of the vacancy market rise to 20% now. Put simply, in terms of job creation, the North is outperforming the rest of the country.
Along the way, Manchester has become the jewel of the north. Businesses across Banking, Finance, Law and Technology have made Spinningfield a mini Canary Wharf, where as a graduate of the University, the scale of change in the last 25 years, is beyond imagination. Manchester has become a template for what is possible, for a city outside looking to shine. Indeed, I recently spoke at an event of the Managing Partner Forum, where one of the points raised, and accepted, was that for people across the North, there is no longer a requirement to move to London, if they want to advance their career. The businesses have moved themselves. The question is, what next? A big part of the success of Spinningfield has been the point that especially now, with the advances in technology and internet speeds generally, businesses can operate from the city at a fraction of London costs (factoring lower rents and salaries) with no discernable impact on productivity or effectiveness. Hence we have seen operational teams be expanded in the city. Deal making is still the preserve of London though. Whether that can change substantially is in question.
Nonetheless, as a case in point of what we have seen, given 2019 was the most recent ‘regular’ year for vacancies before the pandemic began, even since then, there has been a substantial movement of job flow away from the rest of the country, to the North. Hence we have seen:
- Vacancies in the North West increasing by 68% in terms of the monthly average, when comparing 2023 to 2019. As a result, the North West is now generating over 1 in 10 new vacancies nationally.
- This is compared to a 20% increase in vacancies, when comparing the rUK, in terms of 2023 YTD (Jan/Aug) to 2019.
- The North overall go from constituting 14% of all UK vacancies in 2019 to 20% year to date
However, between the plans to review HS2 along with the revisions to Northern Crossrail, there is a concern that promises made, which are critical to the further growth of the region, are now being watered down. There is also an election on the way, where for the Conservative Party, who won thanks to breaking through the Red Wall, to win again, keeping to commitments made, is key. Nonetheless, in percentage terms, it is probable the next Government will be formed with Kier Starmer as Prime Minister. Why does this matter? Well, a significant proportion of the investment made across the North has been driven by the Government. Now that the UK sits outside the EU, what this means is regional areas can no longer bid for EU grants, for the purpose of regeneration, instead this will be determined at a UK level. For the Welsh for example, this has been a point of genuine frustration, as it is estimated the amount of funding they will be eligible for, under the new arrangements will drop by up to 800m over a four year period. Wales had been the area of the UK to see the most proportionate aid from the EU within the UK, equally all regions will see a drop as things stand. Hence, what I expect, assuming Labour take power, is a change to how regional funding is determined, where with that, the North will be a significant beneficiary.
So what does that mean for recruitment firms? If you are still rooted in London, expect the capital to, at best, hold. General business expansion will be in the rest of the country. The pandemic has changed working habits irreversibly to the point where along with hybrid working becoming a default at an individual level, distributed work across offices is becoming standard for corporates. For example, there are now more legal vacancies in law firms across the North of England, than there are in London. Never before has that been the case. More and more banks have operational teams across risk & compliance and IT outside of London. Technology firms which are growing, are doing so with teams outside the capital also. Cambridge is the new hub for Life Sciences. The South-West is dominating in Aerospace. And so on.
But like anything, fools rush in. Here at Vacancysoft, we can help you by identifying by region, which the key companies to target are, not just in terms of their total jobs, but in terms of which are busiest right now, so you can optimize your growth at a tactical level, to minimize your cost, should you expand across the regions. If you would like to find out more about how we can help you, please do get in touch.
The data referenced above has been sourced from Vacancy Analytics, a cutting-edge Business Intelligence tool that tracks recruitment industry trends and identifies emerging hotspots. With 17 years of experience, we have a deep understanding of market activities in the UK and globally.
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