THE FINANCIAL & PROFESSIONAL
SERVICES SECTOR IN GREATER
MANCHESTER: SECTOR PROFILE
NOVEMBER 2013
1
INTRODUCTION
Projected to lead the economic recovery in Greater Manchester (GM) and with the
highest employment growth forecast across all sectors in the coming decades, Financial
& Professional Services (FPS) is a key industry to the UK and GM economy. The FPS
sector in GM is larger than in all other city regions in Great Britain (GB) outside of
London, providing 20% of total employment (approx. 240,000 people) in over 17,000
firms.
Research by Pro.Manchester1 suggests that to support the sector meet its growth
potential and maximise the positive impact on GM, it will be important to ensure that local
residents have the appropriate skills to access employment opportunities in the sector
and that good links between FPS firms and GM’s higher education institutes are
established.
For the purpose of this report, the sector has been broken down as follows:

Rental and leasing activities (SIC code 77)

Security and investigation activities (SIC code 80)

Services to buildings and landscape activities (SIC code 81)

Office administrative, office support and other business support activities (SIC
code 82)

Activities of membership organisation (SIC code 94)

Activities of extraterritorial organisations and bodies (SIC code 99)

Employment activities (SIC code 78)

Financial service activities, except insurance and pension funding (SIC code 64)

Insurance, reinsurance and pension funding, except compulsory social security
(SIC code 65)

Activities auxiliary to financial services and insurance activities (SIC code 66)

Real estate activities (SIC code 68)

Legal and accounting activities (SIC code 69)

Activities of head offices & management consultancy activities (SIC code 70)

Translation and interpretation activities (SIC code 743)
1
Pro.Manchester is a corporate membership organisation representing those employed in the financial and
professional service community in and around Greater Manchester.
2
2
THE DEMAND FOR SKILLS FROM THE SECTOR
The Business Base
There are 17,000 FPS businesses within GM, which represents one quarter (24%) of
GM’s entire business base. Looking in more detail, office administration, office support
and other business support activities account for almost half of businesses within the
sector. Legal and accounting activities is the next largest sub-sector.
Table 1: Number of Financial and Professional Service sector businesses in
Greater Manchester by sub-sector, 2012
No OF BUSINESSES
IN Greater
Manchester
% SECTOR
Office administrative, office support and other business support activities
6,946
40%
Legal and accounting activities
2,120
12%
Real estate activities
1,823
10%
Activities of head offices; management consultancy activities
1,533
9%
Services to buildings and landscape activities
1,160
7%
Financial service activities, except insurance and pension funding
888
5%
Activities of membership organisations
775
4%
Activities auxiliary to financial services and insurance activities
705
4%
Employment activities
652
4%
Rental and leasing activities
505
3%
Security and investigation activities
238
1%
Insurance, reinsurance and pension funding, except compulsory social
security
89
1%
Translation and interpretation activities
4
-
Activities of extraterritorial organisations and bodies
3
-
17,441
100%
FPS SUB-SECTOR
TOTAL
Source: IDBR, 2012
By district, Manchester has the highest number of Financial and Professional Services
sector companies, followed by Trafford and Stockport. These instances roughly follow
the share of total businesses within the conurbation. There are few instances where FPS
and all-sector businesses shares differ significantly.
3
Table 2: Greater Manchester Financial and Professional Service businesses by
locality, 2012
No OF FPS BUSINESSES
% OF FPS
No OF ALL
BUSINESSES
% OF TOTAL
Manchester
4,072
23%
13,939
20%
Trafford
2,408
14%
8,385
12%
Stockport
2,301
13%
8,829
12%
Bolton
1,561
9%
7,037
10%
Salford
1,465
8%
6,098
9%
Wigan
1,455
8%
7,057
10%
Bury
1,119
6%
4,763
7%
Rochdale
1,042
6%
4,945
7%
Oldham
1,020
6%
5,076
7%
998
6%
4,786
7%
17,441
100%
70,915
25.6%
DISTRICTS
Tameside
TOTAL
Source: IDBR, 2012
The data from the Inter-Departmental Business Register (IDBR) shows that GM’s
Financial and Professional Service sector businesses are likely to be small to medium in
terms of total numbers of employees; this fits the profile of businesses within other areas
of the economy, with over 90% of Greater Manchester’s businesses in this size range.
80% of businesses in the Financial and Professional Services sector employ between 19 people, and 16% employ between 10-50 people.
Within the largest sub sector (office administrative, office support and other business
support activities) 91% of businesses employ only 1-9 people. Within the second largest
sector (Legal and accounting activities) 74% of businesses employ 1-9 people, 22%
employ 10-50 people and the remaining 5% employ more than 50.
4
Table 3: Employee size of Financial and Professional Service sector businesses in
Greater Manchester by sub-sector, 2012
Financial and Professional Service Sub-Sector
01-09
10-50
50-250
250+
TOTAL
Rental and leasing activities
374
109
19
3
505
Security and investigation activities
144
59
25
10
238
Services to buildings and landscape activities
879
225
39
17
1160
Office administrative, office support and other business support
activities
6304
561
69
12
6946
Activities of membership organisations
609
146
17
3
775
3
-
-
-
3
Employment activities
326
188
108
30
652
Financial service activities, except insurance and pension funding
529
307
35
17
888
Insurance, reinsurance and pension funding, except compulsory
social security
39
30
12
8
89
Activities auxiliary to financial services and insurance activities
491
162
39
13
705
Real estate activities
1522
246
47
8
1823
Legal and accounting activities
1563
461
82
14
2120
Activities of head offices; management consultancy activities
1207
248
64
14
1533
4
-
-
-
4
13,994
2,742
556
149
17.441
Activities of extraterritorial organisations and bodies
Translation and interpretation activities
TOTAL
Source: IDBR, 2012
Number and profile of Financial and Professional Service sector employees in
Greater Manchester
Data from the Business Register and Employment Survey (BRES) shows that in 2011
there were over 235,000 employees working within the GM Financial and Professional
Service sector, which represents over a fifth (21%) of total employment in GM.
The largest sub-sectors by employment are Legal and Accounting activities and
Employment activities. Next largest are Activities of head offices; management
Consultancy activities and Services to buildings and Landscape activities. 1 in 10
employees in the sector work in Financial service activities (excluding insurance and
pension funding).
5
Table 4: Number of FPS sector employees in Greater Manchester by sub-sector,
2011
SUB-SECTOR
No OF EMPLOYEES
% SECTOR
Legal and accounting activities
33,000
14%
Employment activities
32,270
14%
Services to buildings and landscape activities
27,580
12%
Activities of head offices; management consultancy activities
27,350
12%
Financial service activities, except insurance and pension funding
24,140
10%
Activities auxiliary to financial services and insurance activities
18,790
8%
Real estate activities
18,640
8%
Office administrative, office support and other business support activities
16,560
7%
Security and investigation activities
13,880
6%
Activities of membership organisations
8,780
4%
Rental and leasing activities
8,720
4%
Insurance, reinsurance and pension funding, except compulsory social security
6,060
3%
Translation and interpretation activities
30
0%
Activities of extraterritorial organisations and bodies
0
0%
235,840
100%
TOTAL
Source: Business Register and Employment Survey, 2011
Manchester accounts for 35% of employees in the Financial and Professional Service
sector. Next largest are Trafford (15%) and Salford (13%). This is representative of the
broader employment profile across all sectors in GM, with 27% of all employment found
in Manchester, 11% found in Trafford and 10% found in Salford.
This is in slight contrast to the previous section, which indicated that Stockport (10%) is
the third largest in terms of numbers of businesses in the sector, with Salford a little way
behind in those figures.
The map below shows the geographical distribution of FPS employment in GM and
highlights the strategic importance of Manchester city centre. FPS accounts for over half
of employment in Manchester city centre, representing 67,500 individuals. Furthermore,
around a quarter of FPS employees and one-in-eight FPS firms in GM are based in the
city centre, as well as one-in-three large FPS firms. Other, smaller, concentrations are
found in Trafford Park, around the Airport, and close to the town centres of Bolton and
Bury.
6
Figure 1: Greater Manchester FPS sector employees by locality, 2011
Source: Business Register and Employment Survey, 2011
Sector Growth Forecasts
The Greater Manchester Forecasting Model (GMFM) allows us to look at projected
changes in both employment and Gross Value Added (GVA) for the Financial and
Professional Service sector at the Greater Manchester, regional North West and national
UK levels.
The model identifies FPS as the key driver to economic recovery for the whole of the
North West, with GM taking the lead due to the strong presence of the sector. However,
growth within the sector is not forecast to be uniform with, for example, employment in
insurance estimated to fall rapidly due to the competitive pressures in this sector and the
rise of online activity.
In employment terms, the sector is forecast to expand by 17% over the next decade to
2022, representing approximately 45,000 jobs. This is around half of the 91,900 jobs
expected to be created in GM over the next ten years, further illustrating the importance
of the FPS sector to the conurbation’s economic recovery. Looking at the economic
output associated with the sector, GVA generated by FPS is estimated to increase by
50% to 2022, translating into a contribution of £6.2bn to the GM economy. Again this is
nearly half of the £14.6bn output forecast for GM by 2022.
7
3
THE SUPPLY OF SKILLS TO THE SECTOR
This section reviews data on the number of apprentices, further education and higher
education students who live in GM and who are studying FPS sector related courses. It
aims to give an indication of the potential supply of skilled labour to the sector. However,
when reviewing the following data the following caveats should be noted:
1. A person’s subject of study is not necessarily an indicator of their future
employment occupation;
2. Many GM learners are studying for academic qualifications (e.g. history,
geography) which could make them suitable for employment in a range of sectors
– these learners are not included in the analysis;
3. Across the relevant datasets up to 10% of learners have their study subject listed
as unknown – these learners are not included in the analysis;
4. The latest available data on 16-19 year old and Higher Education students is less
current (2011/12 vs. 2012/13) than the latest available data on 19+ and
apprenticeship students; and
5. There is no official line on which subjects of study are directly relevant to which
sectors of the economy, therefore New Economy has had to make a judgement
on which subjects and apprenticeship frameworks map to which sectors – detail
on this mapping exercise is provided in an appendix to this report.
Thus the figures presented are indicative of the pool of labour from which the sector
could recruit.
16–19: Further education (FE) and school sixth forms
From the latest Education Funding Agency (EFA) data (2011/12), the following course
categories have been identified as being most relevant to the FPS sector:









Accounting and Finance
Administration
Business Management
Business, Administration and Law
Mathematics and Statistics
Public Services
Service Enterprises
Law and Legal Services
Economics
Analysis of the EFA data shows that in 2010/11, approximately 10% of all 16-19 students
in GM were studying an FPS sector relevant course; 26,600 out of 257,600 students
across all subjects.
8
The number of starters within FPS courses has been increasing year on year, with an
estimated percentage increase since 2007 of 9%, but this is slower than the rate across
all subjects, which since 2007 has increased by 13%.
In 2010/11, modes of attendance for these selected courses were weighted heavily in
favour of full-time students (95%). Part-time study was mostly undertaken in
Administration and Service Enterprises.
The gender profile of FPS students was slightly in favour of females: 52% to 48% males,
and the gap between the numbers has stayed very stable since 2007.
Students in FPS related topics were fairly evenly distributed among Greater Manchester
local authorities, with the highest concentration being residents in Manchester (18%),
followed by Wigan (12%) and Stockport (11%). The lowest concentration was in Trafford
(6%).
Data also shows the main providers in the FPS sector in 2010/11. Unlike in other sector
areas, and the general overview as a whole, no provider stands out as being the leader
in this sector, with starts being fairly evenly spread. Institutions with the highest number
of starts were Salford City College, Bury College and Manchester College. Other
providers within the top 10 included:

Oldham Sixth Form College

Ashton Sixth Form College

Loreto College

Xaverian College

Aquinas College

Wigan and Leigh College

Bolton Sixth Form College
Adult Skill Funding Agency (SFA) funded provision (excluding apprenticeships)
In 2012/13 the SFA funded nearly 22,300 FPS training starts by GM residents aged 19
and over. Four sector subject areas account for the lion’s share of these learner starts:

Business Management – 7,300 starts

Administration – 5,800 starts

Media and Communication – 5,700 starts

Accounting and Finance – 3,300 starts
9
SFA funded provision to the sector has declined by 25% over the past five years with
noticeable falls in the numbers of Business Management, Accounting and Finance, and
Media and Communication starts.
Looking in more detail at the types of residents on these courses shows that:

SFA funded learners are evenly split between males and females;

Just over half are studying at Level 3 and above – this is far higher than the all
sectors figure of 21%.
Figure 2. Level of study by Greater Manchester residents of SFA funded logistics
courses, 2012/13
Level
Level 1 & Entry
Level 2
Level 3
Level 4+
Source: SFA, 2012/13
Logistics
10%
30%
51%
2%
All sectors
20%
20%
21%
-
The largest providers of the FPS sector training in GM by number of SFA funded starts
include:




The Manchester College
Salford City College
Bury College
Wigan and Leigh College
Apprenticeships
Every year approximately 4,000 GM residents start an apprenticeship framework that is
related to the FPS sector. Over 75% of these starts are in relation to Business
Administration
frameworks.
The
next
most
important
frameworks
are
Accounting/Accountancy, with just over 500 starts per year.
There has been strong growth in the number of FPS sector GM apprenticeship starts –
up by 126% since 2008, although an almost identical rise has been seen in terms of all
sector GM apprenticeship starts.
Over half (57%) of FPS sector apprenticeship starts in GM are at the intermediate (or
lowest) level. Within Business Administration frameworks there were nearly 1,300
Advanced level apprenticeship starts; and within the Accountancy/Accounting
frameworks there was 166 higher level starts.
10
70% of FPS apprenticeship starts are made by females; across all GM apprenticeships
54% of starts are by females.
Apprenticeships are mainly started by younger people, with almost three quarters being
under 25 years (73% in 2012/13 - with 38% between 16 and 18 years, and 35% 19 to 24
years). This trend has been fairly consistent for the sector since 2008/09.
Age Groups
Under 19
19-24
25-30
31-49
50-64
65+
Total Number
Apprenticeship
starts 2012 / 2013
(total number)
1491
1383
406
540
137
0
3957
With regards to apprenticeship providers, Economic Solutions Limited is by far the
largest provider, with nearly 1,900 starters in 2012/13. The next largest providers were
Damar, Kaplan Financial, Bury College and Total People.
11
Higher education
There are four universities within GM (Manchester Metropolitan University, University of
Bolton, University of Manchester, and the University of Salford). Together these
institutions grant approximately 33,800 qualifications per year2.
Due to the classification of HE data, it is difficult to clearly identify how many of these
graduates qualified with degrees that are directly relevant to the sector. It is possible,
however, as with the previous sections on EFA and SFA data, to make a judgment call to
select from the list of courses those that are most likely related to the Financial and
Professional Services sector. From the Higher Education Statistics Authority (HESA)
data, the following courses have been selected:





Law
Business & administrative studies
Mathematical sciences
Computer science
Languages
Across the four universities, these three courses totaled 10,675 qualifications (32% of the
annual total). As with the distribution among total courses, the University of Manchester
offers the highest proportion of qualifications relevant to the Financial and Professional
Services sector, followed by MMU, Salford and then Bolton.
HESA also produces data on which sectors a sample of these graduates subsequently
start work in:


2
The 2010/11 Destination Leaver Survey found that of over 14,000 GM HEI
graduates, 26% (c. 3,500) were working in areas related to the Financial and
Professional services sector six months later; and
The total number of GM graduates working in the Financial and Professional
service sector was relatively evenly spread across the main sub-sectors.
Higher Education Statistics Authority, 2010/11 qualifiers data
12
4
KEY SKILLS ISSUES FACING THE SECTOR
According to the UK Commission for Employment and Skills (UKCES) 3, a number of
drivers present challenges to the FPS sector over the medium-term. These include:



Increased regulation;
Global competition; and
Technological change.
These challenges also present opportunities for the sector which include:




Building on pre-eminence in certain niche market sectors;
Competing successfully in growing markets in Asia and other parts of the world;
Dealing with the ongoing challenges of increased regulation to restore confidence
in those parts of the sector most damaged by the financial crisis; and
Using new technologies to develop new products and modes of service delivery
to meet the requirements of more demanding customers, and to provide more
efficient services.
The sector’s demand for skills is generally oriented towards highly skilled and qualified
people in managerial, professional, and associate professional occupations who have
typically been educated to first degree level or above. However, it needs to be borne in
mind that the sector has a strong demand for other occupational groups, in particular
clerical and administrative, and sales and customer service workers and there are many
people employed in the sector who will be more typically qualified to Level 3. It is worth
remembering, in this respect, that the largest sub-sector within FPS is ‘office
administrative, office support and other business support activities’.
Given the adverse effect of the economic downturn on recruitment, the sector faces the
challenge of ensuring the skills supply is increased in order to facilitate recovery and
growth over the longer term.
Whilst the sector engages in a relatively high amount of training relative to the rest of the
economy, the evidence indicates that in the financial sector the take-up of vocational
qualifications is relatively low compared with the economy as a whole. Employers appear
to be reluctant to use vocational qualifications because they do not see a good fit
between these and the sector’s skill needs; perhaps, also, parity of esteem issues are
involved. Certainly in the financial sub-sector, there is relatively limited engagement with
external providers of training. However, the evidence suggests that where employers
have made use of programmes such as apprenticeships they can point to a number of
benefits from having done so. Potentially, apprenticeships provide an alternative pathway
into a sector which has traditionally been reliant upon graduates from higher education.
3
Sector Skills Insights : Financial and Business Services, available here:
http://www.ukces.org.uk/publications/er56-sector-skills-insights-professional-business
13
Appendix A: Definitions used to produce this report
SIC Codes
 Financial service activities, except insurance and pension funding (SIC code 64)

Insurance, reinsurance and pension funding, except compulsory social security
(SIC code 65)

Activities auxiliary to financial services and insurance activities (SIC code 66)

Real estate activities (SIC code 68)

Legal and accounting activities (SIC code 69)

Activities of head offices & management consultancy activities (SIC code 70)

Translation and interpretation activities (SIC code 74.3)

Rental and leasing activities (SIC code 77)

Employment activities (SIC code 78)

Security and investigation activities (SIC code 80)

Services to buildings and landscape activities (SIC code 81)

Office administrative, office support and other business support activities
(SIC code 82)

Activities of membership organisation (SIC code 94)

Activities of extraterritorial organisations and bodies (SIC code 99)
EFA tier 2 subject areas
 Accounting and Finance

Administration

Business Management

Business, Administration and Law

Mathematics and Statistics

Public Services

Service Enterprises

Law and Legal Services

Economics
14
SFA tier 2 subject areas
 Accounting and Finance

Administration

Business Management

Business, Administration and Law

Media and Communication
Apprenticeship Frameworks
 Accountancy

Accounting

Advising On Financial Products

Business Administration

Business and Administration

Contact Centres

Contact Centre Operations

Insurance

Payroll

Providing Financial Services

Providing Financial Advice

Providing Mortgage Advice
15