Scale and Extent of Economic Links between Leeds and London - Leeds City Council May 2018
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Scale and Extent of Economic
Links between Leeds and London
Leeds City Council
May 2018
2 Contents Introduction 3 Business Connections 6 Academic Collaboration 36 Transport Connections 45 Population & Labour Market Connections 49 Investment Flows 54 Positioning Leeds 59 Opportunity Mapping 66 Note: Images used in this report may be subject to Copyright
Introduction
Introduction 4
Study Context
Leeds is already a vibrant, successful and This study comes at an important time for both cities,
international city full of innovation and enterprise, with with the Leeds Inclusive Growth Strategy (2017-23)
strong economic prospects for its future. The city’s having recently been launched at a similar time to
strong growth is partly the result of its highly skilled London’s Economic Development Strategy. It is
workforce, innovation made by its universities and important for Leeds to understand how its economy
businesses, and its strong underpinning infrastructure. can both complement and compete against London’s,
Leeds cannot be complacent, and it should continue and where the biggest opportunities lie in the future.
its efforts to attract more high-calibre of firms to the
city. There are already a number of future developments
will further help to strengthen the connections
This research has been commissioned to better between the two cities. When HS2 is completed,
understand the current economic connections journey times between Leeds and the capital will be
between Leeds and London, and future opportunities shortened from 2hrs 20mins to 1hr 20mins, and further
for growth in these links between the two cities. The improvements to the office stock within Leeds will
key connections which have been assessed between continue to make the city an attractive place for
the two cities are: inward investment. This, combined with Leeds’ current
• Business Connections sector strengths, creates a promising future for both
cities.
• Academic Collaboration
• Transport Connections
• Population & Labour Market Connections
• Investment Flows
Summary Infographic 5
Business Connections Population & Labour Market Connections
21% of Leeds employers want improved connections to
London to help improve their business
39,000 new graduates in the city region each year
54% of office space in Leeds is owned by London-based 1,000 of whom move to London after graduation
businesses, alongside 62% of retail space & 33%
Migration in 2016 • Strong net inflow of people into Leeds
of industrial space
Leeds from London aged 18-20, heading for
Strongest potential for sector collaboration across some of local universities
Leeds’ targeted growth sectors:
• Net loss of people from Leeds aged
4,300
Creative & Finance &
3,400
Health between 20 and 30 of around 3,000
Digital Professional people each year
Future employment growth is expected to be across similar • Net inflow of people returning to Leeds
sectors: Accommodation, food and recreation; professional and over 30, seeking a better quality of life
real estate; public services; and finance & insurance sectors
London
Transport Connections Academic Collaboration
Leeds City Region has the highest concentration of higher
48 trains per day between Leeds and
London, taking an average of 2hrs 12mins education institutions in the UK outside of London.
8,500 train journeys between Leeds and 9 universities across the city region, with 4 located in Leeds
London each day
increase in business train travel Similar distribution of courses being taught in Leeds and London
+19% over the last five years
Investment Flows
passengers flying between Leeds and
3,100 London each week Leeds and London are natural trade and investment partners,
increase in passenger numbers over with a dynamic flow of two-way expansions.
+35% the last five years In the last two years more than 30
ambitious businesses have
Most popular destinations for those travelling from Leeds to London for moved between the two cities and established a new facility in
work are Westminster, Camden, Heathrow Airport & Canary Wharf Leeds or London.
Business Connections
Business Connections 7
Business Views & Growth Sectors
Many businesses operating in Leeds already have close relationships with London. The Leeds City Region
Business Survey (2017) found that 21% of Leeds employers thought better connections with London would be
beneficial to their business, the joint highest city in the country – equal to those citing Manchester (21%). Across
the City Region, only 12% cited that closer connections to London would be beneficial, showing the strong
relationship Leeds has to London.
Despite this, many of Leeds’ businesses are not directly owned from London, with the same survey finding that
86% of Leeds businesses being the headquarters of the business, and only 14% saying it was just a
branch/subsidiary.
LEEDS’ GROWTH SECTORS
Businesses in Leeds operate across a broad range of sectors, and so to further highlight business links between
Leeds and London, we have assessed each of Leeds’ Growth Sectors in turn, identifying the connections between
Leeds and London, and potential opportunities for collaboration in the future. The sectors analysed are:
HEALTH, MEDICAL FINANCIAL AND
& THE AGEING PROFESSIONAL CREATIVE AND
SERVICES DIGITAL CONSTRUCTION
POPULATION
Growth sectors
that will help
deliver Leeds’
SOCIAL big ideas...
RETAIL AND THE ENTERPRISE & THE
MANUFACTURING VISITOR ECONOMY THIRD SECTOR
Business Connections
Growth Sectors
Leeds has ambitions to drive its economic growth through seven key sectors. These are set out in the Leeds
Inclusive Growth Strategy, which aims to fulfil the city’s economic potential, enhance its competitiveness and
become more resilient. These sectors cover a large part of the Leeds economy and provide large numbers of
jobs at all levels.
Many of Leeds’ priority sectors already have a strong presence in London. The Mayor of London’s recently
launched Economic Development Strategy for London also aims to create ‘a fairer, more inclusive economy’
and it prioritises a number of similar sectors to Leeds.
Employment and Sector Specialisation (LQ) across Leeds’ Growth Sectors
Leeds Leeds City Region London
Leeds Growth Sectors
% Employ LQ % Employ LQ % Employ LQ
Construction 5% 1.0 5% 1.0 4% 0.8
Creative & Digital 4% 1.1 3% 0.7 6% 1.4
Financial & Professional Services 19% 1.3 14% 1.0 23% 1.6
Health, Medical & the Ageing Pop. 13% 1.0 15% 1.1 11% 0.8
Manufacturing 7% 0.7 11% 1.2 2% 0.3
Retail & the Visitor Economy 12% 0.7 13% 0.9 16% 1.0
Source: BRES, ONS, 2017
Business Connections 9
Strategic Alignment
Strategically, Leeds and London are
closely connected, with both cities having
very similar aspirations for their
respective economies. Financial &
Construction Professional
The Mayor of London has already set out (Business) Services
aspirations to improve collaboration Advanced
between London and the rest of the UK, Urban
with the Mayor keen to build stronger Services
partnerships, in particular with Social Creative & Digital Retail &
authorities which are keen to explore Enterprise & (Tech & Digital) The Visitor
The Third Economy
mutual benefits arising from strategic (Tourism)
growth opportunities and the realisation Sector
of corresponding employment Low Carbon
opportunities. Goods &
Health, Medical & The Services
The Mayor of London has already set out
Ageing Population
ambitions to look further afield to the Manufacturing (Life Sciences)
Northern Powerhouse so that London
and the UK can grow successfully
together. The Mayor will take the lead in
bringing together UK cities, business
leaders and institutions to maximise
opportunities for innovation, business Leeds’ Growth London’s Growth
growth and market expansion. Sectors Sectors
Leeds Inclusive Growth The Mayor’s Economic
Strategy Development Strategy for
London
Business Connections 10
Future Growth Trends
Employment forecasts for both Leeds and London suggest that both cities are likely to experience growth in
similar sectors. The visitor economy; professional and real estate; public services; and finance & insurance
sectors are all set to expand in both cities. The main differences between the two is the faster rate of
deindustrialisation taking place in London, with declines in employment expected in the manufacturing and
transport & storage sectors over the next ten years.
The complementary growth patterns across the two cities reflect the similar growth aspirations set out by Leeds
City Council and the GLA in their respective Economic Development Strategies. This close alignment means that
there will be opportunities in the future for both economies to collaborate.
Future Employment Growth Projections by sector, 2017-27
20% 19%
Leeds London
16%
14%
15% 13%
12% 11% 12%
10% 10%
9%
10% 8% 8%
6% 7% 6%
4%
5%
1%
0%
-5% -2%
-5%
-10%
-14%
-15%
Visitor Economy Professional & Public Services Finance & Admin & Construction Transport & ICT & Digital Wholesale & Manufacturing
Real Estate insurance support services Storage Retail
Source: GLA Long Term Labour Market Projections, 2017 & REM employment forecasts for Leeds, 2017Business Connections 11
Focus on...Health, Medical & the Ageing Population
CURRENT OVERVIEW SECTOR TRENDS
Numbers in 000s Leeds Leeds CR London
• Forecast strong growth globally
• Growing impact of an ageing population and wider reforms
Employment, 2016 50 165 466 to healthcare provision
Businesses, 2017 3 10 34 • Mid-tier, SME and speciality companies are driving change
• Clustering around niche activities
Recent Employ growth • Healthcare informatics
11% 8% 21%
(2010-16) • High skill requirements to support R&D, manufacturing and
Employ. Specialisation 1.0 1.1 0.8 supply
LEEDS POSITION Half of all research in Leeds
is in health and care
• One of the leading digital health sectors nationally,
fostered by the Digital Health Enterprise Zone
• Home to two market leading health/IT systems EMIS and
TPP Centre for the largest data
• Centre for the largest healthcare data platform in the platform in the world
world NHS Spine and NHS Social Care Information Centre
• Wide ranging R&D activities across the region led by centres
of excellence for medical research including the University
of Leeds. Half of all academic research in the city is in
health and care. Leeds CR accounts for 1-in-5
• Leeds CR accounts for 22% of digital health jobs nationally digital health jobs nationallyBusiness Connections 12
Focus on...Health, Medical & the Ageing Population
LONDON POSITION Opportunities to increase collaboration
• Life sciences targeted sector in the Mayor of London’s between Leeds and London-based
Economic Development Strategy businesses to support innovation within the
• QMUL investing in a new state of the art life sciences sector, especially given the presence of
campus in Whitechapel
NHS Digital and wider Department of
• MedCity – promoting the life science cluster in
London/South East through facilitating and supporting
Health functions in Leeds
collaboration
• Francis Crick Institute - a new £650 million research Build on the strategic aspirations in both
facility in London cities for growth within life sciences, health
• DigitalHealth.London Growth Accelerator & medical sectors
Opportunities:
• Strong crossover exists between health sectors in Leeds and London, and the presence of the NHS in Leeds provides significant
opportunities for innovation in digital health & care. Strong academic links already exist between the two cities.
• There is potential for digi-health firms across both cities to collaborate on a more regular basis. The provision of a hub/base in
London for Leeds-based firms would act as an important base for facilitating these links.
• Ambitions to develop the Leeds Innovation District and the Health Innovation Gateway should look to attract partners and
collaborators from Leeds and London to share ideas, especially in medical devices, wearable tech and data analytics.
• Build on the strategic aspirations within both cities to support the development of life sciences, health and medical sectors.
Improve collaboration between the two cities, and use this as a platform for joint funding bids (e.g. Industrial Strategy Challenge
Fund).Business Connections 13 NHS Digital What do you do? NHS Digital is the national information and technology partner to the health and social care system. The team runs, stores and protects the digital infrastructure which keeps the NHS functioning. Two nationally significant functions are based in Leeds 1) the crucial Cyber Security department safeguarding personal information and protecting the IT systems from continuous external threats. 2) NHS Spine which allows secure sharing of information from over 23,000 healthcare systems in 20,500 organisations. Where is your business currently located? There are 14 offices across England with four, including the head office, being located in Leeds. London and Exeter are home to two offices each, with the rest being located in regional towns. The organisation currently employs roughly 3,000 staff with 2,000 of these located in Leeds. The key management decisions and product delivery services are centralised in Leeds. Why did you choose to locate in Leeds? Leeds’ digital economy placed it as an ideal location for the organisation to locate given the technical nature of its work. In the field of health and life sciences Leeds is home to as a cluster of key private and public sector organisations, with one of the strongest pulls being NHS England's presence in the city. How has this benefitted you? NHS Digital has seen numerous benefits of locating in Leeds, the most obvious being the supply of technical skills within the city, a key benefit given the national digital skills shortage. The organisation has had good success in recent years by recruiting talented graduates from the local area, boosting technical expertise. The cluster of digital health firms within the City has helped the delivery of services, with major health IT system providers being located within the city such as EMIS and TPP. Further, the burgeoning public sector presence in the city has improved our communication with auxiliary government and NHS services. As a result of this success the organisation has committed the foreseeable future to the city by signing up to the Government Hub building in Leeds with central government partners. The building will be home to 6,000 civil servants taking 378,000 sq ft of office space on a 25 year lease from 2020.
Business Connections 14
Focus on...Financial & Professional Services
CURRENT OVERVIEW SECTOR TRENDS
Numbers in 000s Leeds Leeds CR London • Rise in technology-based companies means sector will be
faced with new business models and financing methods
Employment, 2016 69 163 1,013 • The rise of FinTech, with increasing levels of technological
Businesses, 2017 5 15 100
innovation in the financial sector driving growth (e.g. retail
banking, investment strategies and crypto-currencies)
Recent Employ. growth • Uncertainty over the future of the sector following Brexit
22% 20% 33%
(2010-16) regarding the need for EU ‘passporting’ rights to access
European markets
Employ. Specialisation 1.3 1.0 1.6
LEEDS POSITION
Second largest financial &
legal sector nationally
• Second largest financial sector and legal sector in the UK
• National headquarters of a number of major banks
including First Direct, CYBG plc (owner of Yorkshire and
Clydesdale Bank) Home to numerous bank &
• Home to 30 national and international banks, and hosts
building society HQs
the HQs of three of the five largest building societies
• University of Leeds ranked 4th nationally for Accounting
and Finance degrees
Strong academic backgroundBusiness Connections 15 Focus on...Financial & Professional Services LONDON POSITION Opportunity to establish stronger business • Targeted sector in the Mayor of London’s Economic and strategic connections between the two Development Strategy cities, building on sector’s growth • Home to key FS institutions such as the Bank of England aspirations within Leeds Growth Strategy & and FCA London Economic Development Strategy • Global headquarters of many international banks and insurance companies including Lloyds, Standard Chartered Attract footloose firms struggling with high and Barclays costs in London, and help support firms • Move towards ‘Open Banking’ led by the Competition and requiring more space to support business Markets Authority invigorating London’s world leading FinTech centre (HQ) functions in London (e.g. finance & • High office rents putting pressure on the sector HR) Opportunities: • Leeds’ position as the second financial and legal hub in the UK (and London as the first) means there are already strong connections between the two cities with many companies operating in both cities and well-established relationships. Leeds’ strengths in the digital economy means it is well placed to take advantage of new innovations in finance, especially if Leeds is to fulfil its ambitions to become a centre for excellence in fintech and cybersecurity. • Improving collaboration between Leeds and London-based firms (e.g. through networking sessions and events) would help to further facilitate innovation across both cities. • Leeds should look position itself in order to attract financial and professional service firms struggling with London’s high rents, with its competitive offer, and look to identify footloose fintech firms in London which may be looking for cheaper premises (especially those which may be space intensive (e.g. data centres)). • In developing a Financial & Professional Services network with the LEP, and working alongside the already established Leeds Legal Network, opportunities within London should be promoted through these networks to Leeds-based businesses.
Business Connections 16
PwC
What do you do? Why is your business expanding the Leeds office?
PwC is a multinational professional services company Nationally, PwC have begun to consolidate their
with a network of firms in 158 countries with more operations into 8 National Centres from which they will
than 236,000 people. PwC offers industry-focused be able to offer more expert-driven support to their
services including audit & assurance, tax, business clients. Leeds has been chosen as one such office for
recovery, consulting, sustainability, forensic services, the Yorkshire & Humber region, given the size of the
transaction services, people & organisation and office and the strength of the Leeds market. It is
corporate finance. expected that the Leeds office will continue to build on
Where is your business currently located? the business footprint generated by the existing
Sheffield and Hull offices, and also ensure the
PwC is headquartered in London with 30 offices company is able to focus its investment in the latest
across the UK. Around 770 people are currently technology to benefit its clients.
employed in the Leeds office with 23,000 people
employed nationally. 18 months ago, PwC moved to How are you helping to attract talent to Leeds?
new premises on Wellington Street, and is already PwC are looking to work with local partners to improve
expanding the size of the office to three floors to meet graduate retention within the city, and have partnered
the recent growth in their workforce. the In Leeds Day programme, which aims to make
PwC’s National Centre of Excellence in Consumer graduates more aware of opportunities in the city.
Markets is located within the Leeds office. The Leeds They have recently launched a Higher Apprenticeship
office also has a large and growing technology team, Degree with the University of Leeds which will initially
building on the wider strength and growth aspirations see 40 students a year combining university life with
of the Leeds digital economy, including specialists in paid for practical work-based technology projects at
cyber security, data analytics, drones, AI and VR. PwC, based in the same city as they are studying, with
Employees within the Leeds office frequently work the expectation that many of these will join PwC on a
alongside colleagues in London and other regional permanent basis upon completing their qualification.
offices, with video technology helping to facilitate
these links.Business Connections 17 KPMG What do you do? specialisation in one office. Teams within KMPG’s KMPG is a multinational professional service company Leeds and London offices frequently work alongside employing around 189,000 people around the world. each other on projects, especially when particular KPMG offers an array of professional services, specialisms are required. including audit and assurance, tax, advisory, How has the Leeds economy been performing in enterprise, small business accounting and business recent years? technology. The Leeds office has been performing well in recent Where is your business currently located? years, reflecting the wider growth experienced in KPMG is headquartered from the outskirts of Leeds’ economy. Demand within several specialisms Amsterdam, with the UK headquarters located in has increased strongly in recent years, including cyber London. The Leeds office is the fourth largest in the security, financial services and digital, reflecting wider UK, employing 1,000 staff out of 15,000 nationally. growth trends across the Leeds economy. Thirty partners are based in the Leeds office, offering How easy is it to attract talent to Leeds? KPMG’s typical array of professional services. Several Generally recruiting across all roles is not an issue, national specialisms are based in the Leeds office, although it can be harder to recruit specialists in including tax (capital allowances) and regulatory risk. Leeds than in London (especially at graduate level). New specialisms are being constantly developed in the Transfers between the Leeds and London office are Leeds office, including the recent acquisition of common, and there is a growing trend of senior staff Cyberinc’s 24-strong cyber security team, which has looking to move to the Leeds office in their 30s-50s. moved into the Leeds office to meet growing demand Poor east-west transport connections have made it from local clients. hard to attract talent from the North West to the Leeds KPMG’s Leeds office is the only office in the Yorkshire office, especially those at a more senior level. region, with the company having consolidated its operations across Yorkshire into one office around 20 years ago to allow for more opportunities for
Business Connections 18
Focus on...Creative & Digital
CURRENT OVERVIEW SECTOR TRENDS
Numbers in 000s Leeds Leeds CR London • Rapidly developing sector and a key focus for national
government
Employment, 2016 32 91 247 • E-commerce
• Technological change
Businesses, 2017 2 6 52
• Increasing number of technology users
Recent Employ growth • 5G Technology
42% 31% 32%
(2010-16) • The digital sector, is highly mobile, and can easily relocate
nationally and internationally. Brexit may lead to digital firms
Employ. Specialisation 1.1 0.7 1.4 relocating overseas to continue access to the EU market
LEEDS POSITION Hosts a number of digital key
• Home to node of the Open Data Institute, one of 15 in 22 institutions (e.g. ODI, IX,
countries NHS Spine)
• Headquarters of Rockstar Leeds, leading video game
production firm
• Collaboration platform IX Leeds - 1 of 3 UK internet Large amounts of support
exchanges
• Centre for the largest healthcare data platform in the available and networking
world NHS Spine and NHS Social Care Information Centre opportunities
• Digital catapult - University of Bradford
• Digital Delivery Plan launched in Leeds
• Futurelabs tech start-up community
• University of Leeds ranked 1st for Big Data (Leeds Strong academic presence
Institute for Data Analytics)
within the sectorBusiness Connections 19
Focus on...Creative & Digital
LONDON POSITION Work to develop stronger business and
• Targeted sector in the Mayor of London’s Economic strategic connections, building on sector’s
Development Strategy and cyber & digital security growth aspirations, and understand the key
strategies sub-sectors in which Leeds could complement
• Mayor launched a vision for the Thames Estuary
Production Corridor, a network of large scale production London’s current offer
facilities
• Alan Turing Institute - a national hub for data science Attract footloose firms struggling with high
• Microsoft and Telefonica launched tech growth costs in London with our competitive offer,
accelerators to foster innovation and firms requiring more space to support
• Open data policies; TfL, London datastore
• High office and industrial rents putting pressure on
business (HQ) functions in London (e.g. data
businesses storage, data analytics and cyber security)
Opportunities:
• The highly collaborative nature of the sector presents significant opportunities for future growth together. Leeds’ strengths in
big data and data analytics have a large market in London, which should be captialised upon.
• The promotion of events such as the Leeds Digital Festival are a good platform from which Leeds can display its digital abilities.
When promoting these events, efforts should be made to attract firms, investors and workers from London (and elsewhere) to
showcase Leeds’s offer.
• Efforts should be made (alongside regional partners including Tech North and the Leeds Digital Board) to identify footloose
creative and digital firms in London which may be looking for cheaper premises (especially those which may be space
intensive). This includes promoting the Tech Hub Fund to potential businesses looking to move between the two cities.
• Continue building Leeds’ specialism in digital sector, through continued council support for digital skills (e.g. Leeds Digital Skills
Action Plan)Business Connections 20 Focus on...Tech Sector CURRENT OVERVIEW • There is a thriving tech scene in both Leeds and London. • Both cities have strategic ambitions to grow the tech sector in the future. • The sector cuts across many other sector strengths of both cities, with the tech sector playing an important role in the creative, finance, professional services, construction and manufacturing sectors. LEEDS POSITION • There are currently 12,100 jobs in digital tech in Leeds, with over £1bn digital tech turnover in 2017. There has been strong digital business growth, with a 138% increase over the last five years • Numerous success stories in Leeds including RockStar Games and Cooperative Innovations. • Sky Betting and Gaming has continued to invest in the area, creating 230 more jobs in 2017/17 • Leeds Digital Festival is the largest digital festival in the North, with 20,000 attendees and 170 events in 2018 • Leeds City Council’s Tech Hub Fund has helped support several local businesses in supporting the development of the digital sector in Leeds • Numerous networking opportunities, including LeedsTechHub (1,580 members), Leeds JS (1,230) and Leeds Hackspace (1,100). LONDON POSITION • Tech sector currently employs over 250,000 people across London, generating £64bn in turnover in 2017. Relative to the size of the sector, employment growth has been relatively modest over the last five years, with 10,000 new jobs created across the sector. • The capital continues to be the focal point for tech in the UK, with a multitude of industries collaborating across the spectrum of tech activities, including creative, fashion, finance and much more. London currently attracts 80% of all UK venture capital and raises more investment than any other European city • Well-established and active networks exist across the city, including London New Tech (13,800 members) and Silicon Roundabout (12,900 members) • Home to some of the most recognisable tech firms in the world, including Facebook and Google
Business Connections 21
BJSS
What do you do? crucially, retain highly skilled staff at the company.
BJSS is one of the largest IT consultancy’s in the UK. The city’s strong university offer combined with its
They work predominantly with major blue-chip gravitational pull as a large urban hub ensures there is
organisations to help them build their IT systems and an ever growing talent pool to recruit from. BJSS finds
software. BJSS have a broad range of clients from it easier to recruit and retain staff in Leeds than
global investment banks to high-street retailers and London, as the London jobs market is extremely fluid
governmental departments. The company has over 25 resulting in higher competition on salaries. This
years experience and has expanded into the US, now contributes to Leeds' second key benefit, being able to
employing over 1,000 staff. offer lower costs through its Leeds office without a
compromise on the quality of the work. The third key
Where is your business currently located? benefit is the proximity to the emerging digital
The business was founded in Leeds in 1993 but has economy, which gives a local client base across the
expanded to offices throughout the UK, including cities professional services and healthcare sectors.
London, Manchester and Edinburgh as well as two How do you think the future of the Leeds economy
offices in the US, New York and Houston. The two will help your business?
largest offices are located in Leeds and London, with
420 and 280 staff in each office respectively. Board BJSS sees the Leeds digital economy in its embryonic
level decisions are not centralised in one particular stages and an exciting and vibrant environment to
office, rather shared around the locations. The Leeds conduct business in its sector. The digital economy in
office primary function serves as a project centre Leeds stemmed from its existing industries, such as
where businesses from around the country get their professional services and healthcare, placing greater
software developed. The model for the Leeds office importance on their digital infrastructure. The FinTech
has been followed in other major cities, such as scene and employment of big data in the running of
Manchester. organisations is growing at a fast rate, providing new
opportunities for BJSS. The digital economy in Leeds is
What are the benefits of being located in Leeds? just getting started with fantastic ideas emerging all
BJSS perceive three key benefits to being located in the time.
Leeds. Firstly, it is relatively easy to recruit, andBusiness Connections 22
Focus on...Construction
CURRENT OVERVIEW SECTOR TRENDS
Numbers in 000s Leeds Leeds CR London • Government ambition to build more homes (e.g. £3bn
Home Building Fund)
Employment, 2016 19 58 247 • Modular building design, with more off-site construction
• Use of drones for surveying, safety inspections
Businesses, 2017 4 13 52
• 3D modelling in building design, and VR products for
Recent Employ growth showcasing
14% 8% 32%
(2010-16) • Labour market concerns, especially given dependency on
EU labour
Employ. Specialisation 1.0 1.0 1.4 • Increasing focus on the environment – move towards
recycling and reusing
LEEDS POSITION
Upcoming mass infrastructure
• Mass infrastructure investment projects including a flood projects and investment
risk reduction programme
• Large scale rail infrastructure investment including 40% in
rail capacity (2016-19), Trans Pennine electrification,
Northern Powerhouse Rail and HS2 Ambitions to provide gigabit
• Council’s ambition that all premises can access gigabit capable connectivity to all
capable connectivity by working alongside infrastructure premises
providers
• Strong construction economy with a number of large firms
including Wates, and emerging specialisms in 3D modelling Strong existing construction
& VR economyBusiness Connections 23
Focus on...Construction
LONDON POSITION Work to provide better platforms for Leeds-
• Closely aligned to one of London’s key sectors identified in based construction businesses to develop
the Mayor of London’s Economic Development Strategy innovative approaches to construction tools,
“advanced urban services” by collaborating with emerging firms within
• Smart London Plan implemented to incorporate smart London’s “advanced urban services” (a
technology with new developments and infrastructure targeted sector within the London Economic
• TfL undertaking an extensive programme of modernisation Development Strategy)
of existing tube lines
Particularly focus on collaboration between
• Mass water and energy infrastructure upgrading including
Thames Tideway Tunnel tech and construction sector, building on
Leeds’ strengths in 3D modelling and VR
Opportunities:
• Future large-scale housing and infrastructure projects, and growing demand for office space in Leeds city centre means there
will continue to be strong demand for construction activities and the services that support these.
• Major construction projects including HS2 provides an opportunity to showcase Leeds-based businesses, and an opportunity to
collaborate with London-based businesses. Networking and showcasing events should be held around HS2’s development to
help increase awareness of current construction specialisms based in Leeds.
• Having a platform in London where these can be strengths can be shared with a national and international market will help
bring awareness of Leeds’ strengths in the sector.
• An important role for the (soon to be created) infrastructure group of major firms in the city, will be creating this platform and to
promote Leeds’ strengths. Leeds’ strengths in the digital sector should be showcased (especially activities related to 3D
modelling and VR) alongside those in infrastructure and advanced urban sciences.Business Connections 24
Arup
What do you do? Why did you choose to locate in Leeds?
Arup is an independent firm of designers, planners, Leeds is a prime cultural centre and an engine for
engineers, consultants and specialists working in the growth and employment at the heart of an increasingly
built environment. Arup provides technical advice on prosperous region. The city centre is set for major
the planning and construction of buildings and changes over the next few years with HS2 being the
infrastructure including transport systems, city catalyst for visionary developments. From the Leeds
master-plans and digital smart city networks. Arup is office, Arup can support clients right across the UK
an employee owned company and employs more than and offer its employees an attractive place to bring up
13,000 people, in more than 35 countries. their families. A number of Arup’s competitors are also
based in the city which means they have a wider pool
Where is your business currently located? of skilled engineers to target for recruitment. Leeds is
a also a ideal location to recruit new graduates looking
Arup has several offices across the UK and its Leeds to embark upon a global career in engineering design
office employs 450 people. The Leeds team offers a in the built environment. The Leeds office has a
full range of Arup services and is the global centre of number of collaborative projects underway with Leeds
excellence for Arup’s water business which focuses on University.
water infrastructure, water treatment, flood prevention
and hydrology. Arup’s Global lead for water is based in How has this benefitted you?
the Leeds office alongside their Head of Visual Arup’s Leeds office works closely with the City
Communications, Head of Press/PR for Africa, Europe Council, The University of Leeds, the Combined
& the Middle East as well as the head of digital Authority and Network Rail. As well as working on
transformation and the UK lead for their cities major local projects like flood alleviation for Yorkshire
practice. Water, the First Direct Arena, the HS2 station and the
Tetley Refurbishment, the Leeds team works
nationally for a number of London based clients. There
are a growing number of senior staff looking to
operate out of the Leeds office.Business Connections 25
CEG
What do you do? Why did you choose to locate in Leeds?
CEG (Commercial Estates Group) is an estates The company made significant investments in Leeds
management company, with a development arm, in the mid-1990’s and as a result they set up an
established in 1989. They have a capital value of office in Harrogate to act as a base for this
£800m, with their portfolio being two-thirds office investment in 1998. CEG eventually relocated to
space and one-third industrial sites. Their flagship Leeds in the early 2000s as it provided a more
development project is Kirkstall Forge in North West fruitful place to do business due to the hub of
Leeds which is a multi-use development area professional services within the city. This Leeds
encompassing over 1,000 new homes, 300,000 sq ft office became the management hub for CEG’s
of office space, 100,000 sq ft of retail and leisure portfolio stretching from Leicester to Scotland, with
space. London mirroring these functions for the South of
England. Leeds is the ideal setting for this due to its
Where is your business currently located? location in the centre of the North and its good
The company is headquartered in London with the quality transport links.
Leeds office being the second largest office, What are the benefits of being located in Leeds?
alongside two smaller offices in Birmingham and In terms of the property market Leeds is no different
Cornwall. CEG employ approximately 150 staff to the rest of the UK, bar London, having an
where 30-40 are building managers located across extremely tight property market. CEG felt the Leeds
the UK with 110 office staff, of which 60 are located market offered a more stable business community
in London and 50 in Leeds. The London office hosts than other major northern cities, such as
the executive functions of the business, below this Manchester, which is conducive to rational decision
level the two offices serve mirror functions. making, vital for a company such as CEG dealing in
huge investments. Further, the location of Leeds on
the door step to the Yorkshire Dales and other
world-class amenities gives employees a high
quality of life.Business Connections 26
Focus on...Manufacturing
CURRENT OVERVIEW SECTOR TRENDS
Numbers in 000s Leeds Leeds CR London • The increasing digital transformation of manufacturing,
including robotics, AI and data analytics - Made Smarter
Employment, 2016 25 123 105 Review
• Circular economy principles - recycling and reusing
Businesses, 2017 2 8 15
materials to improve output and lessen environmental
Recent Employ growth impact
-18% -6% -1%
(2010-16) • 3D printing will change the way products are made and
samples created
Employ. Specialisation 0.7 1.2 0.2 • Augmented reality provides real-time info & guidance at
the point of use.
• Uncertainty around Brexit and future competitiveness of
LEEDS POSITION the sector in the UK
• World leading engineering firm LBBC Technologies Home to national &
recently relocated to Leeds
international manufacturing
• A proposed Vocational Higher Education Institution for brands
Digital Manufacturing and Leeds Enterprise Zone
• Home to national/ international manufacturing brands
Golden-fry Foods, Arla & Northern Foods Largest number of STEM
• Leeds City Region has the largest number of STEM
graduated outside London
graduates outside of London
• Strong R&D institutions such as the 3M Buckley
Innovation Centre
Strong R&D institutions
• Location of only National Measurement Agency facility
outside LondonBusiness Connections 27
Focus on...Manufacturing
LONDON POSITION
• Queen Elizabeth Olympic Park Innovation District, a cluster
of academic institutions and business engaged in research, Provide a better platform for advanced
design, development and manufacture manufacturing and engineering to
• High Speed Sustainable Manufacturing Institute collaborate across both cities based on
• UCL robotics, Digital Engineering and Test Centre growing aspirations within the
• Applied machine learning lab at UCL Industrial Strategy for growth within
• The knowledge quarter – 92 academic, cultural, research, these sectors and the unique assets
scientific and media organisations available in both cities
• Pressure on industrial land for residential pushing firms out
of city
Opportunities:
• Both cities have emerging strengths and key assets relating to advanced manufacturing and engineering. Enabling collaboration
between these will be important in helping to foster more innovation opportunities between the two cities.
• It will be important to promote the Leeds Enterprise Zone to London-based businesses, highlighting the benefits of being based
in Leeds and the surrounding infrastructure and key assets available.
• By working in partnership with the Manufacturing Forum (working the Chamber of Commerce), Leeds should be actively
promoted to the London market.
• Build on the strategic aspirations within both cities to support the development of life sciences, health and medical sectors.
Improve collaboration between the two cities, and use this as a platform for joint funding bids (e.g. Industrial Strategy Challenge
Fund).Business Connections 28
Focus on...Retail and the Visitor Economy
CURRENT OVERVIEW SECTOR TRENDS
Numbers in 000s Leeds Leeds CR London • E-Commerce
• On-demand retail
Employment, 2016 43 152 697 • Recent rise of the leisure sector (especially food)
Businesses, 2017 6 24 97 • Restrained consumer confidence as interest rates rise
• Changing retail mix, with a move back towards
Recent Employ growth independent shops
-8% -5% 20%
(2010-16) • Need for improved in-store experience
Employ. Specialisation 0.8 0.9 1.0 • Weaker £ attracts foreign tourists to the UK
Presence of top-end brands /
LEEDS POSITION
HQs in the city
• Home to a number of top end brands HQs/retail outlets with
Burberry recently relocating functions to the area
• A word renowned landscape in the region including the
Yorkshire Dales National Park and Saltaire World Heritage World renowned landscape
Site and tourist attractions
• Future development within the sector and proposed
redevelopment of Headingly Stadium
• Extensive redevelopment of Leeds city centre including
redevelopment of the Majestic building into high-class
5th on Lonely Planet’s ‘Best
offices in Europe’ list
• Ranked fifth on Lonely Planet’s ‘Best in Europe 2017’ listBusiness Connections 29
Focus on...Retail and the Visitor Economy
LONDON POSITION Work to attract retailers already established in
• Third most visited city in the world, overseas tourism grown London who are looking to expand operations
25% since 2011 outside the capital. We will also work
• A number of world class visitor attractions including Tower alongside retailers looking to establish back
of London, Buckingham Palace and sporting facilities (e.g. office functions outside of London, following
Wembley) the recent example of Burberry
• Tourism is a targeted sector in the Mayor of London’s
Economic Development Strategy - promoted as a 24hr City Establish Leeds as a stronger secondary
• Enhancing Wi-Fi connectivity for the benefit of visitors destination within London’s international
• Home to top end brands HQs/retail outlets alongside
tourism market and promote the city as a
London fashion show weekend destination for Londoners
Opportunities:
• Leeds’ prominence as a retail destination in Yorkshire (and beyond) means that the council should be looking to attract
international retailers to the city, especially those already settled in London, but who might be looking to expand operations
nationally.
• Attracting these internationally recognised brands, will further secure Leeds’ reputation as an attractive place to do business,
both within the retail sector and beyond.
• For a city of this size, Leeds itself does not have a strong cultural or visitor economy profile internationally, or even nationally,
despite its many strengths.
• In partnership with VisitLeeds, Leeds should be promoted (alongside the wider Yorkshire region) to Londoners (e.g. adverts in
the Evening Standard, TimeOut) and international tourists in London (e.g. through leaflets in tourist information centres) would
position the city as a viable day/weekend trip from London.Business Connections 30
Asda
What do you do? majority of hiring into Asda House is through local
Asda is the third largest national supermarket firm in talent already living within the Yorkshire region.
the UK, with more than 165,000 colleagues serving However Asda has noticed an increasing number of
more than 18 million customers across in over 600 ‘regional returners’ - typically people originally from
stores. Asda is currently based in Asda House close to Leeds/Yorkshire, or with family in the local area, who
Leeds railway station having moved from Castleford in have worked away for a number of years, typically in
1988. the South. For this, Leeds is seen as an excellent
choice of location due to the wide range of business
How does your business currently operate? opportunities based centrally. Asda also attracts many
There are around 3,000 people employed across two graduates to the area, with many relocating to Leeds
head office sites in Leeds and a further 2,400 retail after obtaining a place on the Asda graduate
colleagues in stores across the city. All of Asda’s programme. The combination of working for a large
executive team is currently based in Leeds, with employer based in central Leeds is an attractive sell,
strategic decisions undertaken from this office. Asda with Asda’s graduate programme being particularly
does have an office in London (where fewer than 10 popular.
people are based), which hosts those who need to be How easy you find it to attract clients/producers to
in London (e.g. local property and government Leeds to conduct business?
relations teams). There are currently 15 main Asda
distribution centres in the UK, with two of these Leeds’ accessibility to the rail and motorways
located around London (Enfield and East London). networks is a major benefit for the business in terms
of staff being able to get to stores and clients being
Why did you choose to locate in Leeds? able to travel to Leeds. Improvements to some routes,
Asda has chosen to remain in Leeds, for three core particularly rail west-east connections would help
reasons: it can remain in touch with its heritage and improve connectivity to markets.
stay close to the business’s traditional heartland; have
strong communication links with customers and
stores; and have relatively easy access to talent. TheBusiness Connections 31
Focus on...Social Enterprise & the Third Sector
CURRENT OVERVIEW
Area of Social Enterprise Operations
• There is a strong tradition of social enterprise and third sector organisations in
both Leeds and London. These will range from locally-based self-help groups and
co-operatives, right through to multi-national charities
• Research from Social Enterprise UK found that around a third of social enterprises
in the UK are locally based, with a further quarter working across several local
authorities or a region. Nearly a fifth of social enterprise are working across
Europe or internationally.
LEEDS POSITION
• The third sector is estimated to employ around 13,000 people, and is fueled by
200,000 volunteers
• There are a number of strong local organisations working to support the sector,
including the Leeds Community Foundation and Voluntary Action Leeds.
• Many well-known social businesses based in the city, including John Lewis and
Leeds Building Society.
LONDON POSITION
• Home to the headquarters of many large multi-national charities and social
enterprises, including Save the Children, NSPCC, WaterAid UK and Cancer
Research UK.
• It is estimated that around 30% of the UK’s voluntary sector workers live in either
London or the South East.
• Given large number of firm’s headquartered in London, there is an active CSR
Source: State of Social Enterprise Survey, 2017
movement, with many firms in the City supporting initiatives.
Opportunities: Attract national social enterprises & third sector organisations looking to establish back office functions outside
of London, to benefit from cheaper premises/running costs outside of London
Work alongside companies based in London to ensure that CSR opportunities are available in the Leeds offices, and that
fundraising can benefit Leeds-based charities.Business Connections 32
SHINE Trust
What do you do? Why did you choose to locate in Leeds?
SHINE is registered charity who provide funding and SHINE’s relocation to Leeds was influenced by the
support to schools and teachers to help them raise city’s transport connections to all parts of the Northern
attainment for children from low income families. They Powerhouse area, enabling them to access the
trial out new ideas to improve teaching and learning in schools and teachers requiring funding and support.
schools and help the best ideas grow to scale. Since SHINE has been able to take advantage of the
August 2000, SHINE has invested more than £25 opportunities generated by the Northern Powerhouse,
million in projects helping more than 400,000 children and ensure it is able to reach its target audience.
from 6,000 schools. The vibrant culture of Leeds, and the large number of
graduates coming from the city has also helped to
Where is your business currently located? support the development of SHINE, with the current
CEO, Fiona Spellman, being a former University of
In the summer of 2017, after a wide-ranging review of Leeds graduate.
its grant making, SHINE decided to move its office
base and focus to Leeds to carry out a new strategy
for the North of England. This move has enabled them What challenges still remain for the development of
to be closer to its new focus areas, in the North East, Leeds’ CVS sector?
North West, and Yorkshire and Humber regions, and Although SHINE has benefitted from being located in
take advantage of some of the opportunities presented Leeds, it is acknowledged there are still challenges in
within the Northern Powerhouse. The move growing the sector locally. With many of the city’s
northwards was supported by SHINE’s patrons, largest firms being headquartered in London, CSR
including Sir Alex Ferguson and Lord Jim O’Neill opportunities are less developed in Leeds. More work
(board member of the Northern Powerhouse). needs to be done to ensure that local charities are
able to benefit from CSR activities taking place within
the city.Business Connections 33
Commercial Property
Leeds and London’s business connections are partly reflected in commercial property ownership, with London-
based businesses and investors having a strong presence in Leeds’ commercial property market. Consultations
with local commercial property agents shows there is increasing attention being placed in the Leeds market
nationally and internationally. Higher yields are primarily a reason for this (with typically units in Leeds having a 5-
6% yield compared to 3.5-4% in London), as is the increasing policy focus brought about by the Northern
Powerhouse.
Office
Over half of Leeds’ office space is currently owned
by businesses/investors in London, as is nearly two-
thirds of retail space. Around a third of Leeds’
industrial space is owned by London-based
businesses, with a similar proportion owned by
Leeds-based owners.
Location of Commercial Property Owners in Leeds
% London-owned % Leeds-owned
54% 27%
Office
7,070,000 sqft 3,560,000 sqft
33% 33%
Industrial
6,130,000 sqft 6,090,000 sqft
62% 14%
Retail
5,100,000 sqft 1,160,000 sqft
London-owned Leeds-owned Other or N/A
Source: CoStar, 2018
Size of bubble is proportional to the amount of space
Note: Only considers space where the owner is known.Business Connections 34
Commercial Property
Data on the ownership of office, industrial and retail space in Leeds, suggests that London-based businesses/
investors tend to prefer space in the city centre, with peripheral sites less likely to be owned by London-based
businesses.
Industrial Retail
London-owned Leeds-owned Other or N/A
Size of bubble is proportional to the amount of space
Source: CoStar, 2018Business Connections 35
Overarching Key Opportunities
Short term – in the next year Medium term – 1 to 3 years
• Continue Leeds in London programme with focus on • Work alongside the Manufacturing Forum, Digital
attracting large multinationals to establish ‘2nd’ UK Board, Leeds Legal Network, and the developing
base in Leeds Financial & Professional Service Network and
• Target businesses within key growth sectors, which Infrastructure Group, to develop platforms from
have strong overlaps with London’s economy, which opportunities in London can be advertised,
primarily focusing on: and promotion can be done to attract businesses to
Leeds.
• Crossovers between digital and health sectors
• With the increasing recognition of the regions, Leeds
• London’s life sciences sector and opportunities must needs to ensure enough commercial space is
for collaboration with Leeds digital sector supplied to meet growing demand.
• Digital handling of data, including links to the
financial sector
Further opportunities within each growth sector are
• Begin discussions with the Mayor of London and presented below.
London & Partners over the role Leeds can play in
supporting London’s growth (especially given the
current development of the Mayor’s Economic
Development Strategy). Work with the Mayor of
London to support ambitions to bring together UK
cities, business leaders and institutions to maximise
opportunities for innovation, business growth and
market expansion.
• Continue promoting Leeds to a wider audience by
hosting international events and conferences (e.g.
Leeds International Festival, Leeds Digital Festival,
Leeds International Piano Competition)Academic Collaboration
Academic Collaboration 37 Universities Leeds City Region has the highest concentration of higher education institutions in the UK outside of London. The region offers nine universities, each of which has their own unique specialisms and strengths. Many of these universities have close connections with London, either through their research programmes, alumni or teaching programmes. None of them yet has a physical presence in London, unlike some universities who have recently established campuses (e.g. Liverpool, Warwick, Loughborough, Coventry). The University of Leeds is a part of the White Rose Consortium (along Universities of York and Sheffield). It is a strategic partnership which builds on each university’s strengths through collaboration. It works with a range of partners in the UK and EU (using its Brussels office to influence EU policy) and has secured over £160m in funding since its establishment in 1997.
Academic Collaboration 38
Subjects
The student population within the Leeds City Region closely complements its target sectors. This is supplying the
digital economy with the skills required to thrive and grow amid a national shortage of such skills. The region has the
second largest number of STEM graduates, after London, but the range of talent is not limited to these disciplines.
Dedicated ‘arts’ universities and specialisms in health, such as the University of Bradford, ensure a vibrant and
dynamic future graduate pool.
The distribution of subjects studied within London mirrors that of Leeds City Region helping to foster close academic
ties and collaboration.
Subjects Studied in Leeds City Region & London Universities (selected Growth Sectors), 2016/17
Construction & Total Students
Health Business Creative & Digital
Manufacturing (all courses)
No % No % No % No % No
The University of Bradford 5,020 46% 1,545 14% 740 7% 1,435 13% 10,960
Leeds Arts University - 0% - 0% 1,425 100% - 0% 1,425
Leeds Beckett University 6,415 26% 5,315 21% 3,420 14% 945 4% 24,885
Leeds Trinity University 795 22% 270 7% 485 13% - 0% 3,625
The University of Leeds 7,930 24% 3,700 11% 3,300 10% 3,340 10% 33,300
York St John University 1,605 27% 725 12% 955 16% - 0% 5,940
The University of York 3,445 19% 1,165 7% 1,690 9% 610 3% 17,900
The University of Huddersfield 3,945 22% 3,015 16% 3,755 21% 1,810 10% 18,280
Leeds Total: 29,155 25% 15,735 14% 15,770 14% 8,140 7% 116,315
London Total: 91,020 25% 53,645 15% 60,995 17% 21,585 6% 358,900
Source: HESA, HE student enrolments by HE provider and subject of study, 2016/17.You can also read
