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 39,000 new graduates in the city region each year London to help improve their business 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% Strong net inflow of people into Leeds of industrial space Migration in 2016 • Leeds from London aged 18-20, heading for Strongest potential for sector collaboration across some of local universities Leeds’ targeted growth sectors: 4,300 • Net loss of people from Leeds aged 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 London over 30, seeking a better quality of life real estate; public services; and finance & insurance sectors Transport Connections Academic Collaboration trains per day between Leeds and Leeds City Region has the highest concentration of higher 48 London, taking an average of 2hrs 12mins education institutions in the UK outside of London. train journeys between Leeds and 9 universities across the city region, with 4 located in Leeds 8,500 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, +35% increase in passenger numbers over with a dynamic flow of two-way expansions. 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 PROFESSIONAL CREATIVE AND & THE AGEING CONSTRUCTION POPULATION SERVICES DIGITAL 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 mutual benefits arising from strategic The Third Economy (Tourism) growth opportunities and the realisation Sector of corresponding employment Low Carbon opportunities. Goods & The Mayor of London has already set out Health, Medical & The Services 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
19% 20% 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, 2017 Business Connections 11 Focus on...Health, Medical & the Ageing Population
CURRENT OVERVIEW SECTOR TRENDS Forecast strong growth globally Numbers in 000s Leeds Leeds CR London • • 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 11% 8% 21% • Healthcare informatics (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 nationally Business 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 Health functions in Leeds London/South East through facilitating and supporting 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 innovation in the financial sector driving growth (e.g. retail Businesses, 2017 5 15 100 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
Second largest financial & LEEDS POSITION 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 & building society HQs • Home to 30 national and international banks, and hosts the HQs of three of the five largest building societies
• University of Leeds ranked 4th nationally for Accounting and Finance degrees Strong academic background Business 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 available and networking • Centre for the largest healthcare data platform in the 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 sector Business 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 business (HQ) functions in London (e.g. data • High office and industrial rents putting pressure on 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, and Business 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 economy Business Connections 23 Focus on...Construction
LONDON POSITION Work to provide better platforms for Leeds- based construction businesses to develop • Closely aligned to one of London’s key sectors identified in 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 graduated outside London • Leeds City Region has the largest number of STEM 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 London Business 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 -8% -5% 20% independent shops (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 5th on Lonely Planet’s ‘Best redevelopment of the Majestic building into high-class offices in Europe’ list
• Ranked fifth on Lonely Planet’s ‘Best in Europe 2017’ list Business 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 tourism market and promote the city as a • Home to top end brands HQs/retail outlets alongside 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. The Business 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, 2018 Business 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 Infrastructure Group, to develop platforms from • Target businesses within key growth sectors, which 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. Academic Collaboration 39 Examples of Academic Collaboration
UKCRIC–Advanced Infrastructure Materials Lab £10m from 2016-2021 Academic partners include: University of Leeds; Imperial College London; University of Manchester Business partners: UK Collaboratorium for Research in Infrastructure and Cities • The University of Leeds was selected, as one of three universities, for the creation of a new suite of laboratories, the Advanced Infrastructure Materials Lab, designed to build a world class national infrastructure research capability • The focus of the research using these facilities will be to develop better materials for national infrastructure; materials with enhanced technical performance, longer life, and reduced greenhouse gas footprint, which will be more easily recycled and will contribute to lower capital- and recurrent- cost infrastructure.
Coherent Terahertz Systems (COTS) Study for Widespread Application - £7m from 2012- 2017 Academic Partners include: University of Leeds; UCL; University of Cambridge Business Partners include: European Space Agency; AIRBUS UK; IBM • Study focusing on the terahertz (THz) frequency for scientific and commercial applications. The University of Leeds is home to state-of-the-art THz quantum cascade laser which is part of the key infrastructure driving the project. • Researchers from London and Leeds, with other institutions, will help develop applications including short-range high-data-rate wireless communications, information processing, materials detection and high resolution imaging in three dimensions. Academic Collaboration 40 Examples of Academic Collaboration
UK Transport Research Centre £5m from 2009 to 2011 Academic partners: University of Leeds; Imperial College London; UCL Business partners: Scottish Government, Department for Transport • The Research Centre was designed to be a national collaborative research centre to encourage a much greater involvement of social scientists in addressing major transport problems • Further, it aims to broaden the skills base among postgraduate students and young researchers; and to stimulate dialogue between academics, practitioners, policy makers and other key stakeholders • The University of Leeds represents the only non-London based outlet of the Research Centre and a key contributor to studies on the consequences of IT developments across the economy on future demand for transport
Future Liquid Metal Engineering Hub - £50m from 2015-2022 Academic partners include: University of Leeds; Brunel University; Imperial College London Business partners include: Primetals Technologies (London); Lotus Engineering; Jaguar L-R; • Leeds academics are playing a leading role in developing the technologies driving the Hub a business academic research collaboration • The Hub aims to develop technologies which supply the global demand for metallic materials through full circulation of secondary metals. To be achieved by reduced usage, reuse, remanufacture, closed-loop recycling and effective recovery and refining of secondary metals. • This will not only address the environmental cost of metal extraction but increase the competitiveness of UK firms in this market, a cornerstone of the wider manufacturing economy Academic Collaboration 41 Examples of Academic Collaboration
Emulsion Structure: A Study into Diet Control £0.5m from 2011-2015 University Partners: Imperial College London; University of Leeds • Experimental research into understanding the link between fatty acids and satiety within the human digestion process • The study utilises medical scientists from Imperial in collaboration with the world renowned department of psychology at the University of Leeds to build a solid research design • Evidence to be used to inform the growing market into high satiety foods and support health claims for new food products • The generic design principles established will allow the design of a wide range of food and beverages to influence appetite and body weight.
Retail Business Datasafe - £7m 2017-2020 University partners: University of Leeds; University of Liverpool; University College London; University of Oxford Business partners: Virgin Media; British Gas; Tesco; GSK; O2; M&S; EasyJet • The vision of the Retail Business Datasafe (RBDS) is to create a service that will open up the data resources routinely collected by the retail business sector to academic research, training and capacity building • This will benefit anyone who needs retail data for their research activities, whether interested in the form and function of the retail sector itself or its wider impacts upon society, for example in health, planning, transport or education provision • The public face of the work will be developed in association with the Leeds University Consumer Data Research Support Service. Academic Collaboration 42 Imperial College London
What recent collaborations have you had with Leeds-based universities? Major collaborations which Imperial College are currently engaging on with the University of Leeds includes UKCRIC–Advanced Infrastructure Materials Lab and the Future Liquid Metal Engineering Hub. How have these collaborations come about? Many of these collaborations have come about through peer-to-peer networks and research specialisms. A large number of Imperial’s staff and researchers are former graduates from the Leeds region, and so relationships between the two universities can be maintained through their existing connections. What are you doing to encourage academic collaborations elsewhere? Imperial College actively encourages collaborations which other academic and research institutions. Recently it has set up a number of seed funds which aim to increase collaboration and innovation between Imperial and other universities as described below.
MIT-Imperial Seed Fund Tsinghua-Imperial Research and Innovation Fund A seed fund developed between MIT and Imperial College Developed a join seed fund which aims to kick-start innovative London, which aims to help kick-start early stage, risky and research projects and concepts that are showing signs of ‘blue skies’ research ideas that might not otherwise be promise but are at an early stage in development and need pursued. The Fund promotes and supports early-stage funding to progress. collaboration among academics, researchers and students at The awards are expected to cover small-scale experiments, MIT and Imperial by facilitating exchange between the development of prototypes, and will enable academics and participating research groups through provision of grants to students from both institutions to collaborate and exchange cover travel, workshops, meetings, hackathons, networks and ideas more easily. Imperial and Tsinghua have invested an other activities to explore research directions. The Seed Fund’s initial $300,000 into the programme over three years. indicative overall annual budget is up to a total of $100,000 / £66,000. Academic Collaboration 43 Academic Presence in London
A number of non-London based universities have Case Study: recently established campuses in London. None of Leeds City Region’s universities have currently done University of Liverpool in London this to date. These campuses typically help to improve and access networks within London, The University of Liverpool were the first non-London especially with London-based universities, based Russell Group university to open a campus in businesses and the international market. London, providing a range of postgraduate courses around Finance, Accounting, Business and Communication. In addition to providing space for teaching, the campus in London places the university well for Case Study: taking advantage of networks with the professional community both nationally and internationally. It not Anglia Ruskin University in London only opens doors to students wanting to study in the Capital, but also opens doors for businesses wanting Anglia Ruskin’s University campus in London offers a to develop mutually beneficial partnerships alongside business-orientated education for students, with a the university’s academic offer. key focus on employability through placements with companies in London. The university’s facilities can also be hired by Liverpool-based companies wanting a short-term The campus currently helps over 400 businesses a base in London, or a venue for hosting meetings. This year deliver educational and commercial projects, and allows for a ‘stepping stone’ into London for is helping develop key networks between students, companies wishing to expand their operations. the university and London-based businesses. In total, over 900 London-based businesses have partnered work placements or internships for Anglia Ruskin students. Academic Collaboration 44 Key Opportunities
Short term – in the next year • Understand how the White Rose Consortium will attract funding and influence policy in the future. The Consortium currently has an office in Brussels to influence EU research policy, although this approach may need to be refined following Brexit, with more of a focus on London. Medium term – 1 to 3 years • Work alongside Leeds universities to promote collaboration opportunities between the two cities. Use the combined strength of the White Rose University Consortium, to help promote the research strengths of the three universities (Leeds, Sheffield & York) to London. • Understand how existing links between the two cities can be taken advantage of (e.g. the President and Provost of UCL, Professor Michael Arthur, was the Vice-Chancellor of the University of Leeds (2004-13)). Long term – 4+ years • Look to establish a university presence in London, providing a platform for Leeds-based businesses in London (similar to University of Liverpool in London) alongside desk and meeting space for Leeds businesses looking to connect in London. Transport Connections Transport Connections 46 Rail & Air Connections
Virgin Trains East Coast provide around 48 train journeys per day between Leeds and London, taking train journeys an average of 2 hours and 12 minutes. This carriers 8,500 between Leeds and over 8,500 people between the two cities each day, London each day accounting for over a third of journeys on the East Coast network. Demand for services has been increasing over the last five years, with a 14% in all journeys, and a 19% increase in business increase in business train travel over the same train travel over the period. This has been a higher real increase than +19% experienced across all other cities on the Virgin last five years Trains East Coast network.
British Airways offers two flights in each direction between Leeds Bradford Airport and London passengers flying Heathrow everyday. between Leeds and This service was used by 160,000 passengers last 3,100 London each week year, an increase of 35% over the last 5 years. Leeds’ connection to Heathrow provides global connections to the rest of the world, but it also helps provide an increase in passenger important link to London, with 30% of journeys being +35% numbers over the last point-to-point. Recently BA has announced a five years reduction in the number of flights between the two cities, citing low demand. Transport Connections 47 Working Patterns
Census data gives an indication as to the volume of people commuting between the two cities, the age of these people and Travel to work patterns, 2011 how they commute. Those aged between 25 and 34 are most likely to commute Number of Journey* between Leeds and London (based on unequal age groupings), Commuters with the numbers doing so reducing as people age. A third of people commuting from Leeds to London are Leeds to London 1,200 commuting to Westminster, with other popular destinations including Camden, Heathrow Airport and Canary Wharf. London to Leeds 800
Travel to work patterns by age and mode of travel, 2011
50%
40%
30%
20%
10%
0% Aged 16-24 Aged 25-34 Aged 35-49 Aged 50-64 Train Coach Driving a car or van
London to Leeds Leeds to London
*Based on 2011 census merged local authority districts – 32 constituent LAs for London and Leeds for Leeds Transport Connections 48 Key Opportunities
Short term – in the next year • Build the case for increasing the number of flights between Leeds and London following the recent reduction in BA’s flights between the two cities. Medium term – 1 to 3 years • Work alongside current train operators to ensure continued capacity to support future growth in business & leisure travel. • Look to attract other airlines which may be able to offer routes between the two cities (using other London airports, e.g. Flybe from Manchester to London Southend). Long term – 4+ years • Better understand how improved connections between the two cities (through HS2) will impact on economic connections. Examine how this opportunity can best be exploited, and how it will impact on labour market and business connections (with journey times to London reduced by nearly an hour) Population & Labour Market Connections Population & Labour Market Connections 50 Migration
Data on migration between Leeds and London shows there is a strong connection between the two cities. There is a strong net Migration in 2016 inflow of people into Leeds from London aged 18-20, heading for local universities. However, there is a net loss of people aged between 20 and 30 of around 3,000 people each year. 3,400 people After the age of 30, there is a net inflow of people into Leeds from London, presumably those seeking to raise their families Leeds London out of London, or a better quality of life. Net Migration between Leeds and London in 2016 4,300 people
600
400
200
0 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70
-200
-400
-600
-800
Net Leeds CC Net Leeds City Region Source: ONS Migration Flows, 2017 Population & Labour Market Connections 51 Migration
Migration flows between Leeds and London have been changing over the last five years, with an amplification of the current migration flows between the two cities. More people aged over 25 moved from London to Leeds compared to five years ago, with more people moving in the other direction at university age. With rising living costs in London expected to continue into the future, it can be expected that this trend is likely to continue going forward.
Change in Net Migration between Leeds and London between 2011 and 2016
200
150
100
50
0 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 -50
-100
-150
-200
Change in Net Flow to/from Leeds and London (2011-16) Change in Net Flow to/from Leeds City Region and London (2011-16)
Source: ONS Migration Flows, 2017 Population & Labour Market Connections 52 Graduate Retention Home Region of Newly-Registered Students, 2016/17 Leeds benefits from a large number of universities within the local area, and this presents local businesses with a Region of Study strong network of graduates. The high concentration of Home higher education institutions produces 38,900 graduates Yorkshire & London a year, with over 15,000 of these in STEM subjects. Leeds Humber itself is home to four universities. Although many of these graduates come from within the local area, the migration Greater London 158,350 8,600 data shows a significant net inflow from London for people of student age. Data from HESA on the domicile of West Yorkshire 1,900 34,160 students based in Yorkshire & Humber, shows that around 8,600 students have moved from London to Source: HESA Student enrolment by domicile and region of HE Yorkshire & Humber. By comparison, around 1,900 provider, 2016/17. students from West Yorkshire went to London-based universities. Destinations of Graduates, 2014/15 After graduation, many of these graduates choose to remain in the Leeds (and Yorkshire & Humber) area. Of Home Region of Region of Employment those studying at universities in Yorkshire & Humber in Region University Y&H London 2014/15, 10,450 were employed in the local area, where as 1,010 were employed in London. Those who originally Yorkshire & Y&H 10,280 270 lived in London before moving to Yorkshire & Humber for Humber university were far more likely to return to London for (Y&H) London 210 415 work, with 740 returning to London (compared to only 170 who stayed in Yorkshire & Humber). When speaking with Y&H 170 740 local businesses, many commented that Leeds graduates London were unaware of the opportunities available in Leeds, London 70 19,660 with many assuming that they would have to move to London to secure jobs (this was particularly prominent in Source: HESA Destinations of Leavers Survey 2014/15 the Big 4). Population & Labour Market Connections 53 Key Opportunities
Short term – in the next year • Work alongside local employers to improve levels of graduate retention within Leeds. Recent schemes such as the In Leeds Day programme have improved awareness amongst local graduates of the opportunities available in the city (without the need to move to London. Medium term – 1 to 3 years • Increase promotion of Leeds’ key selling points to London-based businesses and potential returners (e.g. high quality of life and low cost of living). Use London-based publications (e.g. Evening Standard, TimeOut, Balance Magazine) to publicise Leeds in a positive manner. • Work with Leeds-based employers to advertise key opportunities/sectors to London graduates at open days, promoting the quality of life and cost of living in Leeds. Investment Flows Investment Flows 55 Natural Trade and Investment Partners
Leeds and London are natural trade and investment partners, with a dynamic flow of two-way expansions.
For foreign-owned companies that land in London first, find that Leeds is the perfect next step; And for foreign firms that make Leeds their first UK city, London is a logical and easy expansion.
In the last two years more than thirty ambitious businesses have moved between the two cities and established a new facility in Leeds or London.
The example of Burberry demonstrates the clear business case for London firms to move key functions to Leeds to access a wider talent pool and to achieve considerable cost-efficiencies.
A growing number of business networking groups and events are further facilitating trade and investment linkages between the two cities, with Young Entrepreneurs in Property to London Tech Week.
There are significant opportunities (and potential threats) around the proposed merger of Leeds-headquartered ASDA and London-based Sainsbury’s.
A proactive strategy of cooperation between Leeds and London investment promotion agencies can further enhance the positive synergies around trade and investment. Investment Flows 56 Strong Two-Way Flow of Ambitious Firms
In the last two years more than thirty ambitious businesses have expanded between the two cities.
These have involved firms across all sectors and industries, but with a sizeable number from creative and digital, and financial and business sectors.
This is a positive sign of the vibrancy and growth of the Leeds economy and the desire of its high- growth firms to remain there, whilst expanding into London to tap into wider markets.
In most cases these have been expansions rather than relocations, so provide a boost to both cities.
Burberry Zeal Carter Towler Julius Baer Quadrant Group Bert & May Irwin Mitchell Brawl Research Bods StickyEyes Inlinkuk Darnton B3 Vantage Professional Security Key Capital Partners CES PPB Berwin & Berwin Brewin Dolphin eWe Audacia Ea Consulting CMS TCS KPMG/Cyberinc Kwizz Bit Perform True North Investment Flows 57 Burberry
In 2017, fashion icon Burberry opened a major Burberry said connectivity between its London new presence in Leeds that will see around 400 and Leeds bases will be of the utmost new jobs created. The opening of importance and its head office will remain in Burberry Business Services brings together London. The fashion manufacturer and staff from Burberry’s finance, HR, procurement, retailer said that one of the considerations customer service and IT teams to simplify during the office location decision process processes and teamwork across functions. The was Yorkshire's connection with universities expansion includes the relocation of around 100 and colleges. It said it needs a highly skilled IT roles from London. workforce which it feels that Leeds offers, with opportunities for graduate roles and apprenticeships. It added that the historical Julie Brown, CFO and COO at Burberry, said: connection with Burberry and its trench coat manufacturing in Yorkshire marries well with Leeds as a developing centre and a cultural "Our choice of Leeds hub. underlines our belief in the strong talent available in the North of England and we see it as an attractive destination for our business." Investment Flows 58 Key Opportunities
Short term – in the next year • Identify and engage Leeds alumni based in London who are in key advisory roles. Linkedin lists more • Leeds should actively promote the two-way flow of ambitious companies that are expanding to and from than 260,000 alumni from University of Leeds and each city. This should be a key message in all Leeds Beckett University, of which some 35,527 are inward investment marketing collateral with London currently based in London. being positioned as a partner not a competitor. Long term – 4+ years • Relationships should be enhanced with key • Consider establishing a formal ‘Leeds in London’ investment promotion groups in the capital like programme which would provide a serviced-office London & Partners (especially through their Global type arrangement for Leeds firms visiting the capital City to City programme) and The City UK with and could be used to host inward investment regular attendance at networking events and active meetings and events in a Leeds-branded participation in their programmes. environment. Similar models have been created by Liverpool, Derby and Nottingham with a fair degree • Host a series of targeted receptions around key business areas in London including a presence at of success. This linked to an earlier objective to look major events such as London Tech Week. at creating a university base in London for Leeds’ universities. • Use the potential ASDA-Sainsbury’s merger to highlight the strengths of Leeds as a headquarters location and the opportunities in the city for the merged business. Medium term – 1 to 3 years • Networking groups active in both cities like Young Entrepreneurs in Property and Tech London Advocates should be encouraged to promote the synergies between the cities. Positioning Leeds Positioning Leeds 60 Leeds and London’s Connections
Much of the evidence suggests that there already exists a strong relationship between the Leeds and London economies, facilitated by labour market, transport and investment flows between the two cities. Leeds provides a familiar and strong offer for London- based businesses, with the city reflecting many of London’s economic characteristics and offering a quality of life and cost of doing business that outperforms the capital in many respects. This section provides more detail on the strong offer that Leeds has for prospective London-based businesses looking to move to Leeds. Positioning Leeds 61 Business Environment Leeds has:
Second highest Positive wage growth, with productivity levels (GVA average earnings growth of 6% per hour) of the core cities between 2014 & 2015
Highest number of fast 100 spin-out companies from Major new industrial spaces nd growing firms outside London Leeds University – 2 highest developed in the Aire Valley and Cambridge number of any UK university Enterprise Zone, Thorpe Arch and West Leeds
Source: Leeds Talent & Skills Plan, 2017-23 Positioning Leeds 62 Business Environment Office Vacancy Rate Leeds has become an increasingly attractive 20% place for businesses. • The Business Location Index rates Leeds as 15% the fourth most attractive city outside of London for inward investment. 10% • The EY Attractiveness Survey, found that foreign direct investments into Leeds have increased significantly over the last two 5% years. Leeds has moved from bottom of the 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD core cities to second place. Leeds Core London Core & Canary Wharf • Leeds’ office market has been rapidly expanding in recent years, with over 770,000 Office Average Rents sqft currently under construction (Leeds Crane Survey 2018). £60
• More than 380 hotel bedrooms were £50 delivered in 2017 – the highest ever recorded. £40
Leeds offers an attractive business £30 environment, with low rents and available £20 office, retail and industrial space available for rent, when compared with London. £10 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD
Leeds Core London Core & Canary Wharf
Source: CoStar, 2018 Positioning Leeds 63 Labour Market
Over 1.3 million people live within 10 miles of Leeds Labour Market Statistics City Centre, and 4.8 million within 30 miles. Leeds has good regional and national transport connections which Leeds CC London make it accessible to workers from a wide area. Median wages for full- Leeds benefits from a strong network of graduates. £28,300 £33,700 The city region is home to the highest concentration of time employees, 2017 higher education institutions outside of London, Average house price, £194,000 £592,400 producing 39,000 graduates a year, with over 15,000 of 2017 these in STEM subjects. Leeds itself is home to four universities, one of the largest colleges in the country Housing affordability 7.2 16.8 in Leeds City College, and specialist provision through ratio Leeds College of Building and Leeds College of Music. Typical salaries for employees in the city are slightly % degree-level or above 34% 51% below the national average, with a median wage of £28,600. % homeworkers 8% 10% Leeds’ popularity has seen house prices in the city rise over the last few years, with a 4% increase in 2017 – the fourth highest growth rate of any UK city. The Claimant count, % 2.2% 1.9% average house price in the city is £194,000, two-thirds lower than in London. Leeds has embarked on an ambitious housing growth strategy, with over 3,300 new Source: ASHE, ONS, 2017; Centre for Cities, 2018 and converted homes developed in Leeds last year - the highest number across the Core Cities. Positioning Leeds 64 Quality of Life
Leeds has been named as the best city in Britain for quality of life in the Arcadis Sustainable Cities report. The large number of cultural and sports attractions in the city combined with its proximity to the Yorkshire Dales give the city an attractive proposition. Key attractions within the city include: • Art (Leeds Art Gallery) • Carnivals (Leeds West Indian Carnival) • Museums (the Royal Armouries, Leeds City Museum) • Music (Opera North, Northern Ballet, Leeds Arena, Leeds Festival) • Sport (Leeds United, Leeds Rhinos, Yorkshire Cricket Club) Estimates on personal well-being also finds that Leeds has a higher life satisfaction and sense of worthwhile than London, with even higher rates across Leeds City Region.
ONS Personal Well-being Index, 2017 Leeds CC Leeds CR London Life Satisfaction 7.7 7.8 7.5 Worthwhile 7.9 8.0 7.7 Happiness 7.5 7.6 7.5 Anxiety 3.2 2.8 3.1
Source: Headline estimates of personal well-being, ONS, April 2016 to March 2017 Positioning Leeds 65 Leeds Performance Relative to London & Core Cities
Relative to other core cities in the UK, Leeds Centre for Cities Ranking, 2016 performs well, having high levels of earnings, business churn and private sector employment Ranking is Highest to Lowest except where stated alongside a highly economically active workforce. London Leeds Recent evidence from Centre for Cities found that big cities in the North and the Midlands are Average Weekly Workplace Earnings 1st 3rd outperforming the rest of the country in attracting (£) jobs and residents to their city centres. st th Leeds is a rapidly expanding city, with urban growth Business Churn Rate (%) 1 4 in Leeds amongst the strongest in the country, with the number of people living and working in the CO2 Emissions per Capita (tons) 11th 1st centres of Leeds, Manchester, Birmingham and Liverpool soaring compared to other cities across Employment Rate (%) 2nd 3rd the country. st th The population with each of these city centres has GVA per worker (£) 1 4 grown more than six times faster than that of Ratio of Private to Public Sector 1st 2nd London between 2002 and 2015. Jobs growth has Employment also been significantly higher, with Leeds seeing Working Age Population with No 34% growth in the number of people working in the Formal Qualifications (%) 3rd 4th city centre since 1998 – with a total of 32,000 new Lowest % (1st) to highest % jobs – compared to 22% for the capital. The city centre population of Leeds has grown by 151% over Source: Centre for Cities, 2017 the same period. Note: Leeds and London ranked against the nine other largest cities nationally based on GVA produced: Manchester, Birmingham, Glasgow, Bristol, Edinburgh, Newcastle, Sheffield, Liverpool and Nottingham. Opportunity Mapping Opportunity Mapping 67 How to Build on Leeds & London’s Connections
Leeds’ relationship is already strong, with its position as the UK’s second largest financial and legal centre, meaning that there are already many well-established connections between the two cities. Improving Leeds’ and London’s relationship with each other provides the opportunity to attract more investment and talent into Leeds, and help to make Leeds even more competitive relative to its Core City rivals. In addition, more investment into Leeds’ economy will help develop the city, and provide a more sustainable and resilient city. Through the evidence collection and case study collection, a number of key opportunities have been identified which have the potential to improve the relationship between Leeds and London. These have been shown throughout the report, and have been assessed as to the most appropriate timeline for their delivery. The following time periods have been used to show an indicative timescales: • Short term – in the next year • Medium term – 1 to 3 years • Long term – 4+ years Opportunity Mapping 68 Opportunities for Leeds
Short-term opportunities – in the next year • Continue Leeds in London programme, with focus • Continuing promoting Leeds to a wider audience by on attracting large multinationals to establish ‘2nd’ hosting international events and conferences (e.g. UK base in Leeds Leeds International Festival, Leeds Digital Festival, Leeds International Piano Competition) • Target businesses within key growth sectors, which have strong overlaps with London’s economy, • Understand how the White Rose Consortium will primarily focusing on: attract funding and influence policy in the future. The Consortium currently has an office in Brussels • Crossovers between digital and health sectors to influence EU research policy, although this • London’s life sciences sector, and approach may need to be refined following Brexit, opportunities for collaboration with Leeds with more of a focus on London. digital sector • Work alongside local employers to improve levels of • Digital handling of data, including links to the graduate retention within Leeds. Recent schemes financial sector such as the In Leeds Day programme have • Begin discussions with the Mayor of London and improved awareness amongst local graduates of London & Partners over the role Leeds can play in the opportunities available in the city (without the supporting London’s growth (especially given the need to move to London. 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. Opportunity Mapping 69 Opportunities for Leeds
Short-term opportunities – in the next year • Build the case for increasing the number of flights between Leeds and London following the recent reduction in BA’s flights between the two cities. • Leeds should actively promote the two-way flow of ambitious companies that are expanding to and from each city. This should be a key message in all inward investment marketing collateral with London being positioned as a partner not a competitor. • Relationships should be enhanced with key investment promotion groups in the capital like London & Partners (especially through their Global City to City programme) and The City UK with regular attendance at networking events and active participation in their programmes. • Host a series of targeted receptions around key business areas in London including a presence at major events such as London Tech Week. • Use the potential ASDA-Sainsbury’s merger to highlight the strengths of Leeds as a headquarters location and the opportunities in the city for the merged business. Opportunity Mapping 70 Opportunities for Leeds in Growth Sectors
• Increase collaboration to support • Capitalise on Leeds’ strengths in innovation, building on presence of big data and data analytics NHS Digital and strengths in digi- • Promote Leeds Digital Festival to health firms HEALTH, MEDICAL London audience Attract London-based partners to & THE AGEING • CREATIVE AND • Attract footloose creative & digital POPULATION Leeds Innovation District and the DIGITAL firms seeking cheaper premises Health Innovation Gateway and back-office functions (e.g. data storage / analytics) • Increase collaboration across advanced manufacturing sectors • Leeds’ strengths in digital sector • Promote Leeds Enterprise Zone to need to be showcased to London- London-based businesses market, e.g. 3D modelling & VR. MANUFACTURING • Promote Leeds by working in • Promote Leeds opportunities partnership with Manufacturing through new Infrastructure Group Forum CONSTRUCTION (once established) • Improve collaboration between Leeds and London-based firms, especially in fintech & cybersecurity • Attract national organisations FINANCIAL AND • Attract footloose firms struggling looking for cheaper premises / with rising rents, and those requiring running costs PROFESSIONAL more space for back-office functions SERVICES SOCIAL • Work alongside London-based (e.g. finance / HR) ENTERPRISE & THE companies, to ensure CSR THIRD SECTOR opportunities are available in • Attract international retailers already Leeds offices. based in London to Leeds • Better establish Leeds as a stronger secondary destination within RETAIL AND THE London’s international tourism VISITOR ECONOMY market and promote the city as a weekend destination for Londoners Opportunity Mapping 71 Opportunities for Leeds
Mid-term opportunities – 1 to 3 years • Work alongside the Manufacturing Forum, Digital • Increase promotion of Leeds’ key selling points to Board, Leeds Legal Network, and the developing London-based businesses and potential returners Financial & Professional Service Network and (e.g. high quality of life and low cost of living). Use Infrastructure Group, to develop platforms from London-based publications (e.g. Evening Standard, which opportunities in London can be advertised, TimeOut, Balance Magazine) to publicise Leeds in and promotion can be done to attract businesses to a positive manner. Leeds • Networking groups active in both cities like Young • With the increasing recognition of the regions, Entrepreneurs in Property and Tech London Leeds must needs to ensure enough commercial Advocates should be encouraged to promote the space is supplied to meet growing demand. synergies between the cities. • Work alongside Leeds universities to promote • Identify and engage Leeds alumni based in London collaboration opportunities between the two cities. who are in key advisory roles. Linkedin lists more Use the combined strength of the White Rose than 260,000 alumni from University of Leeds and University Consortium, to help promote the Leeds Beckett University, of which some 35,527 are research strengths of the three universities (Leeds, currently based in London. Sheffield & York) to London. • Work alongside current train operators to ensure • Understand how existing links between the two continued capacity to support future growth in cities can be taken advantage of (e.g. the President business & leisure travel. and Provost of UCL, Professor Michael Arthur, was • Look to attract other airlines which may be able to the Vice-Chancellor of the University of Leeds offer routes between the two cities (using other (2004-13)). London airports, e.g. Flybe from Manchester to • Work with Leeds-based employers to advertise key London Southend). opportunities/sectors to London graduates at open days, promoting the quality of life and cost of living in Leeds. Opportunity Mapping 72 Opportunities for Leeds
Long-term opportunities – 4+ years • Consider establishing a formal ‘Leeds in London’ programme which would provide a serviced-office type arrangement for Leeds firms visiting the capital and could be used to host inward investment meetings and events in a Leeds-branded environment. Similar models have been created by Liverpool, Derby and Nottingham with a fair degree of success. This might also include a university presence to provide a base for academics and students in London. • Better understand how improved connections between the two cities (through HS2) will impact on economic connections. Examine how this opportunity can best be exploited, and how it will impact on labour market and business connections (with journey times to London reduced by nearly an hour) London Manchester
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