Deal or no deal, professionally speaking?
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The words ‘National Sector Deal’ might not mean very much to most of us working within professional services in the West Midlands, but BPS Birmingham understands that the draft structure of a deal for our sector is close to being agreed and there are a number of reasons as to why this both matters and why we should care.
When the Government published its Industrial Strategy White Paper late last year, it outlined many themes and challenges that would be backed with resources in order to increase U.K. productivity – and by extension – quality of life. Sector deals are one of the ways in which these resources can flow providing a case can be made that directly links the asks to clear productivity improvements. In their own words, sector deals are “partnerships between Government and industry on sector-specific issues and create significant opportunities to boost productivity, employment, innovation and skills”.  Services are increasingly recognised as being a very significant part of the UK economy and whilst not specifically referred to in the White Paper, the door was officially opened for a professional services sector deal.
In fact reference is made to the longstanding collaborative partnership with professional and business services (rather unhelpfully called the PBS sector for West Midlanders that tend to use BPS/BPFS acronyms). This probably refers to the PBSC, which is the Professional and Business Services Council; a group of business leaders representing professional services interests in direct communication with government, with BEIS as the lead department and one of its ministers as one of the Council’s co-chairs.
At a Managing Partners Forum meeting in London earlier this week, we learnt more of the priorities of the PBSC, but more significantly the thinking underpinning a draft PBS sector deal. For Greater Birmingham and the wider West Midlands region, where the BPFS/ PBS sector (depending on who’s talking!) is the largest contributor to the regional economy with fastest anticipated growth over the next decade, the contents of such a deal should hold great interest.
The first thing to understand is that whilst it sounds like a unified group of like-minded souls, the PBS sector and therefore the council membership is a “broad church” to quote one of the co-chairs. As BPS Birmingham is all too aware from its recent research with City-REDI for the WMCA Productivity & Skills Commission, the sub-sectors that group together under this heading include everything you might expect such as financial services, accountancy and law to the perhaps less immediately obvious real estate sub-sectors and associated construction consultancies to advertising (that you might more intuitively link to the creative industries) and support services (call centres, out-sourced back office functions and the like). Whether right or wrong, this is the grouping that arises from standard industry classifications and the challenge facing a group like the PBSC is to negotiate a deal with government that can provide support across all businesses that fall within the PBS sector given this definition. Where we understand them to have arrived is a draft deal that focuses on “talent” as the common, cross-cutting theme that poses consistent barriers to productivity. Within this, we further understand that there are four areas/ sub-themes and ensuing areas of asks, which are broadly summarised as:
- Getting talent into the UK to be able to work within the sector.
- Being able to ‘export’ talent (for want of a better phrase). This is about ensuring a mobility of output and services around the globe through movement of staff.
- Social inclusion and access to the professions as a means of increasing the talent pool from which employees of the future come, increasing resilience of businesses etc.
- Skills for a 100 year life i.e. recognising that life expectancy is growing and life-long learning is fundamental to meeting future skills needs taking a longer term view than simply the point at which people enter the firms.
With regards to 1), we understand that this builds off the substantial piece of work by our good friends at The City UK, in partnership with EY, in relation to a more fit for purpose immigration system for financial and associated professional services.
Most of the discussion though centred on the understanding and importance of a mutual access in the post-referendum Brexit negotiations. Critically the point was made about recognition of the regulators of UK based services in Europe and further afield that enable the export of services currently enjoyed and on which this sector’s businesses rely. Be it The Law Society, ACCA, ICAEW, RIBA, RICS, to name only a handful of the professional bodies, the importance of the portability that their acceptance abroad provides cannot be underestimated. Nor can it be taken for granted or assumed to be in place the ‘other side’ of the negotiating period. If there was one call to action at the meeting, business representation on this point was it.
To put into context, the economists talk in terms of services now making up approximately 80% of the economy. This isn’t just professional services, but the significant point is that the focus of negotiations to date with the EU is almost-if not entirely- focussed on goods and customs union in terms of physical borders. People more informed than me point out that this is likely to be due to the balance of trade and that the EU stands to lose more from not resolving the movement of goods, whereas services are more in our economic interests. No doubt there is more to it than this simplistic narrative, but either way the stark reality is that negotiations are dragging out such that the needs of service industries are not yet on the agenda. There is clear and genuine concern that the window of opportunity for these discussions is rapidly disappearing and/ or that much may have been given away already weakening the negotiating position when the time comes. In this scenario, services businesses and the skilled people within them can leave relatively readily and not necessarily for commonly cited European competitors such as Frankfurt or Hamburg, but also New York, Singapore and further East. The message seems to be one of understanding and ”we’re trying”, but that services businesses need to be considering other ways of working should the current freedoms not exist in future.
Potentially depressing stuff, but it does further emphasise the need to be able to ‘grow our own’ talent and that if anyone can respond to this challenge, the West Midlands has many of the raw ingredients required to do so with its super-diverse and youthful population. More will come out about this and the need for good growth as the output of the deep-dive for the BPS sector from WMCA is published (anticipated early July around the timing of anticipated regional skills deals announcements).
Back to the National sector deal, hopefully we will soon learn whether the broad structure of the draft has been accepted. Assuming yes, it will still take circa 18 months before there are any concrete announcements regarding content. Other departments need to get on board in order to be able to deliver some of the asks e. g. the Home Office in respect of immigration matters. BEIS has made some noises about sector deal pilots that bring in place-based economies so that this isn’t an entirely London driven agenda. But the details are still work in progress and there is a small research tender out that closes this week that will feed an evidence base linked to this work-stream.
As you finish reading, if the urge comes feel free to write a letter to Greg Clark, the Business Secretary, his ministers and to your local MP about the importance of professional industry regulators. It could be a very valuable hour well spent. 
– Hilary Smyth-Allen, Executive Director, BPS Birmingham Ltd.
 “Industrial Strategy: Building a Britain fit for the future” HM Government, 27th November 2017. Accessible online at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/664563/industrial-strategy-white-paper-web-ready-version.pdf [Last accessed 4th June 2018]
 As per footnote 1.
 More about the BEIS Professional & Business Services Council can be found here: https://www.gov.uk/government/groups/bis-professional-and-business-services-sector-team [Last accessed 4th June 2018]
 More about The City UK and their work on immigration system to support Financial and associated services can be found here: https://www.thecityuk.com/research/the-uks-future-immigration-system-and-access-to-talent/
 Details on relevant Ministers/ Parliamentary Undersecretaries at BEIS include: Richard Harrington MP (https://www.gov.uk/government/people/richard-harrington) and Rt Hon Lord Henley (https://www.gov.uk/government/people/lord-henley)