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North versus south: Where's best to be a contractor?

Paystream News

Kerry Hull

Friday 28th Aug, 2015

There has been competition between the northern and southern regions of the UK for centuries, with northerners often left frustrated that London gets all the media and government attention, as well as being the centre for most of the nation's wealth.

Yet in recent months, particularly since the announcement of May's general election result, there has been much talk of the creation of a so-called Northern Powerhouse and the devolution of powers to Manchester, Leeds, Liverpool and Sheffield.

Earlier this year, chancellor of the exchequer George Osborne stated: "Rebalancing our national economy, ensuring that the economic future of the north is as bright, if not brighter, than other parts of the UK, is the ambition we should set ourselves.

"We achieve that not by pulling down our capital city, or diminishing its success. Having one of the greatest global cities on earth, located 200 miles to our south, should be an asset, not a weakness."

So what exactly will the creation of a Northern Powerhouse mean for limited company contractors in the UK? And where is it better to be a contractor in general these days?

North versus south

Research carried out by Adzuna found that the average pay rate growth of workers in the north was triple that in the south during July 2015, with an annual increase of 7.1 per cent recorded for contractors in Yorkshire and the Humber.

Throughout the north-east, pay rates grew by 5.7 per cent over the course of the year, while north-west workers saw their pay rates rise by an average of five per cent during the 12-month period.

In contrast, pay rates in the south-east grew by just 1.9 per cent during the same timeframe, with London-based contractors typically seeing their pay increase by only 0.9 per cent.

However, new figures from the Department for Work and Pensions show that the country's average pay rate growth over the past 12 months came in at 2.8 per cent, indicating a strong economic climate for workers at present, regardless of where they are based.

On a different note, January 2015's Centre for Cities report led to the discovery that for every 12 job vacancies created in the south of England over the past decade, one job has disappeared from the north, raising concerns about the number of opportunities available for contractors up north.

So what else is different between the north and the south for contractors?

London, and its many opportunities

The July 2015 London Recruitment Index from the Venn Group found that investment in the capital is continuing to lead to a boost in opportunities for skilled limited company contractors, with a ten per cent increase in temporary vacancies recorded in comparison to the previous month.

In particular, construction and legal contractors have been in high demand, as the city is currently undergoing something of a housebuilding boom. And with economic confidence improving all the time, this trend looks set to continue for the foreseeable future.

The Venn Group's jobs market analysis also led to the discovery that businesses are increasingly requiring access to the expertise of financial contractors for short-term periods, as the government introduces new compliance legislation.

What's more, London is home to the UK's Tech City, meaning skilled IT contractors are usually in high demand in the capital to keep up with the demands of ever-changing technologies.

The Northern Powerhouse

If the proposed Northern Powerhouse does indeed become a reality in the near future, increased investment in the construction of new homes and business development is sure to lead to a boost in contractor opportunities in just about every sector to help get projects off the ground.

As these developments get up and running, even more jobs will be created, meaning it is essential that limited company contractors are taking action to nurture and develop their skills now to make sure they are in the best possible position to compete for contracts when the time arises.

So, where is best to be a contractor?

There's no doubt that there are an increasing number of opportunities for contractors in both the north and the south as the UK continues to get back on its feet following the recession of the late-2000s.

All signs may be pointing towards the north at the moment with Mr Osborne's powerhouse set to come to fruition over the coming years, but London is unlikely to cease to be the bustling hub of business activity it has been for many years, so we'll leave the age-old north versus south debate to continue...


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