Gardiner highlights scale-up help
PwC ‘responding to changing Scottish market’
Lindsay Gardiner: challenging year
PwC, the professional services firm, is changing in response to the changing Scottish market as it reported a 6% rise in Scottish revenue.
It was the fourth consecutive year in which income has outpaced the UK overall figure which this year came in at £3.6 billion, up 5%.
Lindsay Gardiner, the firm’s Scotland chairman, said the company had made particular progress in analysis of cyber security and had invested in helping small software firms alongside the Codebase incubator.
“As across the UK, this has been a challenging year, but I’m delighted that we have managed to not only keep operating to our high standards but also grow the business,” said Mr Gardiner.
“This is across a number of lines of service, ranging from core services, like audit, tax and deals, to more modern challenges of technology, digital and security.
“Our Scottish cyber security operation is one of the largest in the country and was involved in delivering analysis alongside the National Cyber Security Centre and BAE Systems after uncovering and disrupting the major global cyber espionage campaign known as Operation Cloudhopper.
“Add in to this our significant investment in CodeBase and our creation of SCALE, one of Scotland’s first long-term initiatives to help scale-up firms in Scotland, we are showing we are changing in response to the changing nature of the Scottish market and Scottish businesses.
“Our investment hasn’t purely been external though. Our Aberdeen operation moved to the city centre to take up residence in The Capitol building and we have invested in the latest cloud-based working methods internally, giving staff a lot more flexibility and collaborative agility.
“Oil and gas activity for the Scottish offices picking up by 4% also seems to confirm what we said in our last Sea Change report – that with the right advice and the industry coming together, there is life in the North Sea yet.”
Regarding the year ahead, Mr Gardiner said: “The coming year will see businesses looking for help on a broad range of issues, such as GDPR and the new Criminal Finance Act, as well as their traditional needs.
“Of course, on top of all of that, individuals and organisations are starting to focus on the implications Brexit negotiations, both within the UK and abroad, so we expect to see a lot more activity around this.
“It may even be a period of relative stability compared to the last few years – there are no UK or Scottish elections or referenda planned and we don’t leave the EU until 2019.
“Businesses know what the stakes are, they are focused on what the next few years may bring and are looking for advice to help them through what could be a challenging few years.”
More than 100 graduates and school leavers joined PwC or undertook paid work experience and internship opportunities.
Social mobility data showed 39% of the latest graduate intake were first generation graduates, 74% attended state school, 14% came from homes eligible for income support and 10% were eligible for free school meals.
However, the firm also admitted that it paid minority-ethnic staff almost 13% less than other employees. It said this was because more of them worked in administrative and junior roles, rather than senior ones.
PwC said it had published the data to help it speed up progress on the issue. Currently reporting on BAME pay isn’t required under government regulations.
The firm said it hoped that publishing the data would help it to tackle “ethnicity challenges”.
Its gender pay gap for 2017 was 13.7%, down from 15.2% in 2016.
Mr Gardiner said: “Encouraging social mobility and promoting diversity are vital for the future success of the firm. Our Scottish senior leadership team, has a 50/50 gender split and our largest business lines – assurance and tax – are led by women.”
UK figures show the assurance, consulting and tax business divisions grew by 4%, 7%, and 7% respectively, with the deals practice down slightly (-1%) as strong transaction services based growth was offset by the winding down of some long-term insolvency and forensic assignments. In Scotland, the figures closely mapped the UK details.
Kevin Ellis, PwC chairman and senior partner, said: “We’re transforming our business to ensure we have the right skills and technologies to assist with the challenges facing our clients as a result of the 4th industrial revolution.
“Building a vibrant and sustainable economy right across the UK is essential for the UK to prosper post-Brexit, and we need to play our part.”
Profits for 2017 were £822m, down 1% on 2016, as the firm continued to invest heavily in people, technology and growth areas.
The average distributable profit per partner before tax was £652,000, down 8% from £706,000 last year, as the overall number of equity partners increased to 953, from 926 last year.
A number of historical regulatory matters were concluded and improvements made to processes and procedures.