Newcastle's Office and Business Services Sector

Coverage of the North East economy tends to focus on manufacturing, energy and the port. A substantial proportion of actual employment in Newcastle sits somewhere less photogenic: offices.

Financial services, software, public administration, professional services and contact centres together account for a large share of the city's jobs, spread between the city centre and business parks on its northern and eastern edges.

Here is how that sector is structured.

The business parks are substantial.

Cobalt Business Park in North Tyneside is among the largest office parks in the United Kingdom by floorspace, developed on former colliery land near Wallsend and Whitley Bay.

Quorum Business Park at Longbenton and Newcastle Great Park to the north-west provide further large-scale office accommodation, and Balliol and Benton complete a corridor of office employment along the northern edge of the conurbation.

Their appeal has been straightforward: large floorplates, parking, Metro access at several locations, and rents well below those in southern England.

That cost differential is the fundamental reason a great deal of this employment is in Newcastle at all.

Public administration is a major employer.

HMRC operates a substantial regional centre at Benton Park View in Longbenton, one of the largest public sector employment sites in the region and a fixture of the local economy for decades.

The Department for Work and Pensions and other government functions also employ significant numbers across Tyneside, and NHS bodies, the universities and the local authorities are all major employers in their own right.

Government policy on relocating civil service roles out of London has been a recurring theme across successive administrations, and the North East has been a beneficiary.

That concentration means changes in public spending and civil service estate strategy have direct and immediate local consequences.

Financial services have deep roots.

Newcastle and the surrounding area have a long history in banking, insurance and building societies, and that has left a substantial base of financial services employment.

Gosforth has been a centre of banking operations for decades, and the sector across the region includes retail banking operations, insurance, pensions administration and increasingly financial technology.

The region's fintech sector has grown from that base, supported by the availability of experienced operations staff and by university graduate supply.

Software is anchored by a major employer.

Sage, headquartered in Newcastle, is the region's most prominent technology company and one of relatively few FTSE-listed companies headquartered outside London and the South East.

Its presence has had effects beyond its own payroll, including in the supply of experienced software and product staff into the wider regional technology sector, several of whose founders previously worked there.

Alongside it sits a broad base of smaller software, digital and creative businesses, concentrated in the city centre, the Ouseburn and increasingly around Newcastle Helix.

Contact centres remain significant.

Contact centre and shared service operations have been a substantial source of employment across Tyneside and Wearside since the 1990s.

The sector has attracted criticism over pay, monitoring and job quality, and it is exposed to automation, offshoring and changes in customer service technology.

It has nonetheless provided large-scale accessible employment in areas with limited alternatives, and remains a major employer.

Automation and artificial intelligence are reshaping the work, with routine enquiry handling increasingly automated and remaining roles becoming more complex, which changes the skills required.

Professional services support everything else.

Newcastle has a substantial professional services sector: law firms, accountancy practices, surveyors, architects, recruitment, marketing and consultancy.

Several national and international firms maintain Newcastle offices, and a strong base of regional independent firms serves North East businesses.

That sector both serves the wider regional economy and is dependent on its health, since demand for corporate legal, accountancy and property advice follows business activity.

Hybrid working changed the market.

The shift to hybrid working since 2020 has had a marked effect on office demand, and Newcastle has followed the national pattern.

Occupiers have generally taken less space but of higher quality, favouring modern, energy-efficient buildings with good amenity over larger amounts of older accommodation.

That has increased pressure on secondary office stock, and conversion of obsolete offices to residential and other uses has become a live issue in Newcastle city centre as elsewhere.

The consequences reach the city centre economy, since fewer office workers present each day affects lunchtime trade, retail footfall and public transport patronage.

What it means for the region.

Office employment is less visible than a factory and generates fewer headlines, but it accounts for a great many jobs across a wide range of skill levels.

Its principal vulnerability is that a significant portion consists of functions that could, in principle, be located elsewhere, whether in another UK city, offshore or in software.

The counter-argument is the labour market: a large, experienced workforce with relatively low turnover and lower salary costs than the South East remains a genuine competitive advantage, and it is why these operations came here in the first place.

Share your thoughts.

Do you work in an office role that could be based anywhere, but happens to be in Newcastle?