We need financial clout to make the Northern Powerhouse a reality, says Kevin O’Connor. Deputy Business Editor Greg Wright reports.
IF you want to gain an insight into the transformation of Leeds, you really ought to take a stroll down Whitehall Road.
Until recently, parts of the road were simply a windswept void. Head down there today, and you soon find yourself at the heart of commercial activity.
Nearby lies Wellington Place, which was certainly an appropriate setting for my meeting with RSM’s Kevin O’Connor. The scheme is at the centre of the city’s renaissance.
Mr O’Connor is a man in hurry, because he is preparing for one of the city’s biggest office moves of 2017. Next summer, RSM plans to move around 300 staff into the Central Square development in Leeds.
It will move staff to the fifth floor of the building on Wellington Street, from two offices it occupies in Whitehall Quay and Wellington Street.
Mr O’Connor, who heads RSM’s Leeds office, has seen plenty of changes in his 20-year career in Yorkshire’s financial services community.
He wants the city to capitalise on the large number of towering office schemes that have finally reached completion, after most building work was placed on hold during the global slump.
“We have got some great buildings here,’’ he said. “Let’s fill them. Let’s not just fill them with people moving around (in Leeds), let’s fill them with new business coming in to the city.”
The audit, tax and consulting firm, which was formerly known as Baker Tilly, adopted the RSM brand and trading name in October 2015.
Mr O’Connor believes the move to a new home will help to galvanise the RSM team. But he is keen to stress that RSM is not trying to take on the Big Four audit firms.
He said: “There is still very much a role for a global firm which is able to service the middle market. Our ideal client is a growing entrepreneurial business that probably has international dimensions.”
“The fact that Central Square is the best building in Leeds and, a lot of people, say, the best building outside London, is a real statement from the firm about where we are, and where we want to be.”
Earlier this year, RSM announced a six per cent increase in global fee income, moving the brand up one place to become the sixth largest global network of independent audit, tax and consulting firms. Revenues rose to $4.64bn in 2015.
Mr O’Connor indicated that RSM still has the potential to grow in Yorkshire.
“We’ve made some significant investment over the last couple of years, not only in terms of new partners but new staff. We’ve probably added another 50 to 60 to our people over the last couple of years.
“So we’ve created a lot of investment already, and we’re capable of doing much more business in Leeds, with those numbers of people. But we want to grow; we want to fill our office. Could we get to 350 people in a few years? Why not?”
In common with many large accountancy firms, RSM has invested heavily in trainees “because finding experienced people is difficult”.
Mr O’Connor said: “This is partly down to a general shortage. The fact that people cut back on trainees eight years ago (during the financial crash), means there’s less of a pool of qualified accountants around now, so we’re all investing at the bottom again.”
He’s been heartened by the glittering array of Leeds building projects that have made headlines over recent years, such as the recently opened Victoria Gate scheme, which has brought John Lewis to Leeds.
“However, there is still so much to do,’’ he said. “The transport infrastructure seriously needs addressing. Connectivity across the North is really important.”
He said the Leeds City Region Enterprise Partnership, the body which works with the private and public sectors to encourage economic growth, had done a good job with limited resources.
He added: “We need to get some cash transferred from the South to the North...Talk is one thing; but you do need some economic clout and financial clout in order for it to happen.
“Our frustration up here is that, while the Northern Powerhouse has been a great talking shop, we really need to see some financial muscle behind it, for it to work. I think there’s the will across the North for it to happen. Let’s give us the tools to do it.”
Mr O’Connor is a former chairman of Financial Leeds, the organisation that acted as a sounding board for the professional services community. He is worried that financial services firms in Yorkshire lack a collective voice. He also believes there’s a case for reviving Yorkshire Forward, the regional development agency that was scrapped by the coalition Government, He recalled: “I was involved in Financial Leeds for many years. While it was not a huge organisation, it did represent, very effectively, the views of the financial community in the city and promoted our capabilities and since... the crash and the demise of the RDAs (regional development agencies), I think we’ve lost that bit of voice.”
He said members of the Leeds financial community recognised the collective need to promote Leeds.
“Inward investment is good for the city,’’ he added. “Yorkshire Forward was not perfect by any stretch, but I think, overall, it did a good job. I think the RDAs in the North generally did a good job. I was disappointed when it was decided that they should go.”
And what would he like his legacy to be? “If you cast your mind back to the beginning of 2002, RSM’s turnover in Leeds was nil.
“When I started this job, we started up with nothing, and we’ve ended up employing 300 people in the city. That’s a good enough legacy.”
Kevin O’Connor is RSM’s regional managing partner for the Yorkshire and North East region.
He oversees a £35m business which covers Leeds, Hull and Newcastle.
He sits on the firm’s national management team and has particular expertise in advising on the tax aspects of corporate restructuring. He is a former chairman of Financial Leeds, the organisation that promoted the financial sector around Leeds.
He’s been a partner with the firm, which was formerly known as Baker Tilly, since 1999.
He became office managing partner of Baker Tilly’s Leeds operation in 2002.