Investment sparks venture capital boom in north-east

Northern England has not traditionally been a hive of activity as far as the
accounting profession is concerned.

Talented individuals in the area have traditionally moved southwards to
further their careers.

Even Liverpool, the European City of Culture for 2008, hit the headlines last
month when the Public and Commercial Services Union claimed the Home Office had
moved its financial accounting function back to London as it could not find
appropriate staff to fill the roles. But for the north-east, in particular, it
could all be set to change.

An influx of investment and business focus has attracted some of the UK’s
brightest IT professionals to grow what has become known as the ‘north-east
digital boom’.

Co-ordinated by corporate finance and marketing business Codeworks, more than
200 companies have linked into its trade lobby group, a move that helped to
facilitate a £50m growth in the local economy since January 2004.

But this rapid and large expansion has caught the area’s professional
services infrastructure on the hop.

Malcolm Holloway, managing director of Newcastle-based accounting firm
e-Financial Management, said the firm set up as a spin-off from its Luton office
to handle the accounting requirements of the growing number of digital
businesses in the north-east. ‘There are opportunities here that weren’t around
a number of years ago.

‘There’s plenty of venture capital around and businesses require this type of
professional service and more traditional internal accounting work,’ said
Holloway.

He added that the lifestyle benefits of living in the north of England, a
shrinking salary gap and the increased availability of work had made the area
more enticing.

Codeworks’ head of commercial development, Dave Stevens, is looking to use
his corporate finance and accounting experience at Peat Marwick Mitchell (now
part of KPMG) and 3i to drive venture capital funding for the north-east’s IT
industry.

‘After the dotcom crash things went pretty quiet around here,’ he said.
‘We’re trying to turn that around and build up a support network for these
businesses.

‘But it has been incredibly difficult to recruit, to get people from the
south-east on board, because of their preconceptions.’