A new report has revealed that KC generated £150 million for the Hull and East Yorkshire economy in 2010. The figure is three times greater than previous estimates for KC’s contribution, and underlines the hugely beneficial financial impact large firms can have on regional economies if specific supply chain and governance policies are introduced.

The report, by DTZ Consulting, found that KC spent more than two-thirds (68%) of its total spend with local suppliers in 2010 – double the industry average, demonstrating that KC is more strongly integrated into the local community than many firms across the UK.  In addition, 94% of the people it employs in Hull are local residents.

Sean Royce, KC’s Commercial and Finance Director, explained: “As the main telecoms provider in the region, our infrastructure and services have long provided the arteries for local businesses. What this report confirms is that our community-centric approach means we are playing a key role in the region’s prosperity and that we’re making a major contribution to Hull and East Yorkshire’s bottom line.”

The report highlighted that the activities of KC and its parent company the KCOM Group PLC underpin more than 1,400 full-time jobs in Hull and East Yorkshire through direct employment, purchasing from locally based suppliers and employee spending.

KC’s overall economic impact totalled £150 million – a significant 3 per cent of Hull’s total economy and significantly higher than KC’s employment share. This is 300 times greater than the average “Gross Value Added” (GVA)* contribution of Hull-based businesses, a contrast which highlights both the quality of the jobs KC and KCOM Group provides and its ‘buy local’ approach.

“We’re very proud of our origins in the region and our ethos of supporting local businesses. This comes from a passionate belief that major firms have a responsibility to the areas they operate in. In everything we do, from investing in our network through to the way we manage our supply chain, our ambition is to be a significant driving force for regeneration in Hull and East Yorkshire. The findings from this report suggest we are on track for achieving this,” added Royce.

The ‘Economic Impact of KC in Hull’ report analyses the extent of the financial contribution that the direct and indirect activity of KC and the KCOM Group has made to the local economy through procurement and employee salaries.

Russell Whyte, Associate Director with DTZ Consulting, said: “KC looks to be very closely integrated with the local supply chain, spending twice as much with local businesses as we would have expected from a company of that size.  They have very low reliance on imports from outside Hull.”

Further findings from the report were:

• The total impact of KC and the KCOM Group in the region is comparable in scale to that of Hull’s pharmaceuticals sector
• The total impact is equivalent to half that of the local food manufacturing industry, and approximately 40% of the food and beverage service sector
• KC and parent company the KCOM Group are responsible for the full-time employment more than 1,400 people locally. It employs around 1,000 people directly, with the additional jobs supported through the local supply chain, businesses and shops
• The skilled nature of many of the jobs KC provides – many of its employees are knowledge workers – mean that the average earnings of KC employees are significantly higher than the average for full time workers in the Hull City Council area
• KC committed more than £500,000 to community initiatives in Hull and East Yorkshire in 2010 

 

*Gross Value Added (GVA) measures the value of all goods and services produced in an economy. GVA combines wages and operating profits from companies and other organisations.