A NEW report produced by PwC and commissioned by business group London First has found that construction work in central London is delivering a £12m annual dividend and 280 jobs a year to the North-East.

London First asked PwC to analyse the direct and indirect impact of a sample of developments in central London that have been completed since 2008 or are expected to be completed by 2016. Nine of the city’s principal developers agreed to take part in this work and allow access to their confidential proprietary data so that a full understanding of their construction expenditure, supply chain impacts and even employee spending could be developed.

The aim was to assess the contribution of a small part of London’s construction activity to the UK economy.

Baroness Jo Valentine, chief executive of London First said: “The value of investment in London is huge in terms of generating jobs and economic benefits in London itself, but the knock-on contribution to regional economies is more impressive and shows the boost that London businesses provide to the rest of the UK."

Key findings of the report were: •    Central London office developments annually contribute £1.7bn of Gross Value Add (GVA, a measure of output like GDP) and 34,600 jobs to the UK economy.

•    More than half of this annual output is outside London – £1.1bn of GVA and 22,400 jobs per year.

•    Around 84% of direct expenditure on central London office development remains in the UK economy.

•    There is the potential for developments to generate further economic benefits for the UK, by increasing capability in goods and services that the UK currently lacks, such as cladding, lifts and machinery.

Marcus Robinson, partner at PwC Newcastle, said: “While it is no surprise that London benefits from office development, it is striking the further contribution to the regions is almost double with a significant part going to the North-East.

"The region must now capitalise on these opportunities arising from London to ensure the long-term impact is felt resulting in employment opportunities, job security and a highly skilled workforce.”