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UK Annual Report 2021

Investing
in the future

The past 12 months have challenged our business like no other in living memory. From the depths of lockdown to our first steps into the hybrid working world, we chart the changes that have set PwC on course for a brighter future.
 
Find out more about:

A year of two halves

As we began the financial year, the entire business was dominated by our Covid response. The first three month lockdown was just easing but the debilitating effects of the pandemic had taken their toll.

A year on, we are seeing the benefits of a strategy built on our long term goals of supporting our clients, our people and our communities.

By putting our purpose - to build trust in society and solve important problems - at the core of our thinking we have been able to navigate our way through a situation unchartered in living memory.

The firm
I’m proud of how we’ve set the course for a positive year ahead
Kevin Ellis
Chairman and Senior Partner

We held our nerve

We didn’t furlough or cut jobs. Instead we relied on the flexibility and resilience of our people as they juggled competing responsibilities. And we collaborated with our clients to help them best deal with the issues they faced while we supported our communities with a clear focus on employment, social mobility, diversity and inclusion, and sustainability.

“We plan to invest £1.2bn over the next five years in a number of ambitious programmes to create jobs, increase skills and deliver wider benefits to the UK economy.”

Kevin Ellis, Chairman and Senior Partner

Explore our Key Performance Indicators
Revenue
£4,447m
£4,380m 2020
2%
Total tax contribution
£1,336m
£787m taxes collected
£549m taxes borne
£1,274m 2020
£798m taxes collected
£476m taxes borne
Client satisfaction scores
8.91/10
8.78/10 2020
1.5%
Employee engagement scores
78%*
83% 2020
2021 result was from full survey. 2020 figure was from a pulse survey.
Distributable profit per partner
£868,000
£685,000 2020
26.7%


In the second half of FY21 we began to see real change. While the pandemic was still with us, we settled into new routines to cope with its demands. Audit benefitted from our investment in quality, while the deals-led recovery has been felt strongly in our Transaction Services and Corporate Finance teams.

Demand for transformation advice, including finance transformation and digital and data strategies, were key drivers of second half growth, along with increased demand for other services such as decarbonisation plans and designing and delivering hybrid working strategies.

The firm’s 2% revenue growth reflects two underlying trends. There was growth in the second half of the year as client activity rebounded and with large numbers of our people working from home we saw revenue related to client engagement costs such as business travel expenses decline considerably.

Many see this recovery as a catalyst for profound change and we’re no exception. Our strategy is built on identifying and addressing the change that clients are demanding. In our view, this is around helping them build trust with their stakeholders and delivering sustained outcomes that make a difference.

 

Our performance
We were genuinely surprised at how strongly the market returned from January
Warwick Hunt
Managing Partner and Chief Operating Officer

Our revenues

Select the options below to explore the make-up of our revenues:

Total revenue £4,447m
Lines of service
Industry segments
Market segments
     
Audit
£1,069m
£1,003m 2020
Consulting
£996m
£1,057m 2020
Deals
£854m
£781m 2020
Risk
£458m
£468m 2020
Tax
£1,070m
£1,071m 2020

Financial services
£1,532m
£1,473m 2020
Government and health industries
£748m
£705m 2020
Industrial manufacturing and services
£708m
£726m 2020
Consumer markets
£610m
£624m 2020
TICE
£495m
£450m 2020
Energy, utilities and resources
£354m
£402m 2020

Inbound
£1,289m
£1,382m 2020
Private Business
£860m
£789m 2020
FTSE100
£578m
£510m 2020
Public Sector
£651m
£611m 2020
Private Equity
£588m
£565m 2020
Mid-cap
£481m
£523m 2020

Some key activities from FY21
Case study
Future of Government
Driving the debate on levelling up and the road to recovery
Case study
Cyber attack response
Helping SEUPB recover from a malicious cyber attack
Case study
Supporting the rollout
How we worked with NHS healthcare professionals in the Covid vaccine rollout
Clients
We’re helping our clients build trust and deliver sustained outcomes
Marco Amitrano
Head of Clients & Markets

Serving our clients

Above all else, the last year has been about investing in relationships.

Our clients are some of the most innovative and impactful private, public, and third sector organisations. We’re proud of the way that our people have consistently shown up for them with speed, imagination, and care.

In practice, this has meant staying connected with them to help identify and solve their most important problems. For some, that’s been about survival - conserving cash, accessing government support, or responding to fundamental industry change. For others, it’s been about bold moves into new markets, accelerating complex transformation, or building trust with a growing group of stakeholders.

Throughout the year, clients have called upon us to help reset their strategies, to lead transformation, and to help them run their operations in new and more efficient ways. We’ve supported the start of a deals-led recovery, helped our clients to rethink risk, and met client demand for specialist tax expertise. We’ve also continued to drive action and investment in high-quality audits.

We worked with the Government on its emergency response to Covid and its actions to enable economic repair, with support for the levelling up agenda being a strong feature of our work across all regions this year.

“We talk about three characteristics - speed, imagination, and care - to describe how our five lines of service deliver for clients of all shapes and sizes, across all industry sectors, market segments, and geographies.”

Marco Amitrano, Head of Clients & Markets

Traditional industry boundaries blurred more than ever in FY21, with business disruption, the need for collaboration, and the exciting possibilities offered by digitisation among the biggest drivers. Our unique view across industries positioned us well to share knowledge and solutions from one sector to another, from resolving supply chain challenges to shoring up cyber defences.

Drawing on the best of our human skills, technology assets, alliance partnerships, and PwC global network has allowed us to support organisations with an industry and regional reach that impacts the lives of millions across and beyond the UK.

We’ve stayed connected with our clients, helping them meet the challenges of the past year. Whether that’s been about survival, moves into new markets, accelerating transformation or responding to the levelling up agenda.

As clients shift their focus to the medium term, a common theme in our conversations is better aligning the business agenda with urgent social and environmental needs - whether that’s transitioning to net zero or strengthening the UK as a competitive, secure place to do business.

We’re excited about what our clients are saying they need from us in FY22 and beyond, which is to bring everything we offer together in new, creative ways. Our focus now is on growth through change and we’re committed to investing alongside our clients for mutual success.

How we helped our clients meet the challenges of the past year
Update
Our lines of service
Audit, Consulting, Deals, Risk and Tax
Update
Our regions
Our regional footprint is fundamental to our purpose
Update
Our industries
Industry and societal issues grew more connected over the past year
People
We've made an unprecedented investment in our people this year
Laura Hinton
Chief People Officer

Investing in our people

Our main priority throughout the pandemic has been our people - and in particular, their wellbeing and job security. During the worry and uncertainty, we’ve sought to provide reassurance, care and clarity, and our consistently high engagement scores over the last year reflect this.

As well as protecting jobs, we’ve been able to make an unprecedented investment in our people, while planning for a post-pandemic world, continuing recruitment activity and investing in the workforce of the future.

Alongside the annual reward round, we’ve given our people an extra day off and an extra week’s pay in recognition of their hard work amidst the challenges presented by Covid. We’ve continued to invest in mental and physical wellbeing support, including a year’s subscription to meditation and mindfulness app Headspace, and we’ve added a 24/7 virtual GP service as standard for all. We’ve been sure to have some fun along the way too - our virtual ‘Spring Fest’ featured some well-known celebrity guests and was designed to lift our people’s spirits towards the end of the lengthy winter lockdown.

Thousands of our people, their friends and families took part in Spring Fest. Over two months, we ran celebrity-led virtual events covering everything from astrophysics to salsa dancing.

Empowered flexibility - the future of work

We’ve also been looking ahead - planning for what post-pandemic life will mean for our people, clients and communities. While we had already moved towards a flexible approach to working pre-Covid, this year we’ve taken the opportunity to enhance this further through the launch of a new Deal for our people. It shines a spotlight on empowered flexibility - giving our people more control over where, when and how they work, as we all adapt to a new, blended way of working from home, client sites and our offices.

Workforce of the future

As a large employer, we recognise the important role we’ll play in the economic recovery, helping to close the UK’s skills gap and creating opportunities for the workforce of the future. So as well as running internal upskilling programmes, we’ve supported our communities through the provision of learning and employability resources and programmes.

Thanks to our investments in technology, we’ve been able to continue with our recruitment and onboarding activities throughout the pandemic. Our innovative new virtual reality platform, Virtual Park, has enabled us to engage with and hold large-scale events for students in a very different way, and we are continuing to broaden routes into our firm to attract the most talented people in the market from an increasingly diverse range of backgrounds.


Diversity and inclusion

Building a more diverse and inclusive workplace

This is our seventh year publishing our gender pay gap data and we are pleased to report that our key metrics, the median pay and bonus gaps, have all reduced further, continuing the downward trend. This reflects our commitment to taking action to ensure we deliver our gender targets. You can use the data explorer below to find out more about our progress against these targets and our Diversity Pay Report to find out more about our gender pay gap.

Headcount data is correct as of 1 July 2021, and takes into account promotions effective as of that date. Pay data excluding partners is a snapshot as at 5 April 2021 (following regulatory methodology) and data including partners is for the FY21 financial year.

We have made good progress this year in strengthening our pipeline of female talent, particularly at manager and senior manager level, and we’re delighted that women made up 41% of internal partner admissions this year. All of this means we are on track to achieve our gender targets across all grades by July 2025.

Our diversity data plays an important part in helping to shape the steps we’re taking in our five point action plan to build an even more diverse and inclusive culture within our firm where everyone feels they belong and valued for who they are.

In addition to this, we have been delivering a targeted racial equality action plan that we announced last year to help accelerate the pace of change in improving racial equality both within our firm and in wider society. Our ethnicity data includes our progress against our targets and our ethnicity pay gap, which we’re publishing voluntarily for the fifth year running. We’ve broken down our ethnicity pay data even further this year to include Chinese data in addition to the Black, Asian, and Mixed Ethnic Background data we shared last year.

And because we believe in the power of transparent data in driving real change, we are also voluntarily publishing our socio-economic background and disability pay and bonus gaps for the first time this year - you can find this on our diversity data page.

Data excluding partners is a snapshot as at 5 April 2021 (following regulatory methodology) and data including partners is for the FY21 financial year. Further information is provided in our Diversity Pay Report. You can also find out more about our broader approach to pay.

Our people stories from across the year
Case study
Spring Fest
How we re-energised our 22,000 people after a long lockdown
Case study
Virtual Park
PwC’s very own virtual reality recruitment environment
Case study
Consulting sponsorship
Supporting our people with access to equal opportunities by setting up sponsorship programmes
ESG - Living our purpose
Tackling climate change is core to our purpose as a firm
Emma Cox
Sustainability and Climate Change Leader, PwC UK

Living our purpose

Our ambition is to build trust in the climate transition and help accelerate the transformation the world needs.

Purpose sits at the heart of our strategy and integrating the fundamentals of ESG into our work is key to helping organisations improve their impact on the environment, and on society, to become more resilient, agile and sustainable. We’re launching an ESG platform and committing to upskill our people to build ESG into our client services, which is part of our global net zero commitment.

We’re also using our role as an employer to support a fair and just transition, for example we have been ranked as the top employer for social mobility in the Social Mobility Foundation’s Employer Index (2019 & 2020). Our work this year includes expanding our Flying Start Degree Programme, which allows people to earn while they learn, with Queen Mary University of London joining the programme.

We have kept the spotlight on tackling inequality through a number of our initiatives - our Future of Government programme looks at how government and business can work together to address inequality. And our Women in Work Index is our annual assessment of female economic empowerment across 33 OECD countries.

We have also driven significant progress on our environmental commitments, and achieved a platinum Ecovadis sustainability rating.

Our climate credentials
Our operations have been carbon neutral since 2007, and in that time we have significantly shrunk our total carbon footprint - with Covid-related travel restrictions this year helping to drive it to 96% below that baseline - while growing our revenue by 72%.
Volunteering hours
Total hours: 18% of our people volunteered a total of 29,989 hours (FY20: 47,286), 59% of which were skills based (FY20: 49%).
Total community contribution: £4.8m (FY20: £6.2m)

Climate risk and reporting

Action on ESG relies on trusted reporting, but historically this has been challenging because of the many standards that exist. In partnership with the World Economic Forum and the International Business Council, we’ve been playing a leading role in promoting global coordination on non-financial reporting for investors and other stakeholders through the Measuring Stakeholder Capitalism report.

Building on our membership of the Task Force on Climate-related Financial Disclosures (TCFD), we’ve been raising awareness and promoting best practice through our practical implementation guide on implementation of TCFD. And we’ve provided snapshot insights into climate change and ESG reporting through our annual review of practices in the FTSE 350. We’ve also used our annual Building Public Trust Awards to shine a light on the importance of open and robust non-financial reporting, with the introduction of a specific climate-change reporting award. We’ve been improving quality through our market leading assurance work and helping our clients assess the potential risks and opportunities from climate change and implement strategies to respond.

Our flexible approach to working hours gives our people greater opportunities for volunteering

Supporting climate action on the road to COP26

This year the international climate summit (COP26) will be hosted in Glasgow - the first time a United Nations Climate Change Conference has taken place on UK soil - and it’s an important milestone in our net zero journey.

We have colleagues currently seconded to the United Nations High Level Climate Champions Team to support on COP26 - Kiran Sura (Senior Manager, S&CC) and Bridget Jackson (Chief Sustainability Officer). Kiran is providing geo-political and strategic advice to inform country engagement, and Bridget is leading business engagement for the High Level Champions, driving momentum towards climate action amongst businesses via the Race to Zero and the Race to Resilience campaigns. This is a clear sign of our commitment to support the market transition to net zero, and a demonstration of our purpose in action.

And in the run up to COP26 we’re empowering our people to take positive action themselves through supporting and promoting the Count Us In programme. This is a global initiative which aims to inspire a billion people to significantly reduce their carbon footprint whilst challenging leaders to set and deliver bold climate commitments at COP26 and beyond.

Additionally, PwC is delivering two flagship climate programmes - the Climate Ambition Support Alliance (CASA) and Climate Finance Accelerator (CFA) - for UK Government to be profiled at COP26. You can read more about these programmes here.

Our ESG and purpose-led activities across the year
Case study
Modern slavery
We launched firmwide training to strengthen our approach to the issue of modern slavery
Case study
The Old Vic
How PwC helped the iconic The Old Vic theatre improve its accessibility
Case study
Flexible working
Our flexible approach gives our people greater opportunities for volunteering
Governance and Transparency
Transparency is paramount to the firm and our stakeholders

Integrity, objectivity and impartiality

Being able to demonstrate that we always act with integrity, objectivity and impartiality is fundamental to fulfilling our purpose.

Transparency is paramount to the firm and our stakeholders. That’s why we continue to share key information on important topics like how we engage with our stakeholders, how we’ve constructively contributed to policy debates, and how we set our tax strategy which underpins our purpose and influences the decisions we make.

As part of our commitment to transparency we also publish details of our executive pay. Partner remuneration is determined through a fair, robust and transparent income system aligned with the firm’s vision, culture and performance ambitions. Individual profit per partner depends on the overall profitability of the firm and is based on a number of factors including responsibility and performance across the firm’s strategic priorities. Remuneration for members of the Management Board is overseen by the Talent & Remuneration Committee and more information is available here.

For FY21 our distributable profit per partner includes a number of one-off non recurring items. For transparency, we have also disclosed our executive remuneration figures based on our underlying average distributable profit per partner (core profit).

Distributable profit per partner
£868,000
£818,000 core profit
Multiple of average employee pay and bonus to average partner profits
14.8
14.0 based on core profit
Chairman's distributable profit share
£4.4m
£4.1m based on core profit
Management Board distributable profit share
£26m
£25m based on core profit

We are a large partnership managed and governed by three main bodies each with a different role and responsibility: the Management Board, the Supervisory Board and the Public Interest Body. This year we also announced the establishment of our Audit Oversight Body as a further important step in strengthening the governance of our Audit practice.

More on our governance and oversight structures
Update
Management Board
Our executive body responsible for the policies, strategy, direction and management of the UK firm
Update
Supervisory Board
Our elected governance body with responsibility for the interests and wellbeing of the wider partnership and the UK firm
Update
Public Interest Body
Our majority independent governance body responsible for discharging PwC UK’s duties under the Audit Firm Governance Code

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