Warning as covid home-working sparks 'brain drain' fears for Sunderland

That was the warning from senior managers with two of the region’s leading businesses at a round table with Shadow Business Secretary Jonathan Reynolds.

The Stalybridge and Hyde MP and lifelong Sunderland AFC fan – who is originally from Houghton – took part in a meeting with North East business representatives at the Stadium of Light.

And the skills gap challenge facing local IT firms post-pandemic was one of the main topics for discussion.

Mike Stirrup, CEO of Durham-based Waterston’s, said the company had done ‘OK’ through lock-down but told the meeting the sharp rise in home-working had exposed the fact that people did not need to relocate in order to join firms in other parts of the country: “We are now facing real pressure on wages because of the pandemic,” he said.

Experienced staff were being poached by companies in London offering salaries of £50-£60,000 ‘and we cannot deal with that’.

"We are having to say goodbye to them because it is really hard to keep them and the pressure on us is that the skills shortage up here is really bad.

“Investment in skills is really key for us because there is such a skills shortage so we are having to soak up some of that wage pressure and that has a knock-on effect.

“We might have to out up our prices, which means our clients will invest less in innovative digital technology.”

His comments were echoed by James Beard, chief operating officer of Sunderland on-line bingo giant Tombola, who said the firm was facing similar challenges.

"I think there’s another couple of angles to this," he told the meeting.

"One is that I think for future generations of people with technical skills coming through, while the region can produce graduates and apprentices from the the universities, a really, really key part of someone’s development, especially in our sector, is to be working alongside people who are far more experienced and it is the really experienced people we are are losing from the region.

“It’s great we’ve got people in the North East who are earning fantastically high London salaries and living here and they contribute to the economy up here – but they are not contributing to the growth of the businesses up here.

“In the medium to long-term, that is going to start to become a problem.

“The reason we are seeing it is because of Covid and because everyone was forced to work from home and people have realised they can work from home.”

The rise in home-working would also have a knock-on effect on other parts of the economy, he warned: “The secondary element of that is that footfall in city centres is also going to be significantly impacted,” said Mr Beard.

"It’s great to see so many new offices but I drive round asking myself ‘Where are all the businesses that are going to be in these buildings, because the vast majority of people who would be in those buildings can now do their job from home?’.”

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