IT professionals in the north of England have seen their pay drop in the past year while their London counterparts have enjoyed an increase despite the credit crunch, according to a study by ReThink Recruitment using data from sector skills council e-skills UK.

Staff based in the north have had a salary reduction of 1.7 per cent to an annual average of £29,380, compared to a 1.2 per cent boost in the wages of London-based staff to an average of £45,240, according to the report.

IT staff in the north now earn just 65 per cent of London wages, compared to the 2007 figure of 67 per cent.

The study claims that the salary gap is due to a heavier concentration of lower-skilled jobs in the north than in London, such as data processing and IT support functions, and the likelihood of such roles being cut or outsourced to offshore IT centres to reduce costs.

"A lot of financial institutions, for example, have mortgage and credit card processing centres in the north of England. Banks also have back-office IT staff in northern cities that support trading functions in London. If business levels fall, these kinds of jobs can become vulnerable," said ReThink Recruitment director Michael Bennett.

"London IT staff tend to be concentrated in front- and middle-office roles, which are seen as value-creating by delivering productivity gains through more efficient systems. IT staff in financial services in London may be developing electronic trading systems, for example, which generate cost savings."

The business drive to invest in IT to generate efficiency gains during the downturn will translate into demand for specialist skills, according to Bennett.

"IT staff that are able to boost the bottom line tend to be more highly skilled and therefore less likely to be threatened by offshore competition," he said.