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London needs a bespoke skills strategy

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In this age of evidence based policy making it never ceases to amaze me that, even when we put forward a compelling case backed by evidence, Whitehall often chooses to ignore us. 

A classic example right now is the pressing need for greater localisation and joining up of skills provision and employment support.

London Councils has recently published two reports Getting London Working and London’s Skills Challenge, both of which provide evidence that the current, Whitehall controlled, systems are not working as well as they should, and setting out proposals to deliver locally tailored solutions and results that are more effective.

We have published two separate reports not because we think our members don’t recognise that work and skills are intrinsically linked, but because responsibility is siloed into two different Whitehall departments.

Overall, London remains a buoyant contributor to the economy, and indeed the number of jobs in the capital has now exceeded five million for the first time. However, London’s employment rate continues to trail the UK average, as it has done for two decades, with lower skilled Londoners at a particular disadvantage.

There is significant national investment in employment support in London, something in the region of £78m every year, and a raft of programmes to deliver that support. One survey identified 19 different programmes operating in one borough alone. But, around £8 in every £10 goes on programmes that are designed nationally and lack sufficient local input to make them truly effective.

In skills it’s much the same; estimates suggest that close to £550m comes to London for adult skills provision.

Despite this, employers say that they attribute 24% of vacancies to skills shortages; clearly, the market-based model negotiated by the Skills Funding Agency is not fully matching up training with employers’ needs.

It seems obvious that London is too big and too complex for one-size-fits-all solutions to be effective. London’s population is greater than Switzerland’s, and its economic output is roughly equivalent to Sweden’s.

London is a vast and varied economic area, consisting of diverse functional economies. Significant variation in employment rates, businesses characteristics and skills needs, means a more tailored, responsive approach is required.

Locally tailored employment support is more effective. Evidence shows that boroughs, and groups of boroughs working together, have significantly outperformed the Work Programme, and they should be given more of the levers they need to go even further. Combining that with a role as strategic brokers in the skills system would enable councils to help employers meet their skills needs and start to address London’s systemic unemployment problem.

Hugh Grover, director of fair funding, performance and procurement, London Councils

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