Wednesday 19 May 2021

A new report released today outlines a six-point plan to tackle London’s unemployment and skills challenges.

With COVID-19 impact leaving the capital suffering from the highest unemployment rate in the country, London Chamber of Commerce and Industry’s ‘Recovering employment and skills in London’ report assesses measures that can be taken to upskill, retrain and support people back into work – fuelling the economy of both the capital and country.

Facing forecast unemployment of 9.4% by December 2021, 464,000 Londoners could be unemployed. Worst-case scenario projections indicate unemployment could even rise to 11.8% in February 2022, leaving 580,000 Londoners out of work*.

LCCI’s six-point plan considers how to address this challenge, including increased focus on support needed for mature workers, as the debate on reskilling and upskilling throughout the pandemic has often rightly focused on young people, but also needs to extend to older workers - particularly as those aged 50-65 are expected to see the highest relative increases in unemployment in London. LCCI propose a dedicated scheme for adults is launched in London, similar to traineeships, to ensure mature workers are not left behind. The scheme would also support lifelong learning beyond the pandemic.

To recover employment and skills in London, LCCI propose:

- Gaps in data are addressed.

A systematic approach to gathering robust data on current skills gaps in London, as well as projections anticipating future changes, would better equip education and training to respond to the scale and speed of changes occurring.

- SMEs are supported with identifying suitable solutions.

A centralised, collaborative advice hub should be developed to support smaller businesses in London with understanding available training options and what they entail, as well as identifying which best address their skills needs.

- Ensuring the Apprenticeships Levy and scheme better serve employers and the workforce.

The Government should look at widening the Apprenticeship Levy into a Skills Development Levy. This would give employers the flexibility to invest in the right opportunities for their employees while ensuring funding is targeted at supporting reskilling and retraining where is it most needed.

- Mature workers are supported.

A dedicated scheme for adults, similar to traineeships, should be developed to ensure mature workers are not left behind, and to support them with transferring valuable skills to fill existing and emerging gaps. This scheme should support lifelong learning beyond the pandemic.

- Further financial support is made available for adapting and transferring skills.

While broadening the Apprenticeship Levy into a Skills Development Levy would go some way to addressing challenges, further financial support should be explored by the Government for supporting more people to adapt or transfer their skills in the meantime. This could include interest-free loans or grants, or a scheme similar to the super-deduction announced in the 2021 Budget to incentivise and support companies’ investment in skills development.

- Fostering career planning skills.

To support people in this uncertain climate, employers, training providers and educators should look to build career planning skills into training and development, empowering people with the tools and techniques to take ownership of their careers.

The report also tells that the ability of those who have been out of work for a sustained period to adapt to the scale of ways of working changes brought about during the pandemic, such as remote working, presents challenge - whilst the pressing need to progress towards net-zero and the acceleration of technological innovation mean further developments to skills needs are underway – and will continue to drive further change. The increased emergence of ‘offshoring’ is also highlighted.

Richard Burge, Chief Executive of London Chamber of Commerce and Industry, said: “Throughout the pandemic, London has suffered some of the highest unemployment and furlough levels in the country. As lockdown eases and with a scaling down of furlough, we hope, of course, for safe economic recovery, job retention and creation. But it’s clear that in the short-term a significant number of people will be without work, and London starts the road to recovery with the highest unemployment rates in the country.

“Digital skills are essential in a hybrid economy. We have the prospect of a recovery focussed on the opportunities presented by carbon reduction, and a continuation of automation and other technological advancements that have already been shaping the skills needs of businesses pre-pandemic. It is vital that all those people who are out of work are properly supported in developing the skills that they need in order to access these new types of job.

“That is why London Chamber of Commerce and Industry has worked with its membership to produce this six-point plan about tackling the capital’s employment and skills challenge, focussing on key issues that need addressing, right across the age ranges.”

Carole Cook, Director of Training and Recruitment Partnership Ltd, said: “The next year will present a lot of challenges for London in terms of employment and skills, but there are also many opportunities to adapt and change the existing systems to meet them. The current Levy system would benefit from being simplified and being made more accessible for employers and prospective apprentices of all ages. The lack of flexibility around some of the other funding that supports skills can sometimes put barriers in the way of collaboration and partnership working, even when there are clear and identified training and support needs that partners have the capacity and experience to address.

“Londoners are going to need innovative and responsive support as we move forward, including a cohesive approach to careers advice, regardless of someone’s age and previous experience. If we are to embrace the opportunities in new and growing areas such as Green skills and the more traditional areas such as construction, we will need the capacity to guide and inform people who have been in a different role for many years, as well as those just entering the job market. Entry level, level 2 and higher level qualifications will all prove invaluable in rethinking and reimagining opportunities to fit new and emerging job roles.”

Natalie Chapman, Head of Policy – South at Logistics UK, comments: “The logistics industry is playing a vital role in supporting London’s businesses and residents through the pandemic, and now, as the nation emerges from lockdown, it will be integral to the capital’s economic and societal recovery. However, the industry is in desperate need of workers to fill a variety of operational roles, especially HGV drivers.

“We echo the recommendations of the LCCI’s skills report, with London facing high unemployment, the government should take steps to make logistics a more accessible career option. Logistics UK is calling for the government to provide interest free loans or grants to train potential employees so they can enter the industry. The business group is also urging the Driver and Vehicle Standards Agency (DVSA) to put in place a programme to catch-up on the tens of thousands of lost driving tests during lockdown. Those seeking work should not be prevented from taking advantage of the opportunities available in logistics.”

The ‘Recovering employment and skills in London’ report is available to read here.

*data from London Councils, A detailed study of unemployment in London, 2021.

ENDS