London boroughs are calling for stronger local powers to address long-term unemployment and in-work poverty – including through placing jobcentre support alongside council services.
Analysis in a new report – Better Ways to Work: Tackling labour market disadvantage in London, published today by the umbrella group London Councils – suggests high employment rates disguise substantial weaknesses in the capital’s labour market.
More than half a million Londoners want to work but are not currently in employment. In total there are 1.3 million working-age Londoners who are economically inactive – a figure larger than the population of Birmingham.
London’s youth unemployment remains stubbornly high at 15.5 per cent – the highest in the country – and Londoners with disabilities are far more likely to be unemployed than those without.
In-work poverty is also a growing concern. The most recent data (from 2016-17) indicates that more than 200,000 London workers are being paid below the National Minimum Wage – but the growth of the informal ‘gig’ economy means the number could be even higher. Over 20 per cent of people in low-paid work in London are believed to be underpaid.
Cllr Georgia Gould, London Councils’ Executive member for skills & employment, said:
“While London appears an immensely wealthy city with a strong economy, scratch beneath the surface and it becomes clear the capital faces serious challenges of unemployment, poverty, and exploitation.
“London boroughs need to be properly empowered to help ensure no Londoner is left behind. Failing to make the most of Londoners’ potential is a waste of economic potential, as well as a social injustice.
“With the right tools, boroughs would develop better ways to support the long-term unemployed into work or to lead clampdowns on local employers who fail to pay the minimum wage. We could reshape London’s labour market so that it works for everyone.”
London Councils wants the government to take a ‘local first’ approach when developing new employment support services and funding streams. Efforts should be refocused on those considered hardest to help, such as those who have been out of work for many years or who have a disability.
The jobcentre network is currently overseen by the Department for Work and Pensions. London Councils argues that, because local authorities provide such a variety of key services supporting vulnerable people, jobcentres should be located alongside borough services to improve coordination of support.
London Councils is also seeking devolution of the full suite of powers for enforcing the national minimum and living wages. While HMRC should continue its programme of targeted enforcement and provision of a national helpline, empowering boroughs would be a major boost to local enforcement efforts.
Notes to editors:
Better Ways to Work: Tackling labour market disadvantage in London sets out the following recommendations that could be rolled out across England and Wales:
- Introduce devolved decision making over new and innovative funding streams:
- take a ‘local first’ approach to all new employment support programmes
- develop a new Healthy Working Innovation Fund and ‘what works’ centre
- preserve an employment focus in the UK Shared Prosperity Fund at a local level and retain and expand local controls over priorities and spending.
- Re-focus employment support on the hardest to help and bring services together through co-location.
- Align Jobcentre delivery areas with London sub-regional geographies, underpinned by joint governance.
- Create a shared data infrastructure to underpin coordinated service provision.
- Support in-work progression through an enhanced skills support offer
- Local enforcement of the national minimum and living wages.