Like the rest of the UK, London’s economy has taken a body blow from Covid-19, with unemployment rising steeply and a widespread take up of the Job Retention Scheme (“furlough”).
Some London industries have managed to stay active and engaged during lockdown, such as finance and business services, but a vast range — from accommodation and tourism to food and retail — are in suspended animation, and likely to sustain significant long-term damage.
These industries have some of London’s youngest, lowest qualified, and most precariously employed workers.
As the government plans its way out of the furlough scheme, avoiding a return to long-term unemployment and all the social issues that come with it will be top of the list. This is particularly important for those young people entering the labour market for the first time, who will feel the impact on future earnings the most.
Fortunately, there will be new opportunities in areas that are continuing to grow in spite of the challenges, from construction to digital transformation. But we know from experience that those who lost jobs in one sector aren’t automatically able to find new ones in another.
Training programmes will be essential to accessing jobs in these skilled sectors: something further education providers should be able to offer to Londoners of all ages.
But further education has long been known as the “Cinderella sector”, compared to the more glamourous higher education. This is particularly true in London, which has more learners and apprentices in further education than university students, yet where there has been comparatively little attention and investment devoted to education outside of a university setting.
As our new report shows, London is entering a deep recession with a high risk of unemployment. Further education should be core to any economic response — and that means addressing three longstanding challenges.
First, we must increase participation in further education by increasing funding. It is no mystery why participation in further education in London is down 40 per cent since 2014/15, given that funding has been slashed by 37 per cent for adult skills and 22 per cent for 16–18 year olds over the last decade.
If we want to give those left unemployed by Covid-19 a shot at finding new jobs, we need to make sure they have access to training.
Second, further education should offer opportunities to progress into mid and high level skills — which are rewarded by better pay. Currently, there’s an unofficial ceiling to the qualifications offered in further education — 99 per cent of funded FE learners are studying qualifications at level 3 or below (equivalent to A-Level), and three quarters at level 2 (equivalent to GCSE) or below.
Apprenticeships do offer training at all levels, but London is a cold spot for these, with only half as many apprenticeship starts per 1,000 jobs as in the rest of the UK. Changing that is vital.
Finally, further education must be able to respond effectively to changing employer demand for skills.
Key fields that suffer persistent skills shortage — such as science, manufacturing technologies, engineering, social care and hospitality — have not seen an increase in learner numbers in corresponding further education subjects. Yet responding to these needs has been made more difficult for providers, as funding rules for new courses force colleges to be risk-averse.
London has grown its offer of digital and construction training, but this has taken sustained industry and government investment — and even in these subjects, increases in learner numbers have been modest compared to the number of jobs created. This is a missed opportunity — businesses know which skills they need, so further education colleges should be able to offer them.
Failing to strengthen London’s vocational and adult learning provision will be a drag on economic recovery and a disaster for the capital’s workers. A new deal for further education that supports colleges and employers alike to develop agile and targeted training programmes is an imperative — for the capital, and for the UK as a whole. It will help Londoners ride not only this imminent wave of job disruption, but also those on the horizon — Brexit, decarbonisation and automation.
The government has previously made pledges to invest in training. Little progress has been made. The threat of mass unemployment should kickstart that investment.
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