Business survey shows London still facing skills and labour shortages

Businesses in London continue to face serious skills and labour problems, while unemployment, particularly among young people, continues to rise, according to the latest London Business 1000 survey by the London Chamber of Commerce and Industry and London Councils, published today

The stark figures, showing more than half of all businesses facing difficulty recruiting the skilled staff they need, 20 per cent reporting problems retaining staff, and a lack of applicants for new jobs, come as the capital continues to top the UK unemployment league table.

With youth unemployment in the capital now at 22 per cent – more than 100,000 young Londoners – the figures showed it is “really important that we don’t level down London”, said Kensington & Chelsea council leader and London Councils business lead Elizabeth Campbell, speaking at the survey launch.

She was backed by former Tory MP for Putney and cabinet minister Justine Greening, now working with the Social Mobility Pledge network. “London’s challenge is an issue for everyone because London has been the powerhouse of the whole economy,” she said. “London needs its own levelling up plan.”

Low take-up of apprenticeships, with the survey revealing just seven per cent of London businesses employing an apprentice, is a “scandal”, she said, joining Campbell’s call for government to change the Apprenticeship Levy system to increase investment in the “talent businesses need”.

Traditional City business and professional services, less affected by Covid than retail and hospitality, also need to do more to improve opportunity for all Londoners, Greening added. “Businesses need to look at how they can play a bigger role in levelling up London, showing they can rise to the level of the challenge London faces.”

The challenge of hybrid working becoming permanent, with the survey finding that only three in 10 businesses employ no remote workers, is a threat to Central London, which City Hall needs to shape – “or it will shape us and our economy” – but also a chance for firms to recruit people previously locked out of City opportunities, she said.

Campbell also emphasised the work councils are doing, reacting against the survey finding that businesses feel councils could do more to address their concerns. She highlighted London Councils’ Pledges for Business blueprint on supporting economic recovery, launched in June.

And she challenged the government’s recently-announced allocation of cash under the UK Community Renewal Fund, which saw London receive just 1.9 per cent of the total funding despite having 13.4 per cent of UK population. “It behoves us all to keep beating the drum for London,” she said. “For the country to thrive, we need London to thrive.”

Businesses’ biggest fear remains the possibility of a new pandemic-induced lockdown, the survey revealed, after the impact of previous measures had been particularly severe in the capital.

“While London has shown itself to be a resilient city, a drop-off in footfall would once again devastate businesses of all sizes. If the city is to build back better, the government must have a clear road to recovery that keeps us out of another lockdown,” said Chamber chief executive Richard Burge. “It would be better to take sensible measures that don’t restrict the economy now than face a lockdown in the winter.”

“The government must also address the disruption that is still roiling the labour market in London and throughout the country,” he added. “It is vital that Londoners out of work are properly supported in developing the skills needed to fill the roles businesses need.”

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