The COVID-19 impact in numbers

There is no doubt that the impacts of the global pandemic have been hard felt in London. Analysis from KPMG (Levelling up and COVID19*) suggests that London could be the second hardest hit region in the UK by the pandemic. The latest KPMG/REC Report on Jobs recorded a rise in total candidate availability, albeit hiring levels are beginning to slowly stabilise.

Meanwhile according to figures from the ONS, from March to July 2020, the number of unemployment claims by residents aged 16+ in the capital increased by 148 per cent (274,790) and the rate of economic inactivity in London (the proportion of 16 to 64 year olds not in work and not looking for or not able to work) was 20.2 per cent.

These figures make for worrying reading, with the number of people looking for work in the Capital on the rise, whilst the number of jobs available declining.

But whilst the overall employment landscape looks bleak, the number of employers looking for staff with digital skills has strengthened. Research by Tech Nation has shown a 36 per cent increase in tech vacancies since lockdown.

The skills agenda in London

Technology has played a central role in helping many businesses move their sales operations online or their employees work from home and remain productive through the pandemic. It has also hyper accelerated the need for London to retrain and re-skill its working population with digital skills. With London being recognised as a world leader in innovation, we are in a strong position to be a UK leader in technology which will have a positive impact on the economic and societal issues that the city faces.

When London eventually manages to get back to work, there will be a greater focus on how we arm our workforce with the digital skills that employers will need going forward. With the reduction of retail space on our high street and the rise of online channels, we are likely to see fewer jobs in the retail sector in the future. The role of the industry as a social driver of entry level local jobs is now under threat and raises important questions around how we move those skills into other parts of society that need it more (i.e. the care sector).

The challenge remains however, how can we best reach as many people as possible to upskill and retrain?

Retraining large volumes of people will be a challenge and requires a huge reskilling operation. Getting this right will see greater productivity and economic prosperity across London, but getting it wrong could lead to much wider socio-economic gaps across societies already feeling locked out from opportunities.

To get this right, it’s important the Government works in a meaningful three-way partnership with employers and training providers. The private sector will need to step up to help drive this reskill operation.

This is the perfect time for the private sector to work together with each other and with policy makers for the greater good of London and its workforce. There is a need to find a common front and be more joined up, particularly when it comes to giving the London business community a voice and speaking as a collective community.

Although City Hall already has a strategy for London to have access to connectivity, basic digital skills and digital employment opportunities and support by 2025, the response to the COVID-19 pandemic has highlighted the challenges that remain around digital access. A key mission for City Hall working with the boroughs will be around digital inclusion.

London First has commissioned a project to get the granular data on who needs devices and who needs skills. Based on the results, a minimum access package needs to be available – be it devices, skills or connectivity. There will be a need to work with voluntary and community groups to help and public and private collaboration is absolutely needed to drive inclusion around London’s skills agenda.

Even before the pandemic hit, the Government introduced the National Retraining Scheme alongside funding to tackle the UK’s productivity issues and growing tech skills gap, but there is an urgent need for this to be accelerated and adapted to help the hundreds of thousands of UK workers made redundant as a consequence of COVID-19.

Retraining and reskilling the future workforce of London is a huge challenge and there are no silver bullets. It will require a range of initiatives across the private and public sector, both individually and in tandem, to get on top of the challenge successfully.

This is both a challenge and an opportunity.

Now is a chance to create training and skills programmes to help workers transition to higher-skilled jobs. Longer-term developments, such as automation and AI technologies, could have an impact on the incomes of low-skilled workers in the future and upskilling now is worthwhile from both an economic and social perspective.

Like the rest of the country, the region faces a period of sustained significant economic crisis but using this time to reset our skills agenda will not only help London achieve greater productivity and resilience in the longer term, but crucially, it could also unlock the potential of some of our most disadvantaged communities and make our prosperous city a fairer place for all.

 

*https://home.kpmg/uk/en/home/insights/2020/04/chief-economist-s-note-levelling-up-and-covid-19.html

https://home.kpmg/uk/en/home/media/press-releases/2020/10/kpmg-and-rec-uk-report-on-jobs.html