London roadmap to tackle skills crisis unveiled

London’s leading business groups have published an ambitious plan to tackle skills shortages, address inequality and boost labour market inclusion in the capital, following the biggest data deep dive on the issues the capital has ever seen.

The London Local Skills Improvement Plan (LSIP) sets out a blueprint for getting more Londoners into better, higher-paying jobs by better matching training provision to employer demand. It has been led by BusinessLDN, in partnership with Federation of Small Businesses London (FSB London), London Chamber of Commerce and Industry (LCCI), and CBI London, with the backing of the Mayor of London and funded by the Department for Education.

The LSIP identifies the need to help employers navigate the complex and fragmented skills system. It also highlights four cross-cutting themes that should be prioritised to future-proof the capital’s jobs market: digital skills, green skills, transferable skills and labour market inclusion.

Its recommendations include launching a new one-stop-shop to support job-seekers, creating a London Recruitment and Skills Support Hub to help businesses navigate the fragmented skills landscape and steps to boost digital and green skills across the capital.

Annexes highlighting priorities and recommendations across different parts of London have been led by each of the capital’s sub-regional partnerships: Local London, South London Partnership, Central London Forward and West London Alliance.

Skills – the biggest challenge to recruitment

Skills shortages are a drag on London’s economy and put the capital’s position as a world leading city at risk. A survey of more than 1,000 London business leaders and HR managers conducted earlier this year by the four groups developing the LSIP found that three-quarters of firms (77%) were reporting open vacancies and of those two-thirds (65%) were struggling to fill them. More than half (57%) cited a low number of suitable applicants with the required skills as the biggest challenge to recruitment.

While London’s workforce has the highest levels of qualifications in the country, businesses are facing severe skills gaps and struggling to recruit, retain and upskill staff to meet the requirements they need. The capital’s unemployment is around 1% higher than the national average and 21.9% of the labour market was economically inactive for the three months ending January 2023 according to the Office for National Statistics.

The Mayor of London, Sadiq Khan commented ​“This is an extremely important plan as we work to develop the workforce our economy needs now and in the future, and build a better, more prosperous London for everyone.

“Skills shortages are a barrier to growth and I am pleased that we are teaming up with businesses to ensure Londoners have the skills they need to get on and succeed.”

John Dickie, Chief Executive at BusinessLDN, said ​“The capital urgently needs to tackle skills shortages to get more Londoners into jobs, reduce inequality and ensure businesses can access the people they need to grow. This roadmap sets out steps to future-proof London’s labour market by ensuring our skills system is fit for purpose as the transition to net zero and rapid technological change reshapes the jobs market. We will use the LSIP’s next phase to bring together London government, business and training providers to close the skills gaps holding back our economy by turning this plan into action.”

Sarah Murray, Director for Local London said “We are delighted to have contributed to the pan-London LSIP. This is the most in-depth research there has been into addressing skills needs and has revealed there are issues that are common across the capital and different in its sub-regions, highlighting the need to consider the capital as more than one homogenous city.”

Over the last year, the BusinessLDN LSIP team engaged with more than 1,000 employers, training providers and key London stakeholders to assess the London labour market and its key challenges.

⇒ Discover the report and detailed recommendations to improve London’s skills system for employers, job-seekers and training providers.

⇒ Find out more about our LSIP work and how to be part of the ongoing conversation