Unemployment: London councils intervene and business likes it

The old-fashioned attitude that says business needs freeing from the state so that it can be competitive is being overturned by councils of all colours.

The old-fashioned attitude that says business needs freeing from the state so that it can be competitive is being overturned by councils of all colours

There is long-standing but dangerous misdiagnosis of what business needs from government. Far from wanting the state to ‘get out of the way’, three London boroughs have found that business appreciates local intervention in the labour market.

One of the great challenges at the heart of the UK’s economic troubles is skills. The World Economic Forum’s global competitiveness report has seen skills become the fourth biggest challenge to doing business in Britain. Only a lack of access to finance, and generic gripes about red tape and tax, are more common complaints among companies than the lack of suitable skills.

At the same time, families are anxious about unemployment, particularly among young adults. Alongside that, under-employment sees far too many hard working people doing jobs that simply don’t pay enough to cover their rent.

So what are the solutions?

Talking to Labour candidates in Camden, they were pleased to be promising voters 1,000 apprenticeships over the next four years. Apprenticeships are in vogue in politics and inner London is young, so the pledge was powerful and well received.

Of course, a promise is meaningless if it can’t be delivered, but this policy was born of past success. In 2013 Camden’s 100 in 100 campaign aimed to create 100 apprenticeships in 100 days. It created 122.

To achieve this there was no cajoling of companies or potential apprentices. The whole scheme was based on collaboration. The local council set out to meet with businesses and run workshops to helped companies, often SMEs who worried about the complications involved, to analyse whether an apprenticeship might help them grow. Many concluded that it would and promptly hired one.

South of the river a different approach is being taken by Conservative run Wandsworth. But that different approach has the same lesson behind it.

Wandworth is home to a major regeneration that will transform places like Nine Elms through large scale construction. It is well documented that regeneration proves more successful and more popular when the benefits are felt by existing residents. So the council is targeting developers through its WorkMatch programme.

Workmatch saves companies some of the cost of advertising and appointing for the many jobs and apprenticeships that large scale construction inevitably creates. Instead, the council will match local people to these positions for free, and will do so in advance so as to open up new and lasting careers for residents.

When it comes to regeneration though, it is hard not to mention Newham. Home to several of Europe’s largest regeneration projects of recent years, candidates point out to residents that even the 2012 Olympics was just a part of a much bigger ongoing programme.

Newham established its Workplace scheme in 2007 to help local unemployed people secure the jobs being attracted to their area. The support that Workplace offers to business is extensive. It helps inexperienced companies draft job descriptions and even takes part in the interview process.

Most notable though, is that it trains staff for famous large companies moving to Newham too.

If a company is to open up a store or a plant in Newham, Workplace pre-trains local residents for them, using training schemes drawn up with the firms themselves. The commitment from the employer is simple. In return for Newham doing this work, they simply have to interview all candidates that pass the training. Not surprisingly, most get the job and keep it. In seven years Workplace has helped 20,000 residents find work with 900 different employers.

These three schemes are all different in scale and focus, but ultimately they demonstrate the same thing.

The old-fashioned attitude that says business needs freeing from the state so that it can be competitive is being overturned by councils of all colours. A more modern reality is emerging; one that recognises business is more competitive through collaboration with the state.

Gavin Pearson is editor of Business Innovate, a new think tank formed to demonstrate that competitiveness is best achieved through fairness, responsibility, inclusivityand innovation. You can follow them on Twitter here

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