Blog Post

Skills and employment: What can the Mayor do to help London recover?

With election day approaching, many voters want the mayoral candidates to demonstrate how they will help London’s economy recover from the coronavirus crisis

This was apparent in a recent pollwhere almost 60 per cent of Londoners picked the economy, education or inequality as a top issue facing London.  They are right to be concerned about the city’s economy and access to opportunity. London has seen bigger rise in unemployment than any other region and is also recovering much more slowly. Young people have been at the sharp end of thisaccounting for half of all job losseswith young Black people most affected.  

The pandemic has also created an education emergency due to lost learning: children have lost over five per cent of their entire time in school – and the Institute for Fiscal Studies estimates that their aggregate lifetime earnings will be £350 billion lower because of this. Again, the impact of learning loss has been concentrated among disadvantaged pupils, who have had less home learning. 

There is no doubt the next Mayor of London will want to tackle these issues head on – but will they be able to? 

On schools, the answer is relatively straightforward. The Mayor has no formal powers over what happens in schools or how they are funded: early years, primary and secondary education are entirely funded and regulated by government. So the Mayor won’t be able to change what happens in schools 

The Mayor of London has more power over courses for adults. Last year was a quiet milestone in terms of skills policy: the devolution of the Adult Education Budget agreed in 2016 finally kicked in, giving London and six other citiemore control over courses for adults (previously no UK city had formal powers over education spending). The Adult Education Budget brings together funds for adults to engage in part or full time courses outside the apprenticeship frameworkas well as top up courses spanning language, work preparation or arts courses. The Adult Education Budget is only about 1.5 per cent of all public funding into education and skills, but devolution is a chance to tailor course provision to the specific needs of Londoners.  

In spite of this good news there are two constraints on the Mayor’s ability to act upon the major education and economic challenges facing the city. 

First, the Mayor inherited a budget that’s been cut to the bone: adult education spending was £4.5bn for England in 2010, by 2019 it was £1.4 billion – a 75 per cent reduction in real terms. The London portion of the Adult Education Budget is just over £300 million a year  –  which may sound like a lot – but in reality is only about £45 per adult, while fees for full-time courses at a university or local college are usually in the thousands of pounds. 

To make up for the cut in funding the government introduced the apprenticeship levy on employers, which was worth £2.4 billioin 2019. But employers get to decide which courses to spend the levy on and unspent funds are transferred to government, not the Mayor. And where new investment has been unlocked in response the pandemic, such as the National Skills Fund, government  allocated it themselves, again without involving London’s Mayor.  

Second, the Mayor currently distributes the European Social Fund for investment in education projects, worth one fifth of the London portion of the Adult Education Budget. The government plans to replace European funds with the Shared Prosperity Fundbut this will be allocated centrally – essentially removing funding from the hands of local and regional government.  

Although the Mayor’s ability to act on education and skills remains limited, there are other ways for theto expand training and employment opportunities  such as through campaigns, taskforces, or philanthropic activity. For example,  Boris Johnson created the Mayor’s Fundwhich offers grants to projects supporting disadvantaged young people into learning. Sadiq Khanset up a team to nudge London businesses into spending their apprenticeship levy, and promoted training in construction through Construction Academies. The closest thing to an education budget that Mayors do oversee is spending by the London Economic Action Partnership, which distributes some government grants for economic growth. Sadiq Khan has used some of these grants for college infrastructure upgrades. 

The Mayor of London can also use their position to lobby for change, even in areas where they have no direct control. Sadiq Khan has done this recently by setting out his recovery missions’  which include reversing the rise in unemployment within two years. One could imagine how the next Mayor could argue for school catch up programme that matches the scale of lost learning and focuses on supporting children from disadvantaged backgrounds 

Like most of the challenges facing London, addressing the scarring impact of the pandemic on employment and education will require the Mayor and government to work together. Londoners should expect mayoral candidates to set out how they plan to spend the Adult Skills Budgetbut particularly how they will speak up for them at such a challenging time for the city. 

Note: This blog post was first published on 4 March 2020 and has been updated to account for the ongoing coronavirus pandemic.



Nicolas Bosetti is Research Manager at Centre for London. Follow him on Twitter.