Agenda and draft minutes

None.

The Working in Hackney Scrutiny Commission is commencing a scrutiny review looking at the changing London economy and the skills needed over the next 5-10 years.  As part of this review the Commission wants to consider how the Council should be preparing for the future economy and how residents could be supported to acquire the skills and knowledge needed for the future London and local economy over the next 5-10 years.

The speakers covering Future World of Work were:

·  Daniel Tomlinson, Research and Policy Analyst at Resolution Foundation

·  Cameron Tait, Head of the Changing Work Centre and Senior Research Fellow at Fabian Society

The speakers covering Future World of Skills were:

·  Joe Dromey, Senior Research Fellow atInstitute for Public Policy Research (IPPR)

·  Bill Davies, Head of Policy at Central London Forward.

The discussion covered:

·  Future of London’s economy and the business environment in the next 5-10 years

·  Nature of employment and work

·  Skills devolution and the adult skills system

·  Increasing polarisation and inequalities in employment (economic and social).

Presentations on the Future World of Work from

·  Daniel Tomlinson from the Resolution Foundation

·  Cameron Tait from the Fabian Society.

Resolution Foundation

Resolution Foundation opened their presentation by highlighting that bold claims have often been made about the future sometimes without strong evidence to support the statement.  ‘Brexit will lead to 300,000 new jobs’

Resolution Foundation outlined 5 reasons for the impact on the future world of work.

·  Housing

·  Inequalities

·  Pay freeze

·  Employment rate

·  Automation.

Housing

1.  Housing is and will remain a big issue due to the gap between the average earnings and house prices/rental values in the housing market.

2.  The average earnings for London have not increased substantially since 2005 compared to house prices and rental values.  This is the reason why housing is a big factor.

3.  If house prices were to fall there is a still a big gap between the earnings and affordability so this will remain a big issue for some time.

4.  For Hackney the weekly rent to earnings ratio shows rental prices are currently ¾ of the average person’s earning.

5.  The places that had high house prices and rental value in 2011 are still the locations with the higher values and have seen the biggest increases.  The graph below (figure 1) shows there is not an even distribution as expected.

6.  Housing will become central to London’s politics.

Figure 1

Inequalities

1.  London’s inequality is higher than the inequality for the whole of the UK.  This has been the trend since 1996.

2.  Inequalities rose steeply in the 1980s and has been flat since.  London has always been higher and has had a steeper increase compared to the rest of the UK.  It is expected that this inequality will increase further.  The rise is expected to be due to the tax cuts and benefits cuts.  Tax cuts at the top and benefit cuts at the bottom are disproportionally benefiting higher earners and affecting lower income households.

3.  Predictions for London is that low income will fall by up to 4% and high income will rise slowly.

4.  The continuation of the welfare reform will mean people at the low income end of the market will struggle to make ends meet.

Pay Freeze

1.  London to see a 17 year pay freeze.  London has seen the deepest pay freeze than other cities in the UK.  This is mainly driven by women experiencing the deepest pay freeze of all.

2.  Although the predication is earnings will rise over the next few years.  It is anticipated that earnings will rise slower than previously because they UK’s productivity and growth have downgraded.

3.  It is forecasted that pay will not return to its peak levels until the mid-2020s.  So in the short term pay will still be an issue.

Employment rate

1.  The gap has closed between inner and outer London.  London’s strong employment has been driven by people born outside the UK who are now living in London. 

2.  The Government’s policies have  ...  view the full minutes text for item 3.

Presentations on the Future World of Work from

·  Bill Davies from Central London Forward

·  Joe Dromey from the Institute for Public Policy Research.

Institute for Public Policy Research (IPPR)

The presentation covered the following:

·  The challenges with skills system

·  The issues that will shape the future of the skills system

·  The key reforms the Government are proposing to implement to address the issues.

Challenges with current skills system

1.  Over centralisation – The skills system is currently highly centralised with little opportunity for local authorities to adapt the system to meet the needs of local learners, employer & employees.

2.  Under funding – Further education (FE) hit hard by austerity.  FE has received a 40% cut to the Adult Education Budget (AEB) and it is half the size it was in 2010 – held flat in cash terms.  FE is starting to see the implications from the restrictions in funding and the impact on participation. 

The Government introduced advance learner loans in 2012 these are similar to student loans for FE.  Since learner loans were introduced participation in FE fell by a 1/3.  It is thought the advance learner loans have suppressed participation and limited participation.

3.  There has been too much on boosting supply and not enough on the demand for skills – A literature review 11 years ago set ambitious targets for improvements in qualification.  The Government has hit the targets for NVQ level 4 (just below degree level) and is not far off NVQ level 2 target (GCSE level). 

The percentage of people in the workforce with degree level qualifications has increased 11% however productivity over the same period has only increased by 1%.  The number of people with GCSE qualifications has increased by 10% but productivity has not improved and wages have decreased.  There has been too much focus on improving the number of qualifications and not enough attention paid to what qualifications are needed in the labour market.  The Government has a 3 million apprenticeship target but has not focused on what they need to deliver for these qualification to meet employer’s needs so that individuals can progress.

4.  Poor matching of supply and demand – the skills system currently is not effective in meeting employer demand which is why we have this current perplexing problem of increasing qualifications and skills gaps for some areas.  This is relevant to the choices made at school and university but also to FEs as they are output funded rather than outcomes for the courses they provide.  It does not cover the number of people they get into employment, the numbers that progress to FE study further or how their wages increase thereafter. 

5.  Lack of high quality vocational provision - For too long the incentives in the system encourage providers to provide high volume and low level provision.  This provision does not lead to further study, meet the needs of employers or allows people to progress.  The vast majority of FE provision is delivered at low level. 

It was  ...  view the full minutes text for item 4.

This item was cancelled.