London Youth Labour Market Summary - Chestnut Grove Academy
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London Youth Labour Market
Summary
September 2020
Welcome
This is a summary (updated monthly) of some of the most important information about labour market and
employment trends for those advising young people in Central London.
Trevor Bottomley
Employment & Labour Market Consultant
News & Publications
The government Kickstart scheme launched. The programme will offer 6-month work placements (as
part of the government’s ‘Plan for Jobs’) to 16-24 year-olds on Universal Credit. The government will fully
fund each Kickstart ‘job’ - paying the age-relevant National Minimum Wage, National Insurance and
pension contributions for 25 hours a week. Employers can choose to top up this wage.
Businesses are now able to sign up, but the first placements are not expected until November, with
Jobcentre staff referring people who fit the criteria and who they think may benefit (according to The Sun).
Employers offering fewer than 30 placements will be asked to make a bid through an intermediary, such
as a Local Authority or Chamber of Commerce, who will then make a combined bid. The Federation of
Small Businesses has expressed disappointment that the scheme is aligned to big firms.
Some have compared Kickstart to the YTS programme of the 1980s (eg FE News). However, YTS had a
formal compulsory training element and Kickstart has more similarities to the Young Workers Scheme
(YWS), which ran from 1982 to 1986, and was an employment subsidy with no formal training requirement.
Research, summarised by the Institute of Employment Research in 1999, found that as little as 16% of
YWS placements were additional to employment that would have existed in the absence of the wage
subsidy. Although guidance states Kickstart placements cannot replace existing or planned vacancies,
there are still concerns that, in some cases, it could lead to job replacement rather that job creation (eg FT
opinion). On the other hand, YWS covered a maximum of 37.5% of wages and Kickstart covers up to
100%, which should make it more likely that employers can afford to create additional, rather than replace
existing roles.
Impact of COVID-19 on working lives, from CIPD, examines the experience of work during the COVID-
19 pandemic. Job insecurity remained high in May and June, where 23% and 19% respectively thought it
likely they would lose their job, compared to only 13% in January. Pay and financial security has also been
adversely impacted. In June, around 2-in-10 of non-furloughed workers are receiving lower pay than usual,
rising to 7-in-10 for furloughed workers.London Economy
The latest London forecast from GLA Economics (issued on 15 June 2020) suggested that:
▪ London’s real Gross Value Added (GVA) growth rate could be -16.8% this year due to the present
COVID-19 crisis. This growth rate is then expected to rebound to 17.2% in 2021 before returning
to more normal figures in 2022 (4.5%).
▪ In line with GVA, London is projected, in this scenario, to see an unprecedented fall in the number
of workforce jobs in 2020 (-7.0% in annual terms) which will be slowly recovered through positive
growth rates in 2021 (1.4%) and 2022 (4.9%).
▪ Similarly, London’s household income and expenditure are both projected to decrease notably in
2020 before starting to grow again in 2021 and 2022.
Employment
The Office for National Statistics www.nomisweb.co.uk website has data on employment, unemployment,
wages and qualifications at national, regional, local authority and ward level. The latest figures for
employment by industry sector (based on June 2020 data):
Sector London % UK %
Agriculture, Forestry & Fishing 0.0 1.0
Manufacturing 2.3 7.5
Construction 5.0 6.5
Wholesale, Retail & Vehicle Repair 11.0 14.1
Transport & Storage 4.5 5.1
Hospitality & Catering 7.2 6.8
IT & Communications 8.5 4.4
Finance 6.5 3.2
Real Estate 3.0 1.9
Professional, Scientific & Technical 13.8 9.1
Administration 9.6 8.1
Public Administration & Defence 4.1 4.3
Education 7.4 8.4
Health & Social Work 9.9 12.7
Arts, Entertainment & Recreation 3.4 2.8
Other Services 2.8 2.8
Future Employment
The report from GLA Economics shows that jobs in London (pre COVID-19 crisis) were projected to grow by
an annual average rate of 0.78%, equivalent to 49,000 jobs per annum, to reach 6.907 million in 2041. The
report also provides future projections for both the occupations and qualifications of those employed in
London:
▪ Jobs in the professional, real estate, scientific and technical sector were expected to grow strongly,
accounting for over a third of the total increase expected in London to 2041.
▪ Strong employment growth was also expected in the administrative and support services,
accommodation and food services, information and communications sectors, education and health
sectors - the six sectors accounting for nearly three fifths of the expected total London increase in
jobs to 2041.
▪ Declines were projected in manufacturing and some other sectors, including wholesale,
transportation & storage and public administration.
The full report can be found in the GLA London Datastore.Unemployment
The unemployment rate in London remains higher than the UK as a whole and much higher than the South
East. The September 2020 ONS Regional Labour Market Statistics (covering the period May to July 2020)
show that:
▪ Unemployment in London was 5.0% compared to 4.1% for the UK as a whole and 3.5% in the
South East.
▪ Employment was 74.3% in London compared to 77.0% in the same period last year.
Figures for July 2020 from www.nomisweb.co.uk show that:
▪ The all age claimant rate was 8.0% in London, above the 6.5% for the UK as a whole.
▪ The 18-24 claimant rate was 10.3% in London, above the 9.4% for the UK as a whole.
▪ The 18-21 claimant rate was 9.6% in London, above the 9.1% for the UK as a whole.
Graduate Employment
According to the latest regional data for London (2016-17 academic year) published by Prospects
Luminate:
▪ Employment prospects are positive, with a 7.2% year-on-year rise in graduates securing full-time
employment. London boasts a higher than average professional employment rate for graduates
(78.5% compared to 73.9% of all university leavers in employment), and this figure has increased
from 75.7% in 2015/16.
▪ The business, HR and finance profession continues to be popular, with a 10.7% year-on-year
growth in entrants.
▪ More graduates pursued arts, design and media careers (up 16.5% since 2015/16), and this rise
could continue as the creative sector is one of London’s fastest growing industries, providing one
in six jobs in London.
▪ IT roles have also seen a 9.7% increase in entrants since 2015/16.
▪ London offers graduates the highest starting salary of any UK region (£24,991). Although it is
above the national average (£22,399), the higher costs of living will limit the amount of disposable
income.
The full regional and national reports can be found on the Prospects Luminate website.
The new HESA Graduate Outcomes Survey was due to be published in Spring 2020.
COVID-19 Impacts: Access to the Workplace, from the Sutton Trust, found that, so far, the pandemic
appears to have had a mixed impact on employers’ plans for graduate employment. While a sizable
proportion of the graduate employers said they are expecting to hire fewer (33%) or no (6%) graduates
over the next year, 27% anticipated hiring more. 46% of current undergraduate students said the pandemic
has had a negative impact on their ability to gain graduate employment. 18% had had work experience
placements cancelled or postponed, 15% citing reduced access to their university careers service, 11%
having interviews cancelled, and 4% having a job offer withdrawn.
Apprenticeships
In London the number of people of all ages starting an apprenticeship increased by over 400% between
2005-06 and 2016-17, before falling following the introduction of the levy. The proportion of under 25-year-
old starters fell from 100% to 54% nationally over the same period, with London below the national
average for under 19 starters. Provisional figures from the Department for Education show the impact of
the lockdown with apprenticeship starts from 23 March to 31 July falling 47% on the previous year. Young
people appear to be the hardest hit as starts for those aged 16 to 18 plunged by 68%. Starts on Level 2
apprenticeships have also fallen by 63%, more than any other level.Central London Apprenticeship Vacancies*
on GOV.UK Find a apprenticeship website
2500
2000
1500
1000
500
0
Feb Mar Apr May Jun Jul Aug Sep
2019 2020
Vacancies in Central London (*within 10 miles of Victoria station) saw a drop from 1,518 in September
2019, to 589 on 22 September 2020.
The GOV.UK Find an apprenticeship service advertises vacancies across the country. Looking at a sample
of advertised vacancies in Central London (within 10 miles of Victoria station) on 22 September 2020:
Intermediate
Advanced
Adverts
Degree
Higher
Total
Sector
Agriculture, Horticulture & Animal Care - - - - -
Arts, Media & Publishing - 8 - - 8
Business, Administration & Law 7 84 7 2 100
Construction 1 1 - - 2
Education & Training - - - - -
Engineering & Manufacturing* 22 8 - - 30
Health, Public Service & Care 84 143 1 1 229
Information Technology - 34 11 2 47
Leisure, Travel & Tourism - - - - -
Retail & Commercial Activity 151 20 2 - 173
* Engineering & Manufacturing includes Chef vacancies
Minimum & Living Wage
The National Minimum Wage is set by the government, based on recommendations from the Low Pay
Commission. It is the minimum hourly rate that employers must pay their workers. In April 2016 the
government introduced a new National Living Wage, that must be paid to workers who are 25. This new
National Living Wage is not be confused with the London Living Wage, which is not binding on employers,
is based on the cost of living in London and is set by the Living Wage Foundation.
London National Minimum/Living Wage
Living Wage 25+ 21-24 18-20 Under 18 Apprentice**
from April 2020 (current rate) £10.75* £8.72 £8.20 £6.45 £4.55 £4.15
* The London Living Wage rate changes every November, while the National Living wage and National
Minimum Wage rates change every April.
** This rate is for apprentices under 19 or those in their first year. All other apprentices are entitled to the
National Minimum Wage for their age.This bulletin is produced for the Central London local authorities of Camden, Hackney, Islington, Kensington and Chelsea, Lambeth, Southwark, Wandsworth and Westminster. Whilst all reasonable steps are taken to ensure all information is accurate and inoffensive, we cannot take responsibility for any inaccuracies or for loss or damage arising from its use. Views expressed within the content of the LMI bulletin are of those supplying the information and are not necessarily those of the author unless explicitly stated. trevor@londonlmi.co.uk
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