When the London Skills and Employment Board was established, there was no single source of clear and coherent evidence on London’s labour market on which to base a strategy. The 2007 London Story was the first publication that pulled together evidence on skills and employment from a vast array of sources. It set out what the evidence meant for Londoners and London’s employers, and how the capital’s labour market differed from the rest of the UK.

Now in its fourth year, The London Story continues to draw together crucial evidence and ask important questions about employment and skills in the capital: how has the recession impacted on the London labour market, why does London have persistently high levels of worklessness, how are the capital’s young people faring, and what does the future look like for people living and working in London?

On these pages you will find information about findings from the 2010 update, as well as links to previous London Story publications from 2007, 2008 and 2009.

London has a highly successful economy, even though the recession has hit jobs

• London’s economy has grown faster and has been consistently more productive than the UK economy over the past 20 years, and now accounts for over one fifth of the UK’s economic output.
• London, like the rest of the UK, has been through a severe recession during which employment fell and redundancies increased. The short-term outlook for
• London’s labour market is highly uncertain; economic growth is projected to be relatively modest and may not require additional workers.

The jobs available are increasingly polarised between those that require high-level skills and those that require low-level skills, with a falling number of opportunities in between

• Employment in London is concentrated in the service sector and most jobs (55%) are in occupations that require high-level skills.
• Demand for low-skilled service jobs is also projected to increase, while the number of people working in intermediate level jobs is expected to fall.

There is huge competition for the jobs available...

• Over 5.2 million people of working age live in London.
• The city attracts people from all over the UK and abroad, many of whom have qualifications that are higher than those of the average Londoner. This includes talented young graduates who move to the city, international migrants and over 0.78 million people who live outside the city but travel in for work.

... and so London employers do not face major skills gaps, due to the availability of large numbers of highly qualified people.

• Over two million Londoners have high-level qualifications – at level 4 or above of the National Qualifications Framework.

London’s challenge is to ensure that more Londoners acquire the skills needed to successfully compete in the city’s labour market...

• Londoners with high-level qualifications are much more likely to be in work than those with low skills.
• More young Londoners are gaining qualifications and participating in higher education than ever before. But a large number of London’s young people are not achieving a level 2 qualification by the age of 19, and do not tend to gain higher level qualifications when they are older. These young Londoners face very tough competition for work – both now and in the future.
• Over 600,000 Londoners have no qualifications.

... and to tackle worklessness, which costs at least £5.1 billion each year and accounts for half of all child poverty found in London.

• London has high levels of worklessness with one in three working age residents out of work and over 690,000 people claiming an out-of-work benefit, most of whom have claimed for two years or more.

The 2010 update of The London Story was prepared between May and September 2010 using the latest data available. 

Download the report in full (PDF format).