Employment and Labour Market Disadvantage in London

  • By Jenny Gulliford


There are 560,800 people in London today who want to work but are not currently in employment1. Of these 240,000 are actively looking for work2 and 320,800 want to work but are not currently looking for a job, often because of factors such as illness or child caring responsibilities3.

Certain groups are more likely to be unemployed. Youth unemployment still remains high. Over the last three years London’s unemployment rate among 16 to 24 year olds has stubbornly remained at 14.4 per cent - only the North East is higher4. Disabled people are still less likely to be in work than non-disabled people, with a disability employment gap of 26.3 percent in London that has barely improved in over a decade5.

Long term unemployment is also growing in the capital. After a long period of decline in the number of long term unemployed, the picture is now changing. Over 50 per cent of all Jobseekers Allowance (JSA) claimants have been claiming an out of work benefit for over six months, up from just 29 per cent in 2009.

But unemployment is only part of the picture - for many, getting a job is just the start of the walk out of poverty, and 58 per cent of Londoners in poverty live in a working household. This is a 50 per cent increase over the last decade6.

Employment support and the Work and Health Programme

Many boroughs already deliver targeted support aimed at London’s most vulnerable communities designed to help them back in to work. This expertise is being built on through the delivery of the Work and Health Programme in London. The London Work and Health Programmes will provide employment support for claimants who have long term health conditions or are disabled, and the long term unemployed.

The Work and Health Programme is a national Department for Work and Pensions scheme, but it has been devolved to London and Greater Manchester, giving control over the design and delivery of the programme.

Local areas have commissioned and will manage the programme at a sub-regional level, with much smaller Contract Package Areas than the national programme. Local areas have been able to adapt the programme to suit local issues and target certain groups.

Crucially devolution gives boroughs the incentive and means to integrate local council services with employment support – making sure everyone gets all the support they need to enter and stay in work.

Through securing match-funding from the London European Social Fund programme, London has significantly expanded the programme, bringing the total funding available up to £135 million over five years to support 50-55,000 people. The four sub-regions where the programmes are being delivered are set out below:

Map of London WHP sub regions

If you would like more information on the Work and Health Programme in your area please contact:

London still experiences significant levels of structural unemployment, low pay and in-work poverty. Jobcentres are well placed to help people who have relatively few barriers to work, but struggle to support these harder to help groups and people in-work. The roll out of Universal Credit will significantly increase the number of people who seek support through the Jobcentre putting it under further pressure.


The labour market in London is changing and employment support services need to change with it. Support needs to be targeted at helping people who have the greatest barriers to sustainable work. Local authorities are already delivering support to these vulnerable groups. Local authorities also have strong links with the business in their communities. This expertise needs to be built on.


London government is ready to take on the powers and responsibilities that the capital needs to create an employment system that enables everyone who wants a job to get one. London Councils is in the process of exploring what this would look like in practice and has identified the following as potential areas for further work:

  • A principle of subsidiarity for new employment programmes and funding streams: the government should take a ‘local first’ approach to tackling unemployment and in-work poverty, giving local areas the power to match their service provision with employment support efforts and deliver locally.
  • A focus on employment in the new UK Shared Prosperity Fund, and greater local control over how it is spent: The replacement for European Structural and Investment Funds, the UK Shared Prosperity Fund, must be designed and delivered locally with a focus on employment and skills and devolve to London government.
  • Re-focus employment support on the hardest to help and bring services together through co-location: All boroughs should have the opportunity to act as trailblazers and co-locate employment and local authority services and align skills and resources. This should be underpinned by joint governance structures and data sharing with the Jobcentre and Department for Work and Pensions, and could include the alignment of the Jobcentre Plus and sub-regional partnership boundaries.

A report outlining our recommendations in more detail will be published shortly. London Councils will be lobbying hard to make these ambitions a reality.

1 This figure is achieved by combining the total number of people who are unemployed with the total number of people who are economically inactive and say that they want to work.
2 Being unemployed is defined as being out of work, having actively looked for work in the last four weeks and being able to start work in the next two weeks.
3 NOMIS: Labour Force Survey, Labour Supply Aug 2017 – Oct 2017 Seasonally Adjusted
4 Ibid
5 NOMIS: Annual population survey - regional - Unemployment rate aged 16-64 - EA core or work-limiting disabled. July 2016 – June 2017.
6 www.trustforlondon.org.uk/publications/londons-poverty-profile-2017

Jenny Gulliford, Policy and Projects Officer

[email protected]  (T: 020 7934 9756)