In a speech to the LGA’s annual conference today, David Sparks said action must be taken to avert what he called ‘a chilling future vision of millions of people without the skills to take up jobs’.
New research for the LGA by the National Institute of Economic and Social Research has estimated that in less than a decade as many as eight million people could be without a job or in work they are over-qualified for.
According to the analysis, set out at LGA’s annual conference today, there will be skill gaps in 2022 as a result of three specific forces in the labour market.
There will be 9.2 million low-skilled people chasing 3.7 million low-skilled jobs, resulting in a surplus of 5.5 million people at increasing risk of unemployment, while there will also be 12.6 million people with intermediate skills chasing 10.2 million jobs – a surplus of 2.4 million people.
In addition, employers will struggle to recruit for an estimated 14.8 million high-skilled jobs with only 11.9 million high skilled workers – a gap of 2.9 million.
As a result of these mismatches, many people face being in insecure work and reliant on benefits, at a huge cost to the local and national economy. This would result in lower national labour productivity, potentially leaving the government with as much as £164bn lost in tax revenue, the examination warned.
Outlining the conclusions to council leaders this afternoon, Sparks said the current national employment and skills system was not fit to respond to this, despite as much as £13bn being spent across a host of schemes.
Councils running local initiatives have much higher levels of success but are constantly challenged by their lack of influence over national policy, he told delegates.
Expanding local employment support so councils can target training and employment funds, and join up with services such as jobs centres, represented the long-term answer.
‘We have a once-in-a-lifetime opportunity to enable everyone to benefit from growth and ensure they are fully equipped with the skills they need to compete for future jobs,’ Sparks added.
‘The current system for getting the unemployed into work needs radical reform. Hundreds of thousands of people – a lost generation – are being let down and sucked into an unemployment twilight zone, through no fault of their own. This staggering situation is only going to worsen without swift and decisive action.
‘Councils are doing everything they can but the current system is a maze of fragmented and overlapping schemes. This has to change for the future economic prosperity of this country.’
The call for more control over employment support forms part of the LGA’s campaign launched at the conference for the policies from last year’s Rewiring Public Services report to be implemented by whichever party forms the government after next May’s general election.
