Can local employment training help address the UK’s productivity puzzle?

Engineering trainees in Germany. Image: Getty.

Labour market data from the Office for National Statistics shows that the employment rate has never been so high. But real wages are still below their 2007 peak and productivity remains stagnant, suggesting that despite the employment-led recovery, some important labour market challenges remain.

As stressed in the recent Centre for Cities briefing on the industrial strategy, a key problem of the UK economy is its skills base. The skills of any workforce are crucial for building a strong economy and improving businesses, growth and wages. But as shown in our “Competing with the Continent” report, most UK cities are lagging behind their European counterparts in this area.

There is evidence that employment training can be effective in tackling this issue, by not only bringing people back into work but by also helping them acquire new skills and move up on the earnings ladder. In around half of the evaluations on this topic reviewed by the What Works Centre, employment training had a positive impact on wages and employment.

But in terms of outcomes, the way the training is designed matters. Looking at the duration of training schemes, the review found that short programmes are more effective for less formal training activity, while longer programmes generate gains when the content is skill-intensive – but that the benefits take longer to materialise.

When it comes to the format of the training, on-the-job training programmes tend to outperform classroom-based ones. This is because employers engage directly with the course and the participants tend to acquire skills that match more closely what employers need. This could also be due to the fact that the participants have already established a relationship with their potential employer.


But the evidence on the effectiveness of different types of delivery remains inconclusive. Looking at the public versus private delivery, the review did not come to any strong conclusions on which one is more effective. 

The evidence was also inconclusive on whether a programme delivered nationally is more effective than one delivered locally – none of the evaluations reviewed looked at this issue specifically. But understanding the role that local government can play in tackling the skills issue is crucial for two reasons.

Firstly, our work shows that the UK is not a single national labour market but a series of overlapping ones, and skills programmes can bring benefits if tailored to meet the demands of the local economy (as argued in our city deals and skills report). Our case studies library provides some concrete examples of how this might work. Secondly, the newly elected metro mayors can make a difference on this policy area as skills is one of the powers being devolved.

The government seems to be becoming more and more aware of this local element with the recent announcement of new employment schemes that will more closely reflect the different economic realities seen in different places.

But what the What Works Centre study reveals is the lack of evidence on what policies are effective in this area. As my colleague Elena Magrini argued in her recent blog, to make the most of these schemes, local authority officers involved in these new programmes should become the champions of evidence.

This means that, when implementing these schemes, local authorities should build on the existing evidence that both the What Works Centre and our case studies library provide. Once these schemes are up and running, they should be accurately monitored so that we can improve our knowledge of what works in this important area.

 Gabriele Piazza is a researcher at the Centre for Cities. This post was originally published on the think tank's blog.

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A warped mirror: on gentrification and deprivation on London’s Caledonian Road

The London Overground crosses Caledonian Road. Image: Claude Lynch.

Capital cities are, more often than not, a focal point for the stark divide between rich and poor – places where the most economically deprived meet the most economically empowered. In London, these divides can be more than stark: they can be close, even intimate, and there are districts where crossing the street can be like entering a different world. One such street is the Caledonian Road.

Known local as “the Cally”, Caledonian Road runs for about a mile and a half, from Kings Cross to the Nags Head junction in Holloway, and was built in 1826 to provide a new arterial route to the north from the West End. At first, developments on the road were sparse; among the first notable buildings were the Royal Caledonian Asylum, which gave the road its name, and H.M. Prison Pentonville.

For some time, the northern half of the road was seen as far removed from central London, which stymied development. It wasn’t until the latter half of the 19th century residential development really got going. By the time Caledonian Road station opened on the Piccadilly line in 1906, the area was flush with Victorian terraces.

These, though, mainly lay on the eastern side. To the west, the proximity of King’s Cross prompted the development of heavy industry, particularly the clay kilns that were helping to build Victorian London proper. The divide had begun:  the east side of the street, the area known as Barnsbury, was notably quieter and calmer than the west side. Ever since the 19th century, the ‘V’ formed by Caledonian Road and York Way has been known for a high incidence of gang violence and social problems.

As in many parts of London, the end of the Second World War brought a chance to start from scratch. Many of the slums to the west of the Cally had been bombed to smithereens, and those that remained still lacked gas and hot water.

But this was the era of municipal dreams: Islington council cleared the slums and constructed the Bemerton Estate. Instead of reflecting the industrial history of the area, the estate reflected Barnsbury back at itself, treating Caledonian Road as some sort of warped modernist mirror. The square gardens of Barnsbury were reimagined as the spaces between the highrises of Bemerton, and this time, they were actually square.

The estate was immediately popular, its open design prompting a renewed sense of community in the west. But it didn’t last.

Square gardens on one side, not-so-square on the other. Image: Google Maps/CityMetric

As far back as the 1950s, Islington had already become synonymous with gentrification. Forty years later, before moving to Downing Street, Tony Blair’s London residence was Barnsbury’s leafy Richmond Crescent. House prices in the area have gone through the roof and now Barnsbury is mainly home to a the professional elite.


At the same time, though, Caledonian Road’s warped mirror has given Bemerton the exact opposite: in spite of attempts to rejuvenate it, downward spiral of deprivation and antisocial behaviour have blighted the estate for some time The promise of inviting square gardens and communal living has been inhibited by crime and poverty; the gardens lie empty, while those in Barnsbury thrive.

The disparity of wealth across Caledonian Road is regrettable. That’s not just because it speaks to a wider segregation of London’s rich and poor – a phenomenon exemplified last year by the Grenfell Tower fire in Kensington & Chelsea, the richest borough in Britain. It’s also because, in the Bemerton Estate, planners had thought they saw an opportunity to offer more Londoners the idyll of square gardens and leafy streets, often reserved for the richest.

It might be too much to claim the estate as a failure; events such as the Cally Festival aim to bring together both sides of the road, while other council programmes such as Islington Reads help to foster a greater sense of neighbourhood.

Road should never divide us; rather, they should unite those who live on either side. The spirit of Caledonian Road should cross the gap – just like the railway bridge that bears its name.