Self-employment is booming in cities but too many lack access to training

Changes in the labour market and the gig economy are playing out differently across the country.

Press release published on 9 October 2019

  • Link between the strength of a local economy and the rates and character of self-employment.
  • Self-employed people need better access to training to respond to the changing world of work.
  • Reform of taxation needed to future-proof self-employment.

New Centre for Cities’ research has revealed a post-financial crisis self-employment boom in Britain’s urban areas. But too many people working for themselves lack access to training – raising concerns about their long-term security and many cities’ future economic strength.

Self-employment in cities has risen by 44% since 2008, outpacing the national average by almost 25%. But nearly 80% of urban self-employment is mid and lower-skilled in industries such as construction – which is the most popular industry for self-employment in cities – transport, arts and personal services.

While cities need a mix of high and low-skilled employment, high-skilled service export work creates the strongest conditions for economic growth.

People in weaker city economies are more likely to be in lower-skilled self-employment. In Burnley the number of self-employed people has grown by almost 50% since 2008, but just 14% of them are in high-skilled work. Compare this to Cambridge where 42% of self-employed people are in high-skilled work – the highest proportion in the UK. The exception to this trend is Slough, which is the most productive city in the UK but has the lowest share of high-skilled self-employed people.

Everybody should undertake training to ensure their skills remain relevant, but this can be more difficult for self-employed people than employed ones who can access companies’ training funds. This will become a more pressing policy issue if the number of self-employed people continues to rise as it has done in the last decade.

Cities with the highest and lowest proportions of high-skilled self-employed people

Rank Highest Share of self-employment that is high-skilled (%) Lowest Share of self-employment that is high-skilled (%)
1 Cambridge 41.8 Slough 10.6
2 Oxford 41.1 Luton 10.9
3 Edinburgh 35.2 Mansfield 13
4 Cardiff 33.8 Barnsley 13.2
5 Brighton 33.0 Basildon 13.2
(National average: 21.9%)

Since 2012 there has been a rise in people supplementing regular employment through self-employment, particularly in cities with strong economies. In Cambridge 37% of self-employed people do this – double the amount in Blackburn.

Cities with the highest and lowest proportions of people supplementing employment through self-employment

Rank Highest Share of self-employed people supplementing regular income (%) Lowest Share of self-employed people supplementing regular income (%)
1 Cambridge 39.9 Blackburn 19.4
2 Oxford 37.4 Burnley 19.7
3 Edinburgh 32.9 Luton 20.5
4 Cardiff 31.4 Blackpool 20.6
5 Exeter 31.3 Bradford 20.7
(National average: 25.3%)

Concerningly, few self-employed people undertake training to future-proof their skills against changes in technology and consumer demand. They are further disadvantaged by a tax system that prevents them from deducting many training costs, particularly training to acquire new skills, from income tax.

The Government should act to ensure that many of the self-employed people in economically weaker cities do not fall further behind as they manage the disruption caused by technological change.

Centre for Cities sets out three proposals for the Government:

  1. Allow self-employed people to deduct training costs from income taxes: Self-employed people are allowed to deduct costs for updating skills relevant to their role – but not for new ones. The Government should incentivise the acquisition of new skills to allow self-employed people to move between industries.
  2. Bring together businesses to invest in training: Industries with high rates of self-employment should build on the example of the construction sector and establish industry training boards that support people looking to upskill or retrain, with particular attention to self-employed individuals.
  3. Strengthen local economies: A predominance of lower-skilled employment is often a reflection of weakness in the local economy. Policy incentives to attract more high-knowledge industries to struggling cities would provide better employment prospects for everyone, including people that are self-employed.

Centre for Cities’ Chief Executive Andrew Carter said:

“One in five jobs in cities is likely to be lost to automation and, though we are seeing a self-employment boom, too many people working for themselves in cities are in lower-skilled roles and lack access to the training they need to future proof their careers.

“The Government should act to make it easier for the growing numbers of self-employed people can develop their skills. The rules governing what types of courses self-employed people can deduct from income taxes should be relaxed and establish industry training boards that support people looking to upskill or retrain.

“Without measures such as these there is a very real risk that many self-employed people in Britain’s cities will face an uncertain future.”

Andy Chamberlain, Deputy Director of Policy at IPSE, said:

“This is a timely and excellent report that shows the enormous rise of self-employment in cities across the UK. And not only that, but also the rise of different types of self-employment: from full-time contracting to side-hustles, which allow people to add to their income and pursue a passion in their spare time.

“Crucially, the report also shows just how vital freelancers and the self-employed are for a range of key industries: particularly construction, finance, personal services and transport and communication.

“Despite the vital contribution of the self-employed, however, the report also highlights a key challenge: access to training. Unlike employees, the self-employed generally cannot get training through their client: they have to arrange it and pay for it themselves. Worse: time they spend on training is valuable time they are not being paid for.

“At IPSE, we fully support the Centre for Cities’s calls for self-employed people to be able to deduct training costs from their income taxes. We also believe the New Enterprise Allowance should be extended to give self-employed people mentoring and benefit support for two years.

“The self-employed are clearly a rapidly growing part of our workforce, making a vital contribution to many sectors of the economy – and the government must make sure they can access the training support they need.”


Notes to editors

About Centre for Cities:

  • Centre for Cities is a research and policy institute, dedicated to improving the economic success of UK cities.
  • We are a charity that works with cities, business and
  • Whitehall to develop and implement policy that supports the performance of urban economies.
  • We do this through impartial research and knowledge exchange.
  • For more information, please visit

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