Skills levels are a key component of the success of a city economy. Cities that have a high proportion of residents with no or low-level qualifications tend to have weaker economies, including low growth in the number of businesses, low wages and high unemployment.1 And poor skills levels don’t just affect the current strength of an economy; they also have long-term scarring effects on a city and the people who live in it.2
In particular, low skills are a major barrier to employment. With employment regarded as one of the primary routes out of poverty, the need to address low skill levels is key for cities. To do this, policy needs to ensure residents and workers are equipped with the skills local employers value. While part of this is about improving school performance, adult skills interventions are critical – around 1 in 10 people aged 25-64 in the UK have no qualifications.
Within cities low skills and high unemployment are concentrated in areas that have above average levels of social housing. Of those living in social rented homes, over 10 per cent are unemployed, compared to just 6 per cent of those living in private rented accommodation and 1 per cent among those who own their own homes. Overall, 32 per cent of social housing households have no-one of working age in work.3 And of the 3.6 million children living in poverty in England, 1.3 million are living in social rented housing.4 Given housing associations provide a significant amount of social housing in the UK they are often the institution that is working most directly with individuals and families experiencing multiple barriers to improving their skills and finding work. As such they are well placed to feed into the skills and employment policy area and many are already actively involved in moving their tenants into training and employment, and design, deliver and fund their own programmes to do so.
Given the concentration of unemployment in social housing and the correlation between unemployment and low skills, this report examines several case studies of how housing associations are improving the skills levels of their tenants and the communities they live in.
The first section sets out the link between low skills, high unemployment and low local productivity. It also examines the clustering of low skills and high unemployment in social housing within cities. The second section looks briefly at recent skills policy, highlighting the cluttered nature of the policy area and the need to take a long-term view on policy development. The third section presents case studies on the work housing associations are doing to improve the skills of their residents and move tenants into paid work, drawing out key lessons for wider skills and employment delivery.
Box 1: Primary Urban Area (PUAs) and Key Cities
The analysis in this report looks at the UKs 64 largest cities as defined by PUA, a measure of the built-up areas of a city, rather than individual local authority districts. For the purposes of comparison it also includes the Key Cities, even where these fall out of or overlap with the PUA definition of a city. As such a number of local authorities (LAs) are included in the definition of more than one city, as set out below:
- The cities of Middlesbrough and Tees Valley both include the LAs of Middlesbrough, Redcar and Cleveland and Stockton-on-Tees. Tees Valley additionally covers Darlington and Hartlepool.
- Wolverhampton is included both as a Key City on its own, and in the definition of Birmingham’s PUA.
- The Key City of Kirklees is equivalent to the PUA of Huddersfield, and is presented as Huddersfield.