London stagnates on social mobility

02 March 2020 Consultancy.uk

Proportionally, London hosts fewer opportunities for people of working class backgrounds than any other region of England, a new report suggests. According to the study, fewer than a fifth of individuals in the capital’s professional occupations are from outside wealthy and middle-class socio‑economic backgrounds – suggesting the city is notably lagging behind the rest of England in terms of social mobility.

Evidence suggests that should British businesses attain even average levels of social mobility, the economy would be boosted by around £170 billion in total, or £2,620 per person each year. Despite this major potential, however, change among the UK’s top businesses has been slow. While an increasing number of employers set mobility targets, research by the Social Mobility Foundation in 2017 found that 61% of all successful applicants to companies polled attended one of the country’s 24 most selective universities.

The failure to address social mobility has become especially pronounced in the professional services and financial sectors, where organisations continuously bemoan an alleged ‘talent shortage’ in the UK. The idea that there simply are not enough individuals capable of filling new roles in professionalised industries is increasingly absurd, when considering data from the Office for National Statistics suggesting only 54% of graduates aged 22 to 29 had a graduate job. Meanwhile, 28% of all graduates in England work jobs which do not require a degree, according to a report by the Organisation for Economic Co-operation and Development.

Proportion of individuals from different socio‑economic backgrounds in a professional occupation, by region worked in 2017

Quite how there could be a ‘skills shortage’ when this is the case seems impossible to fathom, however new research – from independent charity The Mayor’s Fund for London and leading global management consultancy Oliver Wyman – has suggested that England’s biggest city is utterly failing to improve its social mobility levels. This means that despite academic success, young Londoners from low income backgrounds remain “locked out” of top careers.

According to the researchers, of those working in London’s professional occupations, only 17% come from working class backgrounds. Meanwhile, professional occupations in London continue to employ a disproportionate number of workers from high income backgrounds, at 54%. The polarised job market also presents limited opportunity for jobs in the middle of the career ladder, though this is still a marked improvement on the opportunities for working class people, sitting at 29%.

Social mobility was more present in other regions of England, but not by much. The South East of England is largely dependent on London’s nearby economy, so its social mobility figures were relatively similar. The North West and North East seemed to benefit from the booming tech scenes of the Northern Powerhouse initiative, as they provided significantly more opportunities for those of a working class background – at 37% and 35% each – as did the West Midlands, at 35%.

London’s higher quality jobs are concentrated in its core

However, every locale presented more than 40% of its roles in professional occupation to people already from that background. This disproportionate propensity for professional industries to hire people of a similar background seems to illustrate just why professionals believe there is a ‘skills shortage’ – leading the researchers to suggest, “Clearly, the path between educational achievement and meaningful job outcomes is broken.”

Old boy’s club

Focusing again on London, the report found that proportionally the number of jobs per resident are also concentrated in a tiny part of London. The City and Westminster saw the largest number of jobs per resident in the capital, jobs which generally are largely professionalised in the finance, professional services and government segments.

On top of the city stagnating in terms of social mobility, this is also seeing London suffering an increasing poverty problem. The issue is seen most explicitly in the outer boroughs, where there has been an 88% increase in the proportion of people working for wages below the living wage in outer London since 2008, compared to 44% in the inner boroughs. As a result, it is becoming near-impossible for people from working class backgrounds to live and work in London – as the jobs needed to make ends meet exist in a concentrated area, and statistically are unlikely to employ people of differing socio-economic backgrounds.

To tackle the “broken ladder” of social mobility, the researchers proposed a system overhaul and calls for a better-co-ordinated approach to create a ‘cradle to career’ pathway, which would include better use of data to direct support and funding decisions. It also emphasised the need for corporate London to provide more employability support in outer London boroughs, helping businesses adapt both their hiring and staff development policies, and increasing mentorship and role model schemes.

Launching the report, Kirsty McHugh, Chief Executive, Mayor’s Fund for London, said, “Contrary to popular belief, social mobility in London is not sorted. Young Londoners face a unique set of challenges which are often overlooked by national datasets. However, we are a rich city. We can and must do better to support London businesses, charities and public sector create a more co-ordinated ‘cradle to career’ system where young people do not struggle to access jobs that help them live fulfilling lives.”


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