The link between affordable housing, skills attainment, and job creation

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After COVID-19, the labour market is likely to undergo a period of fluidity and rapid transformation. Changes will arise in the availability of jobs, but also in the nature of work in certain sectors. For example, an increased emphasis on working from home may lead to greater demand for digital skills, while post-lockdown trends may place a premium on customer-service and ‘people’ skills. Some proposals for recovery programmes include efforts to stimulate specific sectors in a local economy (such as those associated with the ‘green’ economy). If the economic challenges of COVID-19 are not to create further inequality, any such developments must be accompanied by effective measures to make sure that jobs and training are widely accessible, in particular to communities whose risk of exclusion has been increased during the pandemic.

New skills demands may emerge rapidly, with a need for agility in the provision of opportunities to learn, and of access to these. Similarly, the flexibility in labour markets offered by sufficient affordable housing will be even more important, especially for people who have suffered hardship during the lockdown period.

Case studies

Key lessons

- Economic change arising from COVID-19 will worsen inequalities and must be mitigated by local areas as best they can through inclusive intervention

- Job quality is a core component of more inclusive economies and local authorities can influence job quality in their local economy as major employers, procurers of goods and services, and work-ing in partnership.

 - Skills are also a key part, and the most effective skills policy involves linking skills programmes directly to specific work opportunities, and where engagement is proactively encouraged.

 - The role of affordable housing is increasingly being considered within the remit of building more inclusive economies—particularly in relation to essential workers who are often paid less well despite their importance.

Job creation

The nature of the jobs market is an important aspect of whether or not economies can be considered inclusive. The ‘good work’ agenda is increasingly prominent for local authorities and features include pay rates that are sufficient to sustain a household income, security of contract and hours, safe and healthy working conditions, and other aspects of ‘fairness’ at work.

Job creation in particular sectors and occupations can also be especially effective for inclusive growth, and initiatives to increase employment should target both ‘high tech, high skill, high productivity’ sectors and those which offer opportunities for more people to participate in good quality work.

Councils and regional ‘anchor institutions’ can play an important role in improving work quality as they are major employers, and by providing good quality work can both act as exemplars and make a difference for their workers. In addition, they can incentivise good practice by employers from whom they procure goods and services, and within their own supply chains. Working in partnership, councils and combined authorities have used instruments as ‘Work Charters’ to define ‘good jobs’ and to encourage employers to follow the associated guidelines. This has potential benefits for both businesses and workers themselves, as an increasing body of evidence suggests that there is a relationship between work quality and productivity.

Skills creation

To access opportunities in the labour market, people need appropriate skills and (in many cases) qualifications. The need for skills provision that closely matches employer need is well-established, and many local areas have developed extensive policy frameworks and partnerships to support this.

However, simply demonstrating the link between skills improvements and increases in earnings is not sufficient to encourage widespread engagement in learning among adults. In particular, those at greatest risk of economic exclusion may be especially likely to miss out, in the absence of proactive measures to boost participation. Effective policy therefore includes strategic interventions that link skills development to specific work opportunities, and that make learning financially and practically accessible for the people who are most in need of skills gains and enhanced employability.

A further priority is the link between skills supply and demand within the labour market. Initiatives that address only one side of this equation have only limited impacts, but strategic links between the two can prove transformative in regions where economic inequality has arisen over time. Key features of effective policy include:

- Leadership, especially focussed on generating more and better jobs.

- Place-based approaches that adapt and tailor policy to the needs of local areas.

- Integration of economic and workforce development initiatives from a demand-side perspective, focussing on sectors that can support inclusive growth locally.

- Private and public sector employer engagement and partnership.

- Autonomy for local partners to design and adapt national programmes to local needs.

- Good quality data collection, monitoring and evaluation to boost learning from programmes.

Affordable housing

Earnings alone cannot support inclusive growth if the costs of living close to employment opportunities are prohibitive. In England, local authorities are increasingly aware of the barriers that residents face in accessing the housing market, and finding affordable homes to rent or buy. In fact, rapid economic growth in an area can exacerbate inequalities where buoyant housing markets lead to price inflation because formerly accessible areas are now outside the means of many workers.  

Many councils, of course, pursue policies on affordable housing as part of their ‘core’ work. But in some regions, there is an increasing interest in the link between housing costs and inclusive growth. For example, in one area the local living wage policy is explicitly linked to high housing costs and issues with housing affordability, which are driven by highly specific features of the local economy and commuting patterns.