The link between affordable housing, skills attainment, and 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.

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.

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.