City of London Economic Research

Social mobility and measuring success

 

By Robert Clear, Researcher in the City of London Research Team

 

In discussions about prosperity there is an increasing focus on social mobility, particularly on the career barriers faced by workers from disadvantaged backgrounds. It’s still the case that recruitment by many large, high-profile firms is slanted towards those who are privately educated and attended the most selective universities (for example, 40% of City employees went to a private school, compared to 13% in London and 7% in the UK as a whole).

Some firms, however, are taking steps to be more socially inclusive in their hiring and work practices. To encourage this, and to acknowledge the progress many organisations have made, the Social Mobility Foundation and the Social Mobility Commission, in partnership with the City of London Corporation, have published an index of the top 50 employers who have taken the most action to improve social mobility in the workplace. This assesses participants across a range of areas, including work with young people, recruitment, selection and progression.[1] Currently only 66% do not set social mobility targets, and the aim of project is to encourage employers to share their initiatives, as well as to highlight which companies and sectors are making progress.

Part of the research carried out for the Index looks at how companies measure their inclusiveness. It was found that, amongst the firms who submitted themselves for consideration, many now ask employees about their social background. This is important because it can provide evidence about indicators of social disadvantage, and can be used to determine how successful employers are at broadening their reach. Among those companies that participated in the index:

·         41% ask the type of school attended ·         26% ask if an employee received free school meals ·         39% ask if employees were the first in their family to go to university ·         7% ask about parental occupation ·         11% ask about the postcode where an employee grew up

 

It’s known that employers find the complexity of measuring social mobility challenging, and that firms make different decisions about what kinds of information to look for. There is a need then, not only to encourage firms to seek information to measure their efforts at promoting inclusiveness, but to do so in a way that is comprehensive and can be used to make comparisons across industries.

The Index is the first of its kind in the UK, and its launch last month was widely publicised (it was recognised as campaign of the month by the Government Communication Service). It’s hoped that the annual publication will encourage good practice in promoting social mobility, bolstering expectations that companies will search for employees from a wider range of backgrounds and seek effective ways of measuring the diversity of their workforce.

 

 [1] The index is drawn from a cohort of nearly 100 employers across 17 sectors.

 

 

 

Exploring non-graduate routes into employment

Saif Ullah

 

How easy is it nowadays for early school leavers to gain employment? With graduates now taking up an increasing proportion of the UK workforce, it has seemingly become more difficult for people that leave education after their GCSEs and A-Levels to get on the job ladder, despite this non-graduate group making up a large majority (40%) of the workforce.[1]     

The pathways to employment for this relatively unexplored group are looked at in more detail in the Resolution Foundation’s most recent report, Finding your routes: non-graduate pathways in the UK’s labour market.

The research provides some useful insights. Utilising data from the Labour Force Survey and British Household Panel Survey, the analysis adds further weight to the evidence that higher qualifications bring greater earnings for non-graduates. However, while academic qualifications for non-graduates are generally valued more highly by employers than vocational ones, in traditionally vocational sectors such as construction and manufacturing, vocational qualifications typically yield a higher return.

The report also illustrates the ongoing impact of the recession on young ‘mid-skilled’ non-graduates, whose careers have stalled as a result of more graduates taking typical non-graduate work opportunities.

Given these growing difficulties experienced by non-graduates in trying to find their way into employment, the research poses important questions about the potential value of apprenticeships. With the Government targeting the creation of three million new apprenticeships by 2020, could this pathway present a more viable route into employment outside of university education?

Apprenticeships are becoming more commonplace within “white collar” sectors than previously. A wider range of employers are increasing the breadth of apprenticeships that they offer, which in turn has led to increased take up of advanced (Level 3 – equivalent to 2 A-levels) and higher/degree (Level 4, 5, 6 & 7 – equivalent to HNC through to Master’s Degree) apprenticeships. Across all ages, the number of advanced level apprenticeship starts rose by over 25% to 181,800 between 2013/14 to 2014/15, while during the same period the number of higher level apprenticeships more than doubled to 19,800.[2]  

However, apprenticeships still remain relatively uncommon within sectors such as finance, professional services and insurance. In London only 8% of firms employed apprenticeships in 2014, compared to the national average of 11%.

From April 2017, employers with an annual pay bill of over £3 million will have to pay an Apprenticeship Levy of 0.5% to HMRC, which will be used to fund apprenticeships for all companies across England. This new scheme may incentivise more industries to explore the apprenticeship route for employment, particularly given the additional subsidies received from Government.

The success of such reforms to the apprenticeship system, however, will depend on making sure that the quality of training and education provided is sufficient to meet the needs of a wider range of companies. A coordinated approach to developing sector wide standards, involving government, industry, training providers and universities, may help raise the level of apprenticeships and provide more rewarding long-term opportunities for non-graduates, as well as creating a viable alternative to employment away from university education.     

 

 

[1] Resolution Foundation (2016), Finding your routes: non-graduate pathways in the UK’s labour market

[2] See gov.uk FE data library: apprenticeships

 

London is a strong national financial centre for social impact investment – but why is social impact measurement ‘red’ for the capital?

By Emily Khan, UK Social Investment and Enterprise team, PwC

The nature of the challenge

Our recent research, commissioned by the City of London Corporation, considered the essential features that would make London a global financial centre for social impact investment (SII).  A number of these features are common to other financial markets – such as skills and expertise, innovation in products and instruments, and international connections. However one in particular –‘social impact standards and reporting’ – stands out as unique to the SII market.  This is illustrated in the diagram below, which reflects a RAG analysis of London’s current position, assessed against six essential features of a global financial centre for SII. For social impact investors, social impact forms the second “currency” that, alongside financial returns, constitutes the basis of their investment decisions.  It also stands out as the one feature where concerns were most consistently expressed by those we consulted – 24 global impact investors – specifically, the lack of standardisation in the way that social impacts are measured and reported was seen as restraining SII market growth, in London and elsewhere.  This view is supported by other research, such as the 2015 JP Morgan and GIIN ‘Eyes on the Horizon’ investor survey. 

What does this mean in practice?

The red rating given to SII standards and reporting for London is not all bad news, however.  Indeed much progress has already been made in this area, for instance via the Inspiring Impact programme, which works with the charity sector to improve impact measurement practices.  For many, the rating is simply a reflection of the scale and size of the challenge.  Unlike ‘green’ markets, where measures of impact are generally more consistent, and where market standards – such as the approach to carbon ‘footprinting’ – have readily been adopted by the market, social issues are by their nature more complex, variable and wide-ranging.  It is not surprising therefore that methods and measures are variable and inconsistent.  Lastly, most of those we consulted felt that this is a feature that no one global financial centre can address alone and that, whilst it is an issue in and for the SII market in London, it is not a challenge that London alone can solve. It is one that requires global collaboration.

How can we address this challenge?

Waiting for the market to generate a body of evidence and reach agreement on standards could arguably mean missing many of the opportunities that are available for growing the SII market globally.  Finding ‘quick wins’ or ways of overcoming this challenge in the short term becomes of special importance when looking at attracting new groups of social investors.  There are an increasing number of examples where investors can take sufficient confidence from the mission and goals, structures and processes of an organisation that impacts will be delivered. Arguably then, adopting global accreditation standards – that focus on potential and commitment to deliver impact – are a good place to focus in the short term, whilst the market solves the knottier, long term challenge of standardising social impact measurement.

In France, the ‘Solidarity Investment Funds’ demonstrate how an accepted social impact accreditation – or certification of the social impact of a fund or enterprise – can be a powerful way of unlocking new supplies of investment capital.  In that case between 5% and 10% of employee savings schemes assets must be invested into unlisted ‘solidarity designed’ organisations, provided at least a third of their staff is comprised of workers who are employed as part of a work integration programme. There are signs of similar progress elsewhere, and indeed that this practice is already emerging in London– such as by the Social Stock Exchange, or B Lab’s recent UK launch of the B-Corporation Certification model. 

The red rating in our research therefore reflects the distance left to travel before standards for social impact measurement and reporting are fully embedded in the market in London. However, it also highlights the opportunity and need to think creatively about the problem in the short term and the fact that London can gain by drawing on international precedents in this area.

Download ‘Developing a global financial centre for social impact investment’

The challenge of meeting the healthcare needs of City workers

By Jacqui Banerjee, Director, BDRC Continental

The challenge of keeping healthy 

Juggling work responsibilities can be tricky, and we can all find it difficult to fit in those extracurricular activities which involve looking after ourselves.  

Often the only time we have to care for our health is outside work, which can be difficult if work is very demanding or working hours extend beyond the traditional ‘nine to five’ day.  It can also be quite difficult to make an appointment to see a GP near to your home if for most of the working week you’re at work. 

All public health authorities face the challenge of ensuring there is adequate healthcare provision for workers.  For the City of London Corporation and the NHS City and Hackney, this is a particular challenge given the relatively small resident population (around 9,000) and the notably larger daytime working population (392,400 in employment) in the City.  Clearly, meeting the healthcare needs of City workers can be a challenge.

Healthcare provision for workers in the City

Download the full report from the City of London's website

The City of London Corporation commissioned BDRC Continental to undertake research to identify and ‘map’ what current healthcare provision looks like in the City and where potential gaps might lie in meeting City workers’ needs in the future. Following telephone surveys with healthcare providers in and around the City, and face-to-face surveys with City workers, our research identifies 332 public and private providers of ‘core’ healthcare services in and around the City, covering a range of services from vaccinations to sexual health services:

blood tests	43
and travel vaccinations	70
GP medical appointments	156
physiotherapy/osteopathy/chiropractors	168
mental healthcare support	75
occupational health services	55
support services for smoking cessation, alcohol or drug addiction	76
sexual health services	65

Two thirds of these healthcare services are open beyond the 9.00 to 18.00 working day.

However, the research also finds that that three in five (59%) City workers without private healthcare provision have had at least one occasion in the last two years where they wanted to use a healthcare service but were unable to do so.  One third of those with private healthcare provision also found this an issue. Why is this?  The main reasons given were a lack of available appointments, inability to find appointments near work, services near work being too busy or having to wait too many days for an appointment.

Evidently, despite the range of healthcare services identified, there are a proportion of City workers who feel that their healthcare needs are not being met.  There is some scope therefore for greater healthcare service provision during times which are convenient for workers to attend appointments, with an emphasis on early start of day, lunchtime and end of the day appointments. 

City workers’ perception that their needs are not being met may also, in part, be due to a lack of awareness of the services available services.  

This research goes some way to addressing this. Our report includes an online directory of the 322 healthcare service providers in and around the City to help inform City workers and healthcare providers what current healthcare service provision looks like. 

 ‘Mapping Public and Private Healthcare Provision in the City’ by BDRC Continental was published in February 2015. The report is available to download from the City of London Corporation’s Research webpage.

Deprivation in London

By Sabrina Basran, Research Officer, City of London Corporation

‘Deprivation’ refers to the damaging lack of material benefits considered to be basic necessities in a society and is therefore a relative measure of wellbeing that can be assessed across a range of indicators.

A secondary research briefing paper published recently by the City of London Corporation explores deprivation in London through a review of official data sources and statistics such as those provided by the ONS and GLA.

A mixed picture in London

London is relatively affluent compared to UK regions and performs well across a number of measures of deprivation such as educational attainment, employment and life expectancy. However, London still experiences high levels of deprivation across the region by other measures.

• London has a higher rate of both primary and secondary pupils at state schools receiving free school meals than the average in England. For example the proportion of secondary school pupils claiming is 23.1% in London, compared to 15.7% in England overall.
• In all 32 London boroughs, fewer than 10% of available properties are affordable to a single person on average wages.
• London has the highest rate of child poverty of any English region - 37% of children in the capital are living below the poverty line. However, child poverty rates in London have fallen over the last ten years.
• More than 1 in 10 households (11.3%) in London are overcrowded according to 2011 Census data.
• The number of people sleeping rough for any one night in London has more than doubled over six years, and risen by almost a quarter in a year.

Deprivation is not equally distributed across London

There exist in some geographic areas ‘pockets’ of high deprivation, with some boroughs being notably worse off than others, and a number having areas of affluence alongside areas of deprivation within their boundaries.

The most recent Index of Multiple Deprivation (IMD 2010) highlights that spatially many of the inner London boroughs, particularly towards the north-east, east and southern parts of London, are within the 20% most deprived Super Output Areas across England.

Inner London overall tends to perform poorly across a number of indicators of deprivation when compared to outer London. For example:

• According to the 2010 IMD, Tower Hamlets, Hackney and Newham are the three most deprived local authorities in London.
• Islington has the highest proportion of pupils eligible for and claiming free school meals at nursery and primary school level, at around double the London average. 
• Southwark has the highest proportion of workless households of all the London boroughs.
• Outer London has around double the proportion of home ownership than inner London.

This is not to ignore the concentration of deprivation in other outer London boroughs: Barking and Dagenham, Brent and Greenwich for example, perform worst on some measures out of all the boroughs, including those in inner London.

What about changes over time?

The data presented in the paper suggests that there have been improvements in the performance of both inner and outer London against deprivation indicators over time.

Some suggest that there has been a shift in the spatial distribution of deprivation, with the outer London boroughs now performing worse than those in inner London. However looking at data, the baseline case remains that inner London overall and in absolute terms, continues to perform badly and compared with outer London.

What does this mean?

From the brief overview of data presented here, it is evident that deprivation is highly complex to understand and measure. It is also an area that is constantly evolving. This paper seeks to present to readers some of the key matters for consideration.

‘Deprivation in London: secondary research briefing paper’ was published in January 2015. The paper is available to download from the City of London Corporation’s Research webpage.

Tackling Grand Corruption – is it being recognised as a serious crime?

By Nick Maxwell, Research Manager, Transparency International UK

It certainly is.

The money laundering risks for the UK arising from grand corruption on a global scale are considerable. In 2011, the UN Office for Drugs and Crime estimated that only 1% of illicit money flows around the world are likely to be detected. While the UK is a good performer relative to other nations, the struggle to effectively tackle the scale of the crime is being felt globally.

The Government’s new Serious Crime Bill, which will have its Second Reading on Monday 16th June, is a very welcome step in the right direction to improve the situation. The Bill addresses at least three of the gaps that Transparency International UK identified in UK legislation which have limited the ability to tackle corrupt capital flows to date.

First, the Serious Crime Bill creates a new offence of participation in an organised crime group which has been targeted at stopping networks of family members, lawyers and accountants hiding stolen assets. Second, the Bill also honours a commitment in the Serious and Organised Crime Strategy to strengthen legislation by enabling assets to be frozen more quickly and earlier in investigations. Third and finally, the Bill should extend Proceeds of Crime Act’s (2002) powers of restraint beyond cash to other realisable cash or cash-like instruments or products, for example share accounts, pension accounts or even, “bitcoins”.

These are positive developments. However, the Bill does not enable the rapid freezing of assets to the same extent as Switzerland and Canada, both of which imposed sanctions following the Ukraine Crisis much more quickly than the UK. It also does not extend the period to refuse consent for a suspicious transaction, as for example, Guernsey has. The Bill does not create an illicit enrichment offence in the UK, such as exists in 44 other nations, which would put the onus on owners of assets flagged as suspicious to explain legitimate sources of wealth. Finally, it doesn’t stop those accused of grand corruption exhausting suspect assets on their own legal fees, like Australia has clamped down on.

While the Bill is a welcome step, it is clear that there is still much more to be done.

This blog post was authored by Nick Maxwell, Research Manager at Transparency International UK (TI-UK). For more information on TI-UK’s work to improve the UK’s resilience against the threat of money laundering from grand corruption, please read their detailed submission to HM Treasury and the Home Office.

The City of London Corporation has previously published research into corruption risks in the City, authored by Transparency International UK. The report is available to download from the City of London Economic Research webpage.

 

 

 

London is primed to lead the way in cultural innovation

by Toby Kress and Peter Tullin, Culture Label authors of Cultural innovation and entrepreneurship in London

The UK, and particularly London, has experienced a ‘golden age’ in  arts and culture over the last decade. While public subsidy has declined in recent years, this has been offset by record investment in cultural infrastructure over the last twenty years. This has helped boost audience numbers and attendance for the arts and spawned a series of cultural ‘mega’ brands with multi-faceted income streams. Increased consumer demand means cultural institutions now have to cater to audiences which are global in nature and increasingly, expand their offer to be ‘multichannel’ (i.e. experienced in more than one way). For example the British Museum’s  live broadcast exhibition, Pompeii Live - this grossed £471,000 at the box office, and reached the UK Top 10.

What is driving cultural innovation in London?

 The rise of trends such as  ‘urbanomics’ - business models which focus purely on city consumers - are reshaping the cultural landscape and creative economy in cities.  London is at the forefront of this shift. A concentration of affluent urban consumers hunting for the latest alternative cultural experiences and seeking to escape the uniform offer of clone high streets and copy-cat brands has led to a surge in new creative enterprises such as Punchdrunk, Spectators’ Guild, Ginger Line, The Art of Dining and Secret Cinema.

In addition, the digital revolution has enabled the birth of a growing number of culture start-ups which challenge traditional business models. By intersecting with the technology sector, cultural institutions are increasingly offering up exciting new ways for cultural content to be created and distributed. This is increasingly evident in London – which was ranked first of 30 global cities for ‘technology readiness’ and second for ‘intellectual capital and innovation’ in PWC’s Cities of Opportunity, released earlier this week.

 The proximity of London’s technology district to the east, ‘Tech City’, to the City of London, a leading global finance hub, is also helping to accelerate the development of these innovative approaches, by providing opportunities to access capital and a growing number of international venture capital funds with London outposts. Sedition.com, Retronaut.com and DigitalTheatre.com are just a few of the examples of specific culture start-ups alongside other technology companies such as YPlan that are revolutionising tools the sector can use to grow and develop.

 Collaborating and innovating for growth 

Against this backdrop, our paper looks at how collaboration between different sectors can be fostered to fuel new growth in London’s creative economy, as well as to create resilient business models for arts and culture organisations.

We look at cultural sector innovations in London – such as iCITY, a new digital hub for London being developed on the Olympic Park Site, bringing together arts, technology and start-up organisations. We also consider learning from international examples, such as New INC, a multi-disciplinary lab space for arts and technology collaborations launching this summer at the New Museum in New York, and the new Google Cultural Institute in Paris designed to help the cultural sector co-produce new innovations with one of the world’s leading technology companies.

What next?

 The ‘golden age’ can be sustained, if the cultural and creative industries that make London great and help drive its economy, continue to be brave enough to push boundaries, reinvent themselves and reach out to new collaborators.

 Cultural Innovation and Entrepreneurship is available to download from the City of London’s research webpage. 

New sources of capital for the UK's social investment market

By The Social Investment Consultancy and London Economics

Untapped pools of potential investment capital exist

Our research, 'New Specialist Sources of Capital for the Social Investment Market', commissioned by the Social Investment Research Council, examined the potential for raising new finance for the UK social investment market from institutional investors. It focused on eight investor ‘groups’ which have been under-researched to date: pension funds, insurers, housing associations, charitable organisations, faith-based organisations, university endowments, corporations and family offices.

But hurdles to engagement remain

We found that these institutional investors do have an interest in social investment. However, challenges remain which prevent them from engaging more fully with the market. These include:

• a lack of performance track record for many social funds and organisations;
• lack of awareness of suitable investment opportunities among investors;
• and a need for credible investment advice.

In addition, we found that many of the investors interviewed tended to associate the ‘social investment’ market primarily with its more innovative products. When asked for their impressions of market performance, investors frequently cited social impact bonds as their point of reference – rather than, say, a sustainable forestry fund.  Thinking of social investment only in terms of its more innovative elements linked to the market as a whole being perceived as ‘high risk’ in the minds of investors – despite this not necessarily being the case.

A spectrum of opportunities could encourage new investors

To engage greater support from institutional investors, we identified a need to consider the full range of opportunities the market can offer. It can be helpful to think of the social investment market as a spectrum, with two key sets of investment opportunities at either end.

One opportunity is the need for risk finance investments - estimated at £500m - required to support social sector organisations in coming years. This might also include more innovative products such as social investment bonds.

The alternative, at the other ‘end’ of the market, is a multi-billion pound opportunity to invest in more established social industries, such as social housing, microfinance and clean tech.

Matching opportunities to investors

In considering the needs of institutional investors, our research suggested that investments at the established end of the market are most likely to appeal to institutions that would like to make social investments but are currently put off by what they see as a market dominated by small, risk-equity type deals, rather than the infrastructure projects and bonds that large investors such as pension funds are used to considering.

By contrast, risk finance deals are most likely to appeal to institutions that are more able to take a values-based approach to investing, either through philanthropy portfolios (family offices, charitable endowment funds, corporate CSR funds) or as a means of service delivery (housing associations).

Any attempt to engage institutional investors with social investment needs to reflect the different motivations and limitations of each group, and by extension what types of opportunity are most relevant. Such an appropriately-targeted approach is likely to be more successful than a ‘one size fits all’ approach to engaging new investors. 

Read more

The research report ‘New Specialist Sources of Capital for the Social Investment Market’ is available to download from the City of London’s research webpage. 

Promoting employee health and wellbeing in the City of London

By Lindsey Dugdill, Professor of Public Health & Margaret Coffey, Reader in Public Health, School of Health Sciences, University of Salford

Employers have a duty of care to their employees and in the vast majority of cases are willing to invest in programmes to promote employee health. However, there is often a limited understanding of the nature of effective programmes, which can lead to both time and money being wasted on poorly planned and executed health promotion initiatives.

This research report, commissioned by the City of London Corporation,  sought to answer the following question: “What constitutes best practice in workplace health and what are organisations currently doing about it?”

As the commissioned research team, we – Cavill Associates Ltd and the University of Salford - analysed current evidence of best practice in the international literature and compared this with qualitative interview data from 20 large organisations (250+ employees) operating within the Square Mile. These firms represented the financial, legal, and professional services sectors. 

We found that most of the City firms that we interviewed have well-developed occupational health and employee assistance packages in place; provide ergonomic workstation assessments (including fast-track physiotherapy in some cases); and offer a range of lifestyle-type interventions, for example focusing on physical activity, healthy eating etc.  Though these programmes are largely individually focused, some interviewees also have integrated approaches to promoting health and wellbeing, operating across the organisation, and delivered by health and wellbeing teams.

Mental health was identified as an area of workplace health that most companies interviewed want to develop further - currently, provision for addressing mental health issues is largely at an individually-focused level. However, there are some exemplar organisations which are attempting to address this; for example by putting in place an employee network of ‘mental health champions’. 

The research found that the following types of programmes are considered to be most effective at improving employee health:

• Health promotion/wellness programmes - multi-component programmes covering a range of lifestyle issues (e.g. physical activity, diet, smoking cessation etc.), designed in participation with staff, and supported by senior management;.
• Mental health programmes - cognitive behaviour therapy and moderate short-term interventions targeted at people with an existing diagnosis of depression;
• Back pain and musculoskeletal health - exercise, ergonomic workstation assessment and early intervention through fast-track physiotherapy can all be worth investing in;
• Organisational approaches - holistic embedded organisational approaches to workplace health improvement such as flexible working practices and embedded management culture for health and wellbeing.

The research also provides a number of practical suggestions for companies looking to promote best practice in employee health and wellbeing. These include:

• ‘Needs assessment’ to identify staff needs;
• Integrated approaches to health and wellbeing across organisations, built on staff needs that tackle health problems at the source rather than dealing with the outcomes of poor health;
• Systematic evaluation of all approaches to workplace health promotion so that the evidence base and business case can be improved.

The research report ‘Promoting Best Practice in Employee Health and Wellbeing in the City of London’ is available to download from the City of London’s research webpage. 

Green Spaces: The Benefits for London

London is one of the greenest major cities in the world, with over 35,000 acres of public space. The City of London is proud to be the custodian of almost 11,000 acres of green space in and around London, ranging from Hampstead Heath and Epping Forest to the small gardens of the Square Mile.

In this video blog, David Bentley, from the City of London's Open Spaces department, talks about some of the environmental, health, social and economic benefits that the capital's woodlands, parks and gardens provide, highlighted by a new report Green Spaces: The Benefits for London.

 

The report Green Spaces: The Benefits for London was prepared for the City of London by BOP consulting and is available to download from the City of London's website.