Missing potential: why the European funds should be used to support parental employment in London

June 2013

London has the highest child poverty rates in the country, and the lowest rates of mothers employment. This briefing argues that the next round of the European Social Fund from 2014 should be used in London to support parents to access paid work.

London has the most dynamic economy in the country, accounting for 21.6 per cent of the UK’s total output in 2011.  But at present, London is failing to make the best use of the skills of all of its residents. Mothers in particular are losing out, with those in couples having an employment rate 14 percentage points lower than in the rest of the UK, and lone parents a rate that is 9 per cent lower. Over 100,000 fewer mothers are in work in London than would be the case if the capital achieved the UK average maternal employment rate, and London’s low rate of parental employment helps to explain the continued employment gap between the capital and the rest of the UK.

The cost of this lost potential is felt not only in terms of the economy, but in the highest child poverty rates in the country. Both lone parent and couple families in which mothers don’t work face significantly higher risks of poverty than those in which they do, and there are more poor children living in London than in Scotland and Wales put together.

Yet despite the clear gap in maternal employment between London and the rest of the country, at present, parents are not the target group for any mainstream employment scheme, and many parents, including many parents in couples, lack access to any support at all.  Together with the high costs of childcare, this lack of support is holding London’s parents back.

The European Social Fund in 2014-20 offers a critical opportunity to invest in London’s development, London’s parents, and the future of their children. This paper argues that, in setting priorities for how European money is spent in London, the GLA, Local Authorities and London’s Enterprise Panel, should put parents at the centre of their strategies.