Labour market analysis from leading prison education provider Novus shows that job growth in London is outpacing both national trends and population increases, leaving the capital struggling to deliver the skilled labour its expanding economy requires

New labour market analysis conducted by Novus has projected that an increase in job roles needed in London will outpace the working age population, putting the capital’s economic growth at risk.

The analysis shows that London experienced a remarkable 14.1% growth in jobs between 2018 and 2023, with 728,547 new positions created. This increase far outstripped the national growth rate of 6.4%. This growth is projected to continue over the next five years with an additional 363,811 jobs expected to be added to the city’s already thriving economy.

However, while London’s population is also expected to grow—rising by 153,746 people to 9,342,064 by 2028—the anticipated job growth will far exceed the increase in population. This gap could leave employers struggling to fill critical roles, especially in high-demand sectors such as Information and Communication, Accommodation and Food Service Activities and Transportation and Storage.

Despite its robust economy, London faces challenges in preparing its workforce to meet the demands of its top industries. Although the city boasts a highly educated population, with 50% holding a degree or equivalent (17% higher than the national average), only 1% of Londoners hold a trade apprenticeship, and 6% have no qualifications.

Following this analysis leading prison education provider Novus, which provides education and training in prisons in London and across England and Wales, has highlighted the potential for employers to recruit more prison-leavers to meet the growing skills gaps. At present, more than 10,000 people are serving sentences in London’s prisons. Tapping into this underutilised pipeline of skilled workers could provide a significant boost to the city’s economy.

Peter Cox, Managing Director of Novus, commented: “London’s job market is growing at an impressive rate, presenting significant opportunities for economic success. However, this growth is not without challenges and the capital must ensure that its workforce is equipped to meet the needs of its most rapidly expanding industries, particularly as job growth outpaces population increases.”

London’s workforce is well-positioned to adapt, with 76% of the population under the age of 54 and a strong representation of millennials. However, sectors like Transportation and Storage and Administrative and Support Service Activities —which rank high in economic output but lower in employment concentration—highlight the urgent need for targeted skills development and workforce planning.

Cox continued: “Novus works with people who are in custody and are the furthest from the labour market but have the potential to be rehabilitated by acquiring the skills required to secure stable employment upon completion of their sentence.

“With the challenges that London’s labour market is likely to encounter in the next five years, the region’s political leaders must ensure that that the provision of prison education programmes is aligned to the regional economy, which reduce reoffending and support offenders to gain skills, is not overlooked.

“This will require integration and collaboration between prison education programmes and local skills improvement plans to ensure that as many employers as possible are able to recruit the skilled workers that they will require to drive economic success.”

In a recent survey commissioned by Novus, 55% of voters in the UK said that prisons should focus on rehabilitation more than punishment, with 60% of respondents saying that educating prisoners and developing their skills is a good way to use taxpayers’ money.

However, when told that reoffending costs the economy £18 billion every year according to Ministry of Justice data and that education is proven to reduce reoffending by 7.5 percentage points, support for educating prisoners and developing their skills increased to 68%.

Cox concluded: “London’s remarkable growth trajectory underscores the need for strategic planning to bridge the gap between job creation and workforce readiness. This must include a strategy for connecting those furthest from the jobs market, such as those currently in custody, with the skills that will enable them to secure employment and meet the needs of the economy. As the city looks to the future, its ability to adapt and innovate will be key to unlocking the full potential of its labour market.”