Worklessness in London costs more than £5 billion a year, according to research commissioned by London Councils.

Research undertaken on behalf of the cross party organisation has highlighted that national employment programmes are under-performing in London and that boroughs are in a better position to deliver tailored employment services to meet the needs of the people living in their communities, given the opportunity.

The research, “Counting the cost – a Worklessness Costs Audit for London”, carried out by Inclusion, found there are 1.5 million people out of work in London – around 30 per cent of the working age population.

The report shows that 2,000 more jobs would have been created in London if the national programmes were as effective in London as they are in other parts of the country. This could have saved an estimated £8.7 million a year.

It is important to note that merely improving the operation of a national system would have resulted in these 2,000 jobs. Devolving employment services to boroughs is likely to mean still more jobless people are moved into work.

Boroughs are in close contact with people out of work because they provide a range of other local services. They provide social housing, administer their claims for housing benefit and council tax benefit and provide access to childcare. They also have a local knowledge of the diverse needs of the communities in their area.

The research supports the arguments set out in London Councils’ own Manifesto for Londoners to devolve financial responsibility for helping job seekers into work from central government to the boroughs who can co-ordinate a range of services.

London Councils’ executive member for economic development, Stuart Fraser said: “National employment programmes are less effective in London than elsewhere in the country. This is a serious issue when you consider that almost a third of the working age population are unemployed and the costs of worklessness are so high in London.

“Boroughs are already in contact with people who are out of work, and given more opportunity from Whitehall, councils can provide unemployed people with a whole package of support which is individually tailored to their training, childcare and housing or health issues.

“People who are not in work often face more than one obstacle which must be overcome before they can move into work. It is the boroughs that are best placed to deliver this personalised service.”