When politicians, policymakers and economists discuss the levers of productivity, the conversation defaults quickly to technology, investment and infrastructure. These are the visible components of growth – the things that appear in forecasts, plans and business strategies. What rarely features in those conversations is the more fundamental question that underpins all of them: who actually gets to participate in the economy, and what stops those who currently don’t?
Participation is often treated as a peripheral issue, a soft metric overshadowed by hard economic data. Yet it is the inescapable precondition for all that follows. Before skills can be deployed, before technology can be adopted, before investment can generate returns, people must first feel able to show up.
Across London, a significant proportion of the working-age population currently cannot, or do not, participate. Closing that gap is not just a social priority. It is the most direct route to the economic growth that the capital, and therefore the country, urgently needs.
The scale of the productivity problem
The UK’s productivity challenge is well-documented and stubbornly persistent. Since the 2008 financial crisis, growth in output per hour worked has been significantly slower than in the previous decades – a phenomenon economists have termed the ‘productivity puzzle’. The Productivity Institute calculates that productivity growth over the next twelve years would need to double compared to the previous twelve simply to maintain the current pace of improvement in average living standards.
In early 2024, 9.4 million people aged 16 to 64 were economically inactive across the UK, which equates to 22.2% of the working-age population
Office for National Statistics (ONS)
London remains the engine of the national economy, accounting for 39% of overall UK GVA in 2023, a share forecast to rise further. But even London cannot insulate itself from the structural drag created by mass economic inactivity. In early 2024, 9.4 million people aged 16 to 64 were economically inactive across the UK, which equates to 22.2% of the working-age population – the highest level since 2012, and 850,000 more than before the COVID-19 pandemic. The government’s own analysis is stark: OBR analysis has suggested that half a million more people participating in the labour market would lower borrowing by £18.7 billion by 2027/28.
These are not people who have opted out of productive life by choice. Most face barriers, such as health concerns, confidence, caring responsibility or opportunity, which the conventional employment support system is poorly equipped to address. Lifelong learning however, delivered locally and accessibly, is one of the few interventions with a proven track record of moving people across that threshold.
Confidence is an economic variable
The most under appreciated barrier to participation is not skills, qualifications or geography. It is confidence. The belief that one has something to offer, and that the world of work has a place for it.
For the long-term unemployed, for those returning after illness or caring responsibilities, for older workers who have been made to feel that their experience has passed its sell-by date, the distance between inactivity and employment is not primarily measured in skills gaps. It is measured in self-belief, which in turn, is built by ‘doing’ – by learning, by connecting with others, by discovering that you are more capable than you thought.
The London Learner Survey, which tracks outcomes for adults accessing Mayor-funded adult skills programmes, found that over half of learners – equivalent to around 100,000 people – experienced positive economic changes five to eight months after completing their respective courses. These individuals were, before enrolling, on the margins or outside the labour market. The course they participated in was not a direct employment programme. It was a learning experience that helped to rebuild their confidence and belief in their capability.
Between August 2023 and July 2024, over 223,000 Londoners accessed life-changing lifelong learning through Mayoral-funded Adult Skills programmes, with the majority coming from Black, Asian and minority ethnic backgrounds, and nearly half identifying as having a disability or health condition. These are precisely the groups whose participation the economy most needs – and most consistently fails to support.
Skills, participation and the growth dividend
The economic relationship between learning and productivity is not primarily a story about degrees and higher education. It is a story about foundational capability built on confidence – the practical, transferable skills that determine whether someone can enter, re-enter or advance in the labour market at all.
Take digital skills. The government estimates that the digital skills gap costs the UK economy £63 billion per year in lost productivity, yet 7.5 million adults – 18% of the working-age population – currently lack the essential digital skills needed for the modern workplace. Closing even the essential digital skills gap alone, according to FutureDotNow research, could generate an annual uplift of £23 billion in Gross Value Added to the UK economy. Basic digital literacy: how to communicate online, handle information, transact safely, and navigate the tools that virtually every employer now relies on, is precisely the kind of provision that London’s lifelong learning providers offer their communities.
The same logic applies to English language proficiency and maths functional skills. The Bell Foundation estimates that over one in every 50 people of working age in the UK could access better work and greater economic contribution simply by developing their English language skills. ESOL provision can be the key that unlocks the professional experience, qualifications and capability that many Londoners already possess but cannot deploy because the language barrier stands between them and the labour market. Similarly, workers who lack baseline numeracy and literacy are consistently less able to progress, to adapt to changing roles, or to take on supervisory responsibilities that drive business output.
These are not marginal interventions. They are the foundation on which confident careers are built and economies are grown.
London’s boroughs as economic infrastructure
It is common to think of lifelong learning providers as part of the education system. They are also, and perhaps more importantly, part of the economic infrastructure.
When a London lifelong learning provider helps a long-term carer back into employment, it generates economic activity: tax receipts rise, benefit dependency falls, and a skilled individual contributes to an employer’s output. When it supports a migrant professional to have their qualifications recognised, it adds productive capacity to a city that is simultaneously running a skills shortage in sectors from construction to healthcare. When it gives an older worker the digital confidence to return to the labour market, it extends the productive life of someone with years of valuable experience.
One pilot programme supporting economically inactive people back into work calculated a return of £70 million in economic benefits – including £28 million in reduced benefit payments – from an initial investment of £10 million. That is a sevenfold return. The economics of participation are not ambiguous.
Lifelong learning providers are not operating at the margins of this picture. They are at its core. Every learner who crosses the threshold of a learning centre and emerges with renewed confidence and capability is a contribution to the city’s productive capacity – one that a technology investment or fiscal policy is hard pushed to replicate, because it begins with a person deciding they have something to offer. That decision does not happen in a vacuum. It happens because someone created a space, and kept the door open.
The missing link in the productivity puzzle
The argument here is not that lifelong learning should replace the economic strategies that governments pursue. It is that those strategies cannot deliver what they promise without it.
London’s sluggish growth will not be jolted by bureaucratic mandates or fiscal policies alone. True economic revitalisation requires human capital – specifically, the hundreds of thousands of Londoners who currently find themselves sidelined, underemployed, or simply lacking the confidence to navigate the modern workforce. Cultivating an environment where these individuals are equipped to contribute is therefore a fundamental economic imperative.
Across the city’s boroughs, a quiet infrastructure of lifelong learning providers is already laying this groundwork. They serve as critical access points where confidence is restored, skills are updated, and robust participation – in the workplace, in learning, and in the community – becomes viable once more. Crucially, they are delivering these results with striking cost-efficiency, yielding outcomes that a growing body of evidence consistently bears out.
