LDDC Monograph
Employment: New Jobs and Opportunities (Feb 1998)
 
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Contents

Foreword
The LDDC'S Remit - Introduction and Background
The Wider Economic Context
The Emergence of an Employment Strategy
The Role of the Docklands Business and Research Centre and the Docklands Business Club
Employment and Jobs - Initial Outcomes
Training for Jobs in Docklands

 

Continued...

The House of Commons Employment Committee 1987-88
Employment and Enterprise
Final Outcomes and Conclusions
Tables
Acknowledgements

Other Monographs - in this series
Completion Booklets
Popular Press Releases
Annual Reports and Accounts

 
 

(Note: This Monograph has been reproduced by kind permission of the Commission for the New Towns now known as English Partnerships. It is published for general interest and research purposes only and may not be reproduced for other purposes except with the permission of English Partnerships who now hold the copyright of LDDC publications)

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ForewordMeat Porter

The closure of the upper docks by the Port of London Authority with the resultant decline of traditional port related activities in East London, provided a particular challenge to the London Docklands Development Corporation. On embarking on its task of regenerating London Docklands, the Corporation found an immense economic void which had to be filled with new economic activities.

Key therefore to the success of regeneration was the need to provide a new and sound economic structure for the area, to attract new business sectors and thereby create new employment opportunities.

This monograph, one in a series published by the Corporation in its final year of operation, describes the Corporation's approach to what, with hindsight, has proved to be a highly complex process. It has involved many partners engaged in training and employment provision. Nevertheless, it has produced highly successful outcomes as measured in terms of new jobs, new skills and new investment. Perhaps, most important of all, it has provided Docklands with a solid future. It has enabled the area to, once again, play a full and dynamic part in contributing to London's economy.

LDDC
February 1998

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The LDDC'S Remit - Introduction and BackgroundDaily Mirror's news desk

When in July 1981 the London Docklands Development Corporation (LDDC) commenced its work of regenerating London Docklands, it found just 1,000 mostly small companies left behind following the dock closures of the 1960s and 1970s. These were the remnants of the industrial sectors which had once dominated economic activities in the area and which had contributed so much to the wealth of the region. In all, these surviving companies employed just over 27,000 workers.

To some observers the Corporation at its inception was not particularly well-equipped to handle employment matters indeed, as late as February 1988, A.J. Butler, Director of the Inner Cities Directorate at the Department of the Environment (DoE) (the Corporation's sponsoring department), in giving evidence to the House of Commons Employment Committee stated that:

"We do not see Urban Development Corporations as being primarily and immediately concerned with employment, they are about regeneration and indeed, about physical regeneration of their areas and that is where the primary thrust of their activity is concerned."

Accordingly the tools provided to the Corporation by Government through the DoE were indeed concerned with physical matters - powers for planning and development, for land assembly and infrastructure provision. The tools for creating employment, as such, rested not with the DoE but were divided amongst the Departments of Trade and Industry, Employment, Education, the Home Office and the Manpower Services Commission (MSC). Apart from such difficult organisational issues other realities had also to be addressed by the Corporation.

It was acknowledged at the outset that before economic revival could take place, before the area could be successfully promoted, the general public perception of the area as London's backyard had to be overturned. To do this it was recognised that significant public investment had to be made: in extensive land reclamation; in the expansion of basic gas, water, electricity and drainage services; in new technology such as fibre optic cables; in the provision of new roads and public transport facilities.

Furthermore, all this expenditure was required "up front" in order to successfully lever in extensive private sector investment and involvement to be followed by new businesses and jobs.

This proved to be a demanding initial set of tasks, for the area had long been neglected, was regarded as inaccessible and had in the past been by-passed by the London property markets. To many, London Docklands presented a problem, to the extent that consultants appointed by Government in the early 1970s had recommended, as one of a number of options, that the area be grassed over as a vast new public open space for Londoners. To the Corporation, however, it presented a challenging opportunity to arrest decline, and using innovative methods revive an historic core of London.

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The Wider Economic Context

The economic situation that the LDDC inherited in July 1981 was instrumental in determining the Corporation's initial approach to its employment and economic strategies. In common with the rest of London, Docklands had seen a dramatic decline of jobs over the previous 20 years, particularly in the manufacturing sector but with a loss of jobs in every category of employment. Historically against a background of a declining population, Greater London lost over 400,000 jobs in manufacturing industry between 1961 and 1971. A further 100,000 jobs were lost in the same period in the group broadly described as distributive trades, transport communications and utilities. Some 8,500 jobs were lost in Docklands alone in the five years before the Corporation came into being, that is between 1976-81. By illustration, this was against a backcloth of events in Tower Hamlets where the borough saw its population decline from 202,000 in 1966 to 132,000 in 1981 and jobs from 145,000 to 75,000 in the same period.

Dockers in call-on shed, 1962Related in part to this economic decline was the large stock of vacant industrial floorspace in the area with unit sizes largely unrelated to market demand and much of it obsolete in terms of modern requirements. Estimates at that time indicated that there was a total of 7.6 million sq.ft (710,280 sq.m) of vacant space in the three Docklands boroughs, of which 3.2 million sq.ft (299,065 sq.m) was located in Tower Hamlets, 2.8 million sq.ft (261,682 sq.m) in Newham and 1.6 million sq.ft (149,532 sq.m) in Southwark.

Of significance was the fact that 43% of the space in Newham was constructed in the 1950s and 1960s while 44% of Southwark's vacant floorspace dated from the 1940s. A similar situation existed in Tower Hamlets. These were hardly assets which could be utilised by the Corporation in seeking to attract new businesses to the area. The task was not made easier by Government studies of the time. These confirmed that inadequate premises were a material factor in many employers moving out of the inner City to other locations resulting in loss of jobs and contributing to the air of dereliction as vacated premises were being largely ignored by the market. This was precisely the situation in London Docklands.

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The Emergence of an Employment Strategy

Against this difficult background the Corporation nevertheless recognised that there were some positive elements which could be turned to advantage in formulating initial strategies to attract investment and new jobs to the area. These included extensive land holdings which had been transferred to the Corporation and which could be turned into serviced sites for new development. It included the 1,000 companies which existed in the area and which could, with active business support from the Corporation, be helped to diversify, expand and consolidate thereby creating enhanced job opportunities for people with local skills. There were also the 482 acres of the Isle of Dogs Enterprise Zone (EZ) which came into being on the 26th April 1982. This had a 10 year life and was to play a key role in the Corporation's plans in creating a new economic structure, not just for the Isle of Dogs, but the wider area.

Launch of EZThe creation of the Enterprise Zone provided the Corporation with the opportunity to create an initial two prong strategy. First, the Enterprise Zone tax benefits, it was decided, would be used to attract largely new businesses to the area on to either serviced development sites prepared by the Corporation or modern premises built by the private sector for buying or leasing by new businesses. Second, it was decided that this inward investment activity would be complemented by assisting existing firms, located outside the EZ, to benefit from business support and development programmes. These incorporated financial schemes of assistance provided under the 1978 Inner Urban Areas Act, which was passed by Government to enable local authorities to assist businesses, especially in deprived inner city areas.

In this way the Corporation sought to retain existing firms in Docklands and help them to grow and prosper, whilst seeking to bring new businesses to the area. At the same time, the Corporation was careful not to attract businesses to move into the area simply on the basis of financial incentives or grants alone. The view was taken that what Docklands required for its long-term employment future were viable companies of substance and not companies simply attracted by the prospect of financial carrots or indeed other handouts as offered by other regions undergoing economic structural change. As part of this strategy, over 2 million sq.ft (186,915 sq m) of empty, obsolete industrial space was demolished by the Corporation in the future Enterprise Zone to provide land for development and subsequent provision of business premises. Such premises were to be let at market rates in order to attract not only new businesses but also to create a new modern business environment for the area.

The Wimpey built Enterprise Business Park, Indescon Court and The Lanterns were schemes all located in the Isle of Dogs Enterprise Zone which represented the first wave of new business space in London Docklands. These by 1982-83 provided modern landscaped accommodation with car parking and loading facilities in a range of unit sizes, and at rental levels competitive with such accommodation which existed elsewhere. Serviced sites were also made available for those companies who preferred to buy their own plots of land and build their own premises, and publisher Northern and Shell was an early example of this.

Outside the EZ existing Docklands companies were provided with business development support programmes and financial assistance under the Inner Urban Areas Act, the use of which the LDDC Board had approved as early as November 1981.

In deciding to use the Act, the Board sought to implement policies which inter-alia would help:

  • To introduce growth, service and high technology industries to the area
  • To establish a new economic base for existing industry and commerce
  • To build on occupational and development success wherever it already existed - "the growth area" - approach
  • To secure a high quality of development and environment
  • To use the loans and grants available under the Act as "levers" to extend private sector participation in both the industrial and commercial sectors.

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It was also decided to focus use of the Act in certain key areas where existing employment activities were concentrated. Such areas included Silvertown, the London Industrial Park in Beckton and parts of Wapping, Bermondsey and Rotherhithe.

Furthermore, it was decided that with the exception of firms displaced by the Corporation's programmes, assistance under the Act would not be made available to companies locating in the Enterprise Zone - "in order to ensure a spread of financial assistance throughout the Docklands area". Also "in order to sustain existing firms' commitment to Docklands and to maintain existing established industrial/commercial locations' preference was given in providing help under the Act to local firms' proposals and plans for "in-situ" improvements where they accorded with the Corporation's planning and development proposals.

Indescon Court, under constructionApart from these locational criteria the Corporation also adopted certain sectorial criteria. Thus it was decided that in allocating financial help preference would be given to firms engaged in sectors of technological innovation in order to "encourage growth, service and high technology firms to locate in Docklands, assist in diversifying the existing employment base and expand related opportunities". It was also decided to give preference to existing local firms engaged in traditional but, nevertheless, expanding manufacturing sectors of industry which wanted to invest in the modernisation and expansion of their premises in order to "sustain local industry and provide opportunities for its growth". With an Enterprise Zone in its midst, the Corporation was concerned to maintain the vitality of areas external to it. It therefore decided that special consideration should be given to start up new venture firms, especially those engaged in research and development of new technology which wished to use and adapt existing vacant premises located throughout Docklands but outside the EZ. The Act was therefore used to assist such firms with front-end finance to aid their beneficial use of the many vacant premises in Docklands and thereby help to minimise any possible detrimental effect on commercial premises located outside the EZ. (in the event, the Corporation's concerns proved unfounded for many premises were subsequently acquired outside the EZ for conversion to residential use, especially obsolete riverside warehouses and other buildings on waterfront locations).

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The Role of the Docklands Business and Research Centre and the Docklands Business Club

In addition to providing development land, new premises and financial assistance, the Corporation from the start was determined to develop a close and positive working relationship with companies in the area. This included both those who had survived the dock closures as well as newcomers. Developing economic and employment strategies was seen as a dynamic process by the Corporation, one involving the emerging business community. Apart from being consistent with the Corporation's remit of working in partnership with the private sector, the Corporation saw many advantages in such an approach.

As a result, in April 1983 the Corporation Board agreed two major business development and support initiatives - the creation of the Docklands Business Research and Information Centre (DOBRIC) and the Docklands Business Club (DBC). After nearly two years work the Corporation was moving on from its initial prime tasks of site acquisitions, land preparation, infrastructure and service provision. Companies were responding to these physical programmes of regeneration and making increasing demands on the Corporation for basic business information, as well as assistance with planning and financial matters in preparing their own proposals for investing in the area. Docklands was after all an untested location, unlike the City and the West End, both well populated with professional advisers, agents, business and research institutions. In contrast, Docklands possessed no such facilities for the would be investor or relocatee. The creation of DOBRIC, located in Dockmasters House at the main entrance to the Enterprise Zone, was the starting point of providing a comprehensive centralised and fully integrated support service by the Corporation to the business community. Staffed by specially recruited business managers from the private sector, it provided a range of specialist help including advice, information and counselling services. As such, DOBRIC, formally launched by Sir George Young, then Under Secretary of State for the Environment, in October 1983, pre-dated by many years the Government's own "One Stop Shop" service that was introduced for businesses in the early 1990s.

AsdaA similar first was achieved by the Corporation in creating the Docklands Business Club which was launched in May 1984 by David Trippier, the then Small Firms Minister, at the Department of Trade and Industry. Here the Corporation took the view that its relationship with businesses should be more than a passive one way flow of providing services whether of financial assistance or planning permissions. Instead, it considered that within the overall regeneration framework, it should in its most successful form be an inter-active relationship. This meant that both parties, that is Corporation and business, should stimulate each other through dialogue into a variety of proposals, plans and initiatives aimed at the common goal of successful economic redevelopment. It was an approach new to the UK based on real partnership, but one which had been tried and successfully tested in the USA. There, City Halls and local businesses had long pioneered such partnerships in successfully and jointly redeveloping their redundant waterfronts as in Baltimore, San Francisco and Boston. In practical terms, the creation of the DBC put Docklands businesses on the "inside track" of the Corporation's activities. At monthly lunchtime meetings, the Corporation's Directors and senior executives would outline plans and proposals for the area, especially those affecting local businesses. These occasions provided an opportunity for businesses, new and old, to meet informally amongst themselves and the Corporation staff. The contact and the dialogue so established proved invaluable to both parties as economic regeneration gathered pace.

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Employment and Jobs - Initial Outcomes

Towards the end of 1984 good progress was being made by the Corporation towards the economic revival of the area. Doubts about the Corporation's continued existence had been removed the previous year with the re-election of Margaret Thatcher's Conservative Government in 1983. Perceptions of the area as a new business location were also beginning to change for the better. These were helped undoubtedly by the emergence of an embryonic business community in the Isle of Dogs Enterprise Zone, the start of work on key public transport schemes such as the Docklands Light Railway (DLR) and the massive reclamation programmes underway throughout the area. There was also, albeit grudgingly, the beginnings of local recognition that with the final dock closure, that of the Royal Docks in November 1981, future jobs would certainly have to come from new economic sectors unrelated to the past.

Cannon WorkshopsIt meant that a whole range of new skills would need to be acquired by the local labour force in order to compete in this new job market. It was to lead the Corporation into the highly complex field of adult skills training and education generally, of which more later.

By 1984, certain trends were emerging which provided an outline indication of an emerging employment profile for the Urban Development Area (UDA). These showed:

  • The emergence and concentration of small firms in units of one to 10 employees
  • A move away from the manufacturing sectors and the emergence of service sector firms
  • A high proportion of new firms - up to 40% of all firms with less than five years' residence in Docklands provided nearly a third of total employment

Such trends contrasted with the picture painted by the 1978 Employment Census. This showed that the UDA contained some 1,200 firms (reduced to 1,000 by 1981) and employing 37,000 people (reduced to 27,200 in 1981). Some 21 % of firms were in the manufacturing sector employing 42% of all employees, Of these firms 650 were located in the UDA part of Tower Hamlets and employed some 14,000 people at the time of the Census. Jobs, the Census revealed, were still influenced by the area's historical base - thus 26% of all jobs were provided by the transport and communications sector, 25% by the food, drink and tobacco sector, and 9% by the distribution sector.

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By comparison, the Corporation's Annual Report and Accounts for 1983-84 estimated that since July 1981 at least 3,860 permanent new jobs had been created with another 1,500 jobs engaged in construction work. These jobs were at the forefront of creating a new and diversified economic base for the area, deliberately moving away from the past to create a solid new employment future. Of these new jobs, about 1,000 were established in the EZ, including 110 companies in Cannon Workshops. Encouragingly, these newcomers represented new start-up businesses ranging from textile consultants to light engineers. Outside the EZ, the opening of the two Asda stores on the Isle of Dogs and Beckton created 700 jobs in the retail sector.

By the end of March 1984, the Corporation had invested over 21 million in infrastructure, including new roads and services on the isle of Dogs enabling the EZ to come into its own. In the same period, private investment in the EZ totalled 140 million and new business space totalled 1.3 million sq.ft (121,495 sq.m). Twelve months later the Corporation's investment had increased in the EZ to 35 million. Private investment had risen to 180 million and total new jobs had jumped to 5,700 with new business space totalling just under 2 million sq.ft. (186,915.sq.m). Against this gathering momentum there were, nevertheless, some disappointments. The rationalisation of traditional industries had continued. Thus the Corporation was unable to persuade Crosse & Blackwell not to phase out operations in Newham with the loss of 490 jobs. Some 1,400 redundancies were notified in the period between July 1981 and June 1983 and consequently local unemployment in the early years of the Corporation's life remained high. In 1984, male unemployment ran at 30% and that of women at 15%, compared with average unemployment levels of 9.6% for Greater London and 12.4% for Britain as a whole.Harmsworth Quays, printing works

Against this background the Corporation's employment strategy was beginning to focus on three key elements:

  • Retaining existing businesses
  • Attracting new firms to the area
  • Training and stimulating new initiatives

As far as existing businesses were concerned, the Corporation's policies involved assisting firms with their expansion and consolidation. Use was being made of the Inner Urban Areas Act to provide financial assistance in such cases. By March 1984, 52 firms had been so helped involving some 750,000, and there were 62 applications in the pipeline involving a further 2.3 million. Firms were particularly utilising Sections 5 and 6 of the Act which provided for financial help for physical improvements to existing sites and premises. DOBRIC was also making its mark and its advisers handled over 1,100 enquiries in the six months following its opening in October 1983.

However, whilst this was encouraging, what these early days revealed was that if the LDDC was to make a significant and early breakthrough in creating additional jobs of any magnitude, it would have to be through attracting new substantial businesses to the area. Such firms it was calculated would have no need of financial grants and would be able to make a long term contribution to the area not least in assisting with training provision.

The Isle of Dogs EZ, with its tax incentives and relaxed planning regime, was the magnet used to attract inward investment to the UDA. With its 10 year life, the Corporation quite rightly focused its initial investment in site preparation and infrastructure provision on the Isle of Dogs. The attractions of the Zone were aggressively marketed and promoted, both in the UK and overseas, by consultants specially appointed for this purpose. Those companies with capacity to use the 100% capital allowances offered by the Zone were specially targeted, as were builder contractors to provide speculative business space. This approach soon started to provide positive dividends in attracting in April 1984 the Daily Telegraph printing complex to the Zone. This development alone involved the acquisition of a 13 acre site, an investment of 60 million, 250,000 sq.ft (23,364 sq.m) of space and 2,000 jobs. At the same time, Tarmac Properties Development agreed to build at Heron Quays over half a million sq.ft (46,728 sq.m) of modern business space involving an investment of some 40 million.

Corporation projections made at that time considered that the Zone had a capacity for 4.4 million sq.ft (411,214 sq.m) of commercial space. On this basis it was calculated that between 4,000 to 6,000 jobs could be created by 1986 and some 8,000 to 11,500 by 1991. It was acknowledged, however, that much would depend on the private sector's response to the opportunities created by the Corporation. In overall terms, it was considered that the UDA had a capacity to provide some 71,000 permanent new jobs including those in the EZ.Tate and Lyle sugar refinery

The provision of the DLR, its extension to the Royals, the development of Stolport, as London City Airport was then known, and improved road communications were already recognised as essential ingredients to successfully achieve the projected job scenarios.

With the potential of so many jobs on the horizon, the LDDC decided by 1985 to adopt a more aggressive and selective marketing stance. It entered a critical phase of promoting Docklands opportunities to hi-technology sectors including telecommunications, information technology, office support services, computerised printing and media, as well as the leisure and tourism sectors. This inward investment activity focused on "sunrise" rather than "sunset" sectors of business and gave added impetus to the third strand of the Corporation's employment strategy, namely training and related initiatives.

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Training for Jobs in Docklands

As has already been stated, the Corporation never had any formal responsibility or powers relating to education or vocational training in Docklands. Until its abolition in 1990, the Inner London Education Authority (ILEA) shared responsibility for education in the area with Newham as an outer London borough. After 1990, Docklands' two inner London boroughs joined Newham as education authorities in their own right. Responsibility for vocational training rested with a number of government departments. These responsibilities were being reviewed and changes there were also underway. The absence of organisational stability in these bodies at the very time when their input was crucial was unhelpful to the Corporation when it was developing its training initiatives.Skillnet premises

The relationship with the Manpower Services Commission (MSC) was particularly important in that it was the main funding agent for adult training in the United Kingdom. In the period between 1982-84 it had carried out a major review of its activities, the results of which were published in a Government White Paper entitled "Training for Jobs" in January 1984. In carrying out that review and pending its outcome, the MSC had effectively put a block on Corporation proposals involving adult training. As the Government's training funder, the MSC's approval was also required for the Corporation's own training initiatives where a grant to a third party was involved. It did not help either that there was no MSC office located within the Docklands area, or even a team assigned to Docklands, points which did not escape the House of Commons Employment Committee when it considered employment matters in Docklands some four years later.

In spite of this difficult situation, the Corporation endorsed in February 1984 a training strategy which incorporated the following initiatives:
  • The establishment of an information Technology Centre (ITEC) under the MSC/Department of Industry programme to train young people in new technology skills, especially those related to firms moving into the area
  • The establishment of a training workshop under a MSC programme for young people in conventional skills recognising the needs of existing industry
  • The provision of an Access Unit, also under an available MSC programme to identify training of older unemployed workers directing them to relevant courses of training in existing establishment.

As part of this overall strategy, the Corporation also resolved to offer financial support to other training initiatives in the three Docklands boroughs and that its own programme should act as a catalyst for other bodies to provide training. Above all, the Corporation was determined to ensure that these initiatives would be, as Bob, later Lord, Mellish the then Deputy Chairman, forcibly put it "training people for real jobs".

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Providing training of any kind was to prove a difficult task. The training ball was always being bounced between employer, government and the trainee. Even today some would claim that no clear responsibility exists, or alternatively responsibility exists at several levels, especially for funding.

There was also a particular Docklands dimension for as Alan Benjamin, an early LDDC Board Member with responsibility for education and training matters at that time, was to write:

"Training was the least important activity in the minds of disappearing employers, parents and adults who became unemployed. Training for what? They said. There are no jobs, no future".

In these circumstances, the provision of the Access Unit and the Training Workshop proved problematic. However, a start had been made in 1983 with the establishment of the Docklands ITEC, one of 170 units established across the country. Located in the heart of the EZ it made good progress in training unemployed young people in the 16-18 years age group in basic electronics, computer programming and maintenance, as well as in automated office techniques. The courses were combined with structured work experience with local companies and led to vocational qualifications. Originally a 60 place centre, it increased to 100 places by 1988-89, facilitated by LDDC funding of nearly 1.5 million.

Jobs and Training FairThe following year the Corporation decided that a "training broker" was required to bring together employers, especially inmoving employers, providers of training and local unemployed people. The concept was to try and match employer needs with the employment needs of local people and fill the skill gap with training provision from local colleges and training institutions.

This brokering agency was named Skillnet and it was a formal partnership between the LDDC, ILEA and the Borough of Newham to cover the area of Docklands. The boroughs of Tower Hamlets and Southwark were represented by ILEA. The funding was provided by the Corporation, some professional resources by ILEA and Newham, with the European Social Fund providing further financial support. Skillnet's board and management team sought to actively involve employers, local unemployed people and training providers. Skillnet's early days were not easy. As Alan Benjamin again recalls a number of negatives surrounded the project - political posturing, unemployed people's suspicions, obvious gaps in training provision, courses inappropriate for required skills and a lack of courses to meet future requirements. For example, the Poplar centre of the local technical college was seeking to maintain at that time its welding classes whilst resisting proposals to create a new technology department.

Against this background it was not till 1988 that Skillnet begun to function effectively. Training providers were persuaded to modify course material, introduce new courses, extend course places and work more closely with employers. A good example was the situation regarding the construction industry. At that time there were no courses in the Docklands area which addressed the new construction techniques required for the massive new construction programmes underway or planned. There was also a shortage of the maintenance skills required for and in the new schemes under construction. These gaps were subsequently filled by schemes such as Poplar Construction Skills Training Centre, funded by the Corporation and operated in association with Tower Hamlets Council, the Construction Industry Training Board and Canary Wharf. Apart from this the Corporation was concerned to ensure that Skilinet would enable local people to seek employment on a London-wide basis, as public transport facilities improved, especially following the opening of the DLR in 1987.

As Skilinet evolved new issues emerged. Funding was one, in that both MSC and European Social Fund resources were only available for schemes relating to 18-25 year olds. Under or over these ages required separate funding, a situation which has since changed but which certainly conditioned the nature of Skilinet's training approach at the time. Happily by 1988 over 2,000 young people had experienced through Skillnet their first taste of organised training for work.

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The House of Commons Employment Committee 1987-88

The Corporation's activities in job creation, training and employment matters had always been under close and critical scrutiny by various local activist groups and local Labour politicians. This scrutiny was part of the wider public examination that the Corporation faced on a regular basis from the first day of its creation. In Spring 1988, however, the Corporation's performance was placed under formal public examination when its officers were summoned to appear before a House of Commons Employment Committee. The Committee had been established under the Chairmanship of Mr Ron Leighton, a local Labour MP, to generally consider the employment effects of UDCS. That was the ostensible purpose. However, since at that time only two Corporations had existed for any length of time, namely Merseyside and London Docklands, it was in effect a detailed review of the progress made by these organisations, particularly the LDDC, given the Committee's Chairmanship and the number of Dockland-based witnesses.Tower Hamlets College, Poplar

The Committee met 12 times between February and June 1988 and took evidence from a number of witnesses called before it, including representatives from government departments, industrial training boards, local authorities, community groups, the private sector and the Church.

The issues which the Committee wished to particularly address were what had been the effect of UDCs in employment terms to date; what ideas UDCs had for creating employment within their areas; whether there was a mismatch between necessary and available skills; and whether there were attempts to match jobs to existing skills. The Committee also expressed a particularly strong interest in ascertaining how far incoming jobs had gone to local people and to what extent had local employment been encouraged. The framework for their deliberations was therefore a rather narrow one focusing on local aspirations and needs. It neglected to address important macro economic issues of a global and strategic nature all of which were having such a significant impact on the Corporation's activities of generating and attracting new investment and employment, much of it from overseas.

Given the Committee's chosen framework, it was not surprising that the Corporation's endeavours attracted a rather critical response. On the other hand there was, however, considerable advantage to the LDDC in the Committee airing in public many of the issues which had previously concerned the Corporation and which the Committee sought to address. The Committee's findings and recommendations published in July 1988 proved most helpful therefore in moving further forward the work of the Corporation in employment matters.

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By reviewing the Corporation's work the Committee acknowledged that "no-one can walk through Docklands and be unimpressed by the scale and excitement of the developments. Whatever its faults, the LDDC has extended the physical area of the City of London by increasing available office space; this will help the City to compete with newer financial and commercial centres".

However, the Committee noted that the DoE's remit to UDCs "contained no direct mention of employment or job creation as a specific aim". Nor had the DoE provided "additional direction to UDCs concerning the desired employment impact of regeneration on the local economy or the local and neighbouring populations".

The Committee took the view that UDCs could not be regarded as a success if "buildings and land are regenerated but the local community are by-passed and do not benefit from regeneration".

Consequently, the Committee recommended that the remit for UDCs should be altered to provide a more precise definition of regeneration which should include "employment and unemployment objectives".

Apart from recommending that the UDCs remit should be more explicitly widened, the Committee's work also assisted the LDDC in other aspects. It recommended that the Training Commission, the successor to the MSC, should play a prominent role in providing UDCs with much needed local labour/skills statistics, the lack of which had bedevilled much of the Corporation's early work. Second, it recommended that the Minister for the Inner Cities "take all necessary steps to ensure co-ordination between government departments".

UDCs themselves, including the LDDC, were recommended to work more closely with the Training Commission, to give a priority to improving their relationships with local authorities and local communities, and the LDDC was specifically asked to improve its consultation procedures with these bodies. Finally, the Government itself was recommended to draw the attention of UDCs to the need to "make more effort to target employment and training initiatives on disadvantaged groups in the local community who might otherwise miss out on the benefits of regeneration".

In looking back, the Committee's report provided a watershed in the Corporation's approach to employment matters bringing with it positive benefits.It formally drew in the key employment partners to assist the Corporation in its work, initiating a new era of collaboration between different agencies thereby sowing the seeds for the emergence in 1991-92 of locally based Training and Enterprise Councils (TECs) (LETEC and SOLOTEC in the case of London Docklands) and the many "compacts" between local businesses and schools. From an internal financial viewpoint, the extended remit greatly facilitated the funding of a whole new raft of projects aimed at improving not just physical, but also socio-economic conditions in the area. This expanded form of funding, initially by the DoE, was to find later expression in the more co-ordinated approach of Single Regeneration Budget (SRB) funding covering a number of programmes previously managed by different government departments.

The Corporation was to make good use of this new climate and of its new found operating and funding flexibility. This period coincided with the tail end of the mid-1980s property boom and the start of significant developments such as the Canary Wharf business district which at that time held the promise of some 60,000 new jobs.

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Employment and Enterprise

In the aftermath of the House of Commons Select Committee recommendations, the LDDC embarked on its most ambitious programme yet, to enable people in Docklands to avail themselves of the rapidly increasing employment opportunities. As Table 1 at Appendix A indicates, jobs had jumped from less than 30,000 in 1985 to more than 40,000 by 1987.

Salmon production plantBetween 1988 and 1991, the elements of education, enterprise and employment were fused into a major three year programme costing some 10 million per annum, a total of some 30 million in all initially. This was to grow to a total funding of some 45 million in the six years up to 1994.

This new strategic approach was aimed first at assisting local people to gain appropriate skills for employment and second to ensuring that local employers had a ready supply of locally trained workers. As statutory responsibility for training and education remained with the local education authorities and the newly created TECs, the Corporation further expanded its links with these agencies. This was especially important in terms of addressing the longer term challenges raised by heightened employer expectations through its support for education projects covering all age groups.

Corporation support to Local Education Authorities was provided through capital investment, assistance towards curriculum aids and teacher support. Where projects involved capital spending on building programmes, the Corporation's contribution was focused towards enhanced community facilities and the under fives. Major projects during this period included the provision of nine new primary schools, a school's extension programme in Tower Hamlets and a new secondary school in Surrey Docks - later expanded to support for eleven new primary schools, and two new secondary schools, further extensions and refurbishments, three post 16 colleges and nine vocational training centres.

To assist teachers in delivering an updated and better quality of education, extensive support for curriculum aids was provided. The measures ranged from the production of teaching packs to the provision of computers in schools and from support for science and technology to projects to make the curriculum more work-orientated. As a result of the LDDC's work Docklands has the highest computer to pupil ratio in the UK. Support for teachers included expanding initial teacher training, placing teachers into industry, assistance in delivering curriculum materials and help with the purchase of equipment.

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However, as well as improving the staying on rate and increasing participation in education and training, the Corporation was also concerned to ensure that local people were provided with the opportunity of accessing the highest levels of education in order to better compete for the many service sector jobs moving into the area. Bridges were therefore constructed between higher and further education and a special programme initiated enabling Docklands residents to access higher education with non-standard higher education entry qualifications. These programmes increased participation rates in further education, increased demand for higher education and were later to lead the Corporation to initiate with others the Docklands Campus of the University of East London now under construction in the Royal Docks.

In all, these longer term measures marked a new approach taken by the Corporation in providing access to the widening range of job opportunities that were becoming available in the area but which required a higher level of qualification and skills than hitherto. in effect, a comprehensive training for jobs plan was put into place which embraced access, equality of opportunity, vocational training, employment placement and business development. The key focus of the overall training programme was its employment linkage, given that the purpose of training was to secure employment. As a result, wherever possible training schemes funded by theCorporation were geared up to direct employment opportunities. Furthermore, together with LETEC (London East Training Enterprise Council) as its new partner, the Corporation supported a central placement agency for those involved in adult training in Newham. To support further direct entry into employment the Corporation also established a Docklands based customised training facility. This acted in a brokerage role and working closely with employers arranged training for local people which directly matched identified job opportunities.

Butlers Wharf Chef SchoolOne of these was a new labour scheme - The Partnership - established by a number of public and private sector organisations in April 1997. This had the objective of taking full advantage of renewed development activity especially in Tower Hamlets. The scheme backed by Canary Wharf Ltd, the Employment Service, Niagara, the Corporation and LETEC, together with the three Docklands Boroughs sets out to target contracts for local businesses and construction jobs and training for local people as some 1 billion is invested in building out further stages of Canary Wharf, including a hotel, leisure and residential complex, as well as other developments on the Isle of Dogs and the Royal Docks. The scheme has the helpful feature of providing assistance to those in financial hardship to buy tools needed for employment. The Partnership is scheduled to run initially for a two year period at a cost of 360,000, with the possibility of further funding from the European Social Fund. By the end of 1997 some 160 people had found work after registering with the Partnership.

Another example was the establishment in 1996 of the Butlers Wharf Chef School within the Conran restaurant complex at Tower Bridge at the cost of some 300,000. This collaborative venture is aimed at responding to a significant shortage of trained staff in the London area following the rapid expansion of the restaurant sector within the Capital, including Docklands. Apart from the Corporation the partners include Southwark Council, Conran Restaurants and the Hotel and Catering Training Company. The School also receives support from London Training and Enterprise Councils, Tower Hamlets Council, Bethnal Green City Challenge, Groupe Chez Gerard, Catering and Allied and other leading restaurant groups.

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Final Outcomes and Conclusions

In common with the rest of the Capital, employment in Docklands suffered during the recession. in regional terms London and the South East had taken the brunt of the recession with nearly half a million people (11.6% of the Capital's workforce) unemployed at the height of the recession towards the end of 1992 - a rise of some 85% from the 270,000 unemployed in April 1990. In Docklands, total unemployment rose in the same period from 2,658 to nearly 5,000. These difficulties were exacerbated because changes in London's employment structure adversely affected those sectors which had particularly made such significant contributions to Docklands' recent job growth - banking, finance and other business sectors. These had in 1992 provided 33% of all jobs in Docklands, a total of 16,300 employees in 557 firms.

However, as London's and with it the Docklands economy emerged from the recession in the middle 1990s, the Corporation found itself in a particularly strong position to compete for new investment and jobs. It had used the "fallow" years of the recession to invest heavily in new infrastructure and transport facilities thereby further improving access to and from the area. The "breakthrough" achievements of 1993 saw the completion of the Docklands strategic road network with the opening in May of the Limehouse Link, and the start of work in December on the Jubilee Line Extension, following on from Canary Wharf being taken out of administration in October. The March 1994 opening of the DLR Beckon Extension gave a further impetus to expanding development and job opportunities in the Royals and in revitalising London City Airport operations.DLR Bank Station

All these improvement programmes greatly facilitated a period of dramatic job growth over the Corporation's final years, with record levels of space being let and investment made. Over 8,000 new jobs alone were attracted in the 12 month period ending March 1995, with major contributions being made by London Underground (2,300 jobs), Mirror Group Newspapers (1,100 jobs), independent Newspapers (500 jobs) and Credit Suisse (450 jobs). In the same period, continued economic recovery together with construction progress on the Jubilee Line Extension boosted occupational demand for office space in Docklands with total office lettings exceeding 1 million sq.ft (93,457 sq.m).

Further future job growth followed in the period 1996-97 with 1.8 million sq.ft (168,224 sq.m) of offices let in 1997 (the highest recorded figure since 1987) and with such major international companies as Citibank and Readers Digest seeking to establish themselves in the new business district of Canary Wharf. Elsewhere the expansion of retail facilities, the growth in small and medium sized businesses (68% of businesses in Docklands have fewer than 10 employees), the expansion of DLR and London City Airport services all contributed to Docklands' total jobs exceeding 85,000 by early 1998 and total employers growing to some 2,690.

However, it was not just the number of jobs in Docklands itself that was important. For the first time since the closure of the docks, the dramatic transformation of public transport was enabling Docklands residents to access a far wider labour market. This, together with the growth in local employment opportunities, improved educational provision, together with enhanced staying on rates, all had a beneficial effect on unemployment in Docklands. Thus in 1981 there were 3,533 unemployed residents out of an economically active population of only 19,788. This contrasts with 3,170 out of 40,077 active in April 1997. This represents a significant decline in unemployment from nearly 18% in 1981 to under 8% in 1997, reflecting, whilst not quantifiable, the enhanced employment opportunities available to local people.

Perhaps, however, of even more importance is the fact that Docklands today is no longer dependent for its employment on a narrow band of activities with limited growth prospects. Instead, the new Docklands economic structure that has been deliberately created by the Corporation is based on a wide variety of employment sectors, especially the service sectors, thereby providing a rich and varied range of new job opportunities. Furthermore, these are available at all skill levels and importantly in growth sectors. As can be seen from Table 2 at Appendix A, sectors which have grown significantly since 1981 include manufacturing (98 employers in 1981, 169 in 1997), distribution, hotels and catering (269 in 1981, 686 in 1997), financial services (80 in 1981, 725 in 1997) and other services (168 in 1981, 500 in 1997). Today the challenge is for local people to take full advantage of such improved conditions and to seize the opportunities for education and employment which are now available to them.

There is no doubt that London Dockiands in economic and employment terms is at the end of the Corporation's work far better placed to enter the new Millennium than it was in 1981. Within its area is located the Isle of Dogs and Canary Wharf, London's newest and fastest growing business district. Docklands, too, probably has the most extensive transport connections in the Capital to Continental Europe with its own international airport and through DLR and the Jubilee Line Extension direct connection to the existing Eurostar International Rail Terminal at Waterloo and that proposed at Stratford with its new high speed link. Those economically active in Docklands now have the choice of locally based jobs, of all kinds, or easy access to those in the rest of London and the region and indeed on the Continent. After so many years of neglect and decline, Docklands has become integrated with the rest of London and once again its residents have the opportunity to make their own special contribution to the economic growth and life of the Capital.

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Table 1: Employees Working in Urban Development Area

 

Year

Number

Source of Data

1978 37,261 Dept of Employment Census 1978
1981 27,213  DE Employment Census 1981
1983 25,032 IML/LDDC Survey 
1985 28,123 RBL/LDDC Survey
1987 42,053 RBL/LDDC Survey
1990 53,084 Insight/LDDC Survey
1992 51,446 RSL/LDDC Survey
1994 65,800   NOP/LDDC Survey
1996 69,975 LDDC Estimate
1997 72,000 LDDC Estimate
1998 85,000 RSL/LDDC Survey

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Table 2 : Structure of Local Employment - Key Growth Sectors

 

 Standard Industrial Classification (SIC 1980)

Number of Employees
(Number of Employers)

Absolute Change

   

 1981

  1997

 
 0/1. Energy/Water Supply Industries  645 (9)  888 (13)    +243 (+4) 
 4. Other manufacturing Industries  7,901 (98)  11,321 (169)   +3,420 (+71)
 5. Construction  1,964 (89)  2,083 (112)    +119 (+23)
 6. Distribution, Repairs, Hotel & Catering  4,220 (269)    10,440 (686)  +6,220 (+417)
 8. Banking, Finance, Insurance etc.  1,452 (80)  34,369 (725)  +32,917 (+645)
 9. Other Services  2,851 (168)  11,961 (500)  +9,110 (+332)

 TOTALS

 27,213  82,300  +55,087
     (1,014)  (2,690)   (+1,676)

 

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Acknowledgements

The idea of writing a series of monographs on various aspects of the Corporation's work was initiated and nutured by Eric Sorensen whilst Chief Eexcutive of the LDDC.

This monograph has been written by Peter Turlik, one time Director of Business Development and the EZ at the LDDC. Particular thanks are offered to Vicki Blyth for her much appreciated support, to Julia Heynat and Rosie Browen for practical encouragement in providing relevant data and statistics, and to Lisa Dyer for her support and computer skills.

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Other Monographs in this series, all published in 1997/98, are as follows

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Completion Booklets

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Annual Reports and Accounts

As with most organisations the Annual Reports and Accounts of the LDDDC are a good source of chronological information about the work of the Corporation and how it spent its money. Altogether these reports contain more than 1000 pages of information. These have been scanned and reproduced as zip files on our Annual Reports and Accounts page

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