London employers warn of a widening AI skills gap

TL;DR:

• A BusinessLDN survey of more than 2,000 business leaders found half said their existing workforce had the skills the business needed, down from 63% a year earlier.
• Research for City Hall estimates 46% of London workers — around 2.4 million people — are in roles where AI could automate part of the job, against a 38% UK average.
• Sadiq Khan has accepted his AI and Jobs Taskforce’s recommendations and committed £18m to help young Londoners into work, training or education.

The plan comes from an AI steering committee convened by BusinessLDN and Deloitte, whose membership includes Microsoft, Lloyds Bank, NatWest, Sky and Linklaters. Its finding is that employer confidence in workforce capability is falling while expected demand climbs: more than three-quarters of leaders anticipate significant need for AI and advanced digital skills within five years, up from 66% in 2025.

What the committee wants

The asks are institutional rather than exhortative. City Hall is urged to create a pan-London careers and skills service, stand up a real-time dashboard tracking AI’s effect on jobs, and let employers help design training. Central government is asked to reform the growth and skills levy and expand adult-learning funding.

Khan has agreed to take forward three measures: an early-warning system to spot AI-driven job changes before they become a crisis, a partnership bringing employers, workers and educators together to redesign jobs rather than simply automate them, and a scheme pairing young Londoners with employers. Of the £18m committed, £10.5m extends a programme reaching about 6,000 people not currently in education, employment or training. The taskforce also pressed him to open talks on devolving more skills policy to the capital.

A constraint, not a forecast

The taskforce, chaired by Baroness Martha Lane-Fox, concluded an AI “jobs apocalypse” was not inevitable, but warned of what Lane-Fox called “a quieter drift” — fewer entry-level roles, weaker career ladders, growing inequality. Khan argued the debate had “become too polarised”, with neither the solve-everything nor the mass-unemployment view helping Londoners prepare.

The employer-side evidence lines up with the national picture. ONS data published the same week identifies lack of expertise as the most-cited barrier to AI adoption among UK firms that report barriers at all, ahead of cost and well ahead of regulation. Two independent datasets are pointing at the same bottleneck.

Looking forward

The TUC’s Adam Cantwell-Corn, a taskforce member, framed the outcome as contingent on “choices and who gets to make them”, arguing workers need a seat. For businesses outside London, the capital’s exposure — eight points above the UK average — makes it a leading indicator. Whether the response is exportable depends on how much skills policy Whitehall is willing to devolve, a question now landing on a government that has just dispersed its technology department.