There is growing recognition throughout the OECD of the need to link economic development and employment policies at the level of the individual city if the twin objectives of raising competitiveness and reducing worklessness are to be met. The challenge is particularly clear in the UK, where the employment rate of the working age population in the major cities has lagged consistently behind the relatively strong performance of the nation as a whole (HM Treasury, 2007). The Government has recognised that raising the UK employment rate towards its ambitious 80%national target will  require special  efforts to tackle unemployment and economic inactivity in the cities (Department of Work and Pensions, 2006). This is an important departure from the traditional  emphasis on national  labour market policies and standardised welfare to work programmes that pay little regard to geographical variations in socio-economic conditions.

One of the issues arising is the appropriate balance between measures to stimulate labour demand and create  jobs, on the one hand, and measures to strengthen  labour  supply by improving people’s skills, employability and motivation, on  the  other.  There is also an issue about how to connect employment opportunities to people in need of work but who face multiple disadvantages and barriers to employment, such as poor transport access and lack of childcare. Another issue relates to the amount of decentralisation and local control of the policy levers that government should encourage, and what form this should take.  

The purpose of this paper is to address these important questions by  focusing on the labour market context and policy situation in Glasgow.