Poverty and inequality in London: What difference will the coalition's

social policies make?

Peter Kenway

London Poverty Profile 2009

How can London have highest poverty rate – and where is it?

• High rates of poverty and worklessness – but Inner and Outer over time

• Average rates of attainment for those with lowest grades – but in Inner and Outer (best region at age 16)

• V. high temp. accommodation rates – but Haringey 10X Richmond

• Most unequal region so ‘London’ rarely makes sense – but 32 boroughs is too many

• Use the five economic sub-regions where possible

Five sub-regions

Sixteen indicator picture: inner

Sixteen indicator picture: outer

Recession hit east more than inner JSA, unemployment, mortgage and landlord repossessions

Problems of perception

• Inner/outer misleads – deepest problems still in inner, concentrated in Inner E

• Inner W faces problems e.g. housing, low paid jobs, but not comparable with Inner E

• 2010 ‘update’ highlights this: Inner W hit the least; Outer E resembles Inner E; problems e.g. re housing in Outer W.

• Inner E more in common with Outer E than Inner W – but East/West also misleads

• Inner W home to many national institutions – a bubble in a bubble?

Three year child poverty rates/shares

53%

33%

23%

84%

40%

54%

44%

37%

26%

82%

39%

59%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Inner rate Outer rate In-workrate

Out-of-work rate

Londonrate

Outershare

02/03-04/05 06/07-08/09

How do inner/outer and in-work/out-of-work interact?

Accounting for ∆ child poverty rate over time

For inner (outer) in terms of in- and non-work poverty rates:

• change in in-work rate [∆rw.sw] +

• change in non-work rate [∆rn.(1-sw)] +

• effect of change in work share [(r*w-r*n). ∆sw ]

• where: rw/rn in/non-work rates; (1-sw) % workless h’holds; * t=2

For London in terms of inner and outer poverty rates:

• change in inner rate [∆Ri.Si] +

• change in outer rate [∆Ro.(1-Si)] +

• effect of change in inner share [(R*i-R*o). ∆Si ]

• where: Ri/Ro inner/outer rates; Si % in inner; * t=2

(choices about precise form of decomposition)

Child poverty over time by inner/outer/all

Two effects dominate (almost cancelling at London level)

• fall in inner percentage in workless households

• increase in outer in-work poverty rate

Effects of the HB cap and 30% LHA limit

Unclear interaction with the inner/outer in-work/out-of-work

• £pw: Inner West is outlier; Inner East in the pack

• % affected: all in pack – substantial majority everywhere

• Exodus from the Inner West - but no simple exodus to suburbs

% LHA tenants affected Av. weekly amount

Inner East 76% £16.60

Outer East 70% £10.40

Outer South 73% £11.80

Outer West 80% £16.80

Inner West 80% £43.90

Conclusions

Even before the coalition’s social policies take effect:

• Deepening divide between the two parts of Inner

• Outer as a whole becoming more like Inner as a whole – but no less divided?

Hypotheses re coalition policies:

• 1. Deepen the changes that have been taking place in Inner and esp. Inner West

• 2. Accelerate/initiate change in many parts of Outer

But is this sustainable?

• Inner West has second highest number of low paid jobs (2008) of five sub-regions – 22% of the total

• Time and cost of public transport for travel to low paid jobs will grow in importance