Persistent problems of poverty and disadvantage

1.26 Although London’s economy has been generally successful over the past twenty years, not everyone has benefited and the incidence of poverty has not fallen. Income poverty rates for children, working age adults and pensioners are higher in London than elsewhere in the UK. A quarter of working age adults and 41 per cent of children are in poverty after housing costs are taken into account. Poverty is particularly concentrated in households with dependent children (working age people without children have poverty rates similar to those in the rest of the country). Deprivation is also concentrated among Black, Asian and ethnic minority and disabled Londoners.

1.27 As a result, London is an increasingly polarised city. On the one hand, it has seen a major growth in earnings, with significant rises both in the number of those earning high salaries, and in the amount they earn. This leaves those on low incomes or without employment further and further behind. This polarisation is associated with a range of social problems of ill-health, substance abuse and crime.

1.28 The labour market, and how individuals fare in it, is of central importance. Households with children in London are much more likely to be workless than childless ones, something reflected in their particular exposure to poverty highlighted earlier. Disabled people are almost twice as likely to be unemployed as non-disabled people. More generally, London has had higher levels of unemployment, and lower levels of employment than other parts of the country. Employment here is increasingly skewed towards occupations needing higher level skills and qualifications given the nature of the sectors in which London specialises. Rising land values have also squeezed out lower value activities. Making sure Londoners can get better access to the jobs in their city will be a key priority at a time when population is likely to grow, but the economy’s growth may be less robust.

1.29 Deprivation tends to be geographically concentrated (see Map 1. 3). Looking at the factors that are brought together in the Government’s Index of Multiple Deprivation (which covers aspects like employment, housing, health, education and access to services), it becomes clear that there are particular concentrations of disadvantage, especially in inner north-east London, running from Tower Hamlets northwards through Hackney to Haringey and eastern Enfield, eastwards to Newham and Waltham Forest and on both sides of the Thames to Barking and Dagenham and the southern part of Havering and from Lambeth and Southwark eastwards to Bexley. There is another cluster in west London, around Park Royal. This pattern is fairly consistent across the various components of the Index, although some show a rather more dispersed pattern (that for housing, for example). This suggests the importance of geographically targeted approaches to development and regeneration, focussing investment and action on places with the highest need.

Map 1.3 Index of Multiple Deprivation (2010)

1.30 There is a clear link between deprivation and housing. London is a very expensive place to live, a problem exacerbated by the income trends identified earlier (see para 1.26). The result can be that those with lower incomes find it very difficult to access the housing they need, with many having no option but to seek social/ affordable rent housing. This in turn can lead to social/affordable rent housing and deprivation being closely linked, with people finding it increasingly difficult to move on from social/ affordable rent into other forms of housing.