Recession impacts most on East and Outer London

Poverty in the capital has become increasingly polarised according to new research measuring the impact of the recession, from New Policy Institute and Trust for London.

Launched on 12 October 2010, London's Poverty Profile: Reporting on the recession, shows that some areas, especially Inner West London, survived the recession well, whereas many others, particularly in Outer East London saw large increases in unemployment, numbers claiming Job Seeker's Allowance (JSA) and mortgage repossessions.

The research challenges the conception that poverty in London is confined to the inner city and is ringed by wealthy suburbs. Indicators highlighting unemployment, out-of-work benefits, debt, poverty and repossessions show that many Outer London boroughs, particularly in the East, have been more severely affected by the recession. Whilst the unemployment rate in Inner London has risen by 25%, in Outer London the rate has increased by 50%.

Download the report here.

Media coverage of the report is detailed here.

Key findings of the report

• Around 7% of London's working-age population are unemployed, compared to 6% in the rest of England. Whereas unemployment in the rest of England was rising as early as 2005, in London unemployment only began rising in 2008. The level of unemployment in London is back to where it was in the late 1990s.
• The rate of unemployment is still highest in the Inner East & South boroughs where around one-in-three unemployed people in London live. However, the unemployment rate has risen more quickly in Outer London (an increase of around 50%) than Inner London (an increase of around 25%) since 2007.
• This pattern is the same for people receiving Job Seeker's Allowance (JSA). Although the highest rates are found in the Inner East & South (Tower Hamlets and Hackney), all of the ten boroughs with the highest increase in JSA recipiency rate are in Outer London.
• Inner West London has seen the lowest increases in unemployment, so whereas in 2007 the unemployment rate was higher in the Inner West than in all three Outer London sub-regions, it is now lower than the Outer East & North East and the Outer West & North West.
• The unemployment rate among young adults is disproportionately high and higher than at any time in the previous 17 years. One in three of London's unemployed population are aged under 25.
• The level of personal unsecured debt in London is close to the national average. But the incidence of problem debt is higher - 8% of households (some 230,000 in total) are in arrears with bills, and half of these owe over £500.
• Since 2002, mortgage repossessions as a proportion of mortgage holders have been higher in London than the average for the rest of England. In 2009, the rate of mortgage repossessions in London was higher than any other English region apart from the North East.
• The proportion of landlord repossessions is higher in London than elsewhere. There is, though, no consistent pattern within London - mortgage repossessions are slightly higher in Inner London, but landlord repossessions are much higher in Outer London.
• Poverty in London is still high for all age groups compared to anywhere else in England, and higher still in Inner London. Child poverty is around 40% in London, meaning that over 600,000 children in London live in low-income households. However, this figure is lower than a decade ago due to declining child poverty in Inner London.
• The number of working-age adults in poverty in London has increased since the late 1990s to over 1.2 million. The proportion of London's low-income population who are in Outer London has now risen to 56%.
• In the three years to 2008/09, there were 310,000 more Londoners living in low-income, working households than there were at the end of the 1990s. During the same period, the number of children and working-age adults in low income, workless households fell by around 130,000. The result is that over half of all adults and children in low-income households live in a working household.

Compare the impact of the recession in different London boroughs.

Posted on 12 October 2010