Income and Poverty

A decade undone in a year?

  • Published: Dec 20, 2012
  • Author: Adam Tinson
  • Category: Income and Poverty

Last week DCLG released its figures for the Indices of Economic Deprivation for England from 1999 to 2009. The figures provide a limited time series counterpart to the Indices of Multiple Deprivation cross-section, and tell us something about trends in worklessness in local areas. 

The main finding from the study is that average economic deprivation rates fell between 1999 and 2008, before increasing again between 2008 and 2009. Rates of both income and employment deprivation were higher in 2009 than in 1999. 

Nine years of healthy economic growth rates with slow but steady declines in deprivation were reversed by the recession between 2008 and 2009. There was an increase of around 426,000 working age people in deprived households between 1999 and 2009. Accounting for population growth, however, this translates into an income deprivation rate of 13.4%, up from around 13.1%. 

However, deprivation has not changed uniformly across England. Two of the regions with the highest rates of income deprivation in 1999 (London and the North East) remained better off in 2009, even after a year of recession, than they did in 1999. The West Midlands, on the other hand, saw only minor improvements across the nine years up to the recession and a substantial deterioration during. This can be seen from the graph below, which displays the starting rate of income deprivation, the low point of deprivation in 2008 and then the higher 2009 figure.

A_decade_undone_in_a_year_30_1.png

This region-level analysis hides other interesting trends. Looking at London in particular, it is possible to identify areas that have seen their income deprivation rates plummet and others that deteriorated over the ten years. The graph below shows the deprivation rates for the London sub-regions (see NPI’s London poverty profile for more information on these). 

The worst performer is Outer East and North East London, which saw only marginal declines in income deprivation up to 2008 (though it remained better off than Inner East London in 2009). One of the boroughs in this area is Barking and Dagenham, which is notable because its income deprivation rate increased between 1999 and 2008, at a time when the country as a whole and every London sub-region experienced at least some decline. This represents a challenge for the borough: if it struggles during the good years, how will it fare in years of low growth?

Southwark represents what was happening in Inner East London; that is, something of a success story. Its income deprivation rate has fallen from around 24% of the working age population to about 17.5% (a fall of 6.5 percentage points, compared to a sub-region average of 4.5). In this sense, it remains better off during the recession than back in 1999. 

But it is unclear whether those who make up the income deprived at any one point are better off in 2009 than in 1999, as Southwark’s working age population has increased from 168,000 to 210,000. It may well be that the deprived represent a smaller proportion of the increasingly affluent Southwark population, or that they have been priced out and left Southwark altogether (perhaps to places like Barking and Dagenham).

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There are two bigger points here. Firstly, these figures give some indication of what might be expected to happen with the government’s benefit cap and changes to housing benefit. Affluent parts of London can expect to see further declines in income deprivation rates, not necessarily because of material improvements in the lives of those further down the income distribution, but because at risk individuals are likely to relocate towards cheaper and more deprived areas. The cases of Southwark and Barking and Dagenham suggest that government policy may simply be exacerbating an existing trend. This may create further problems for local authorities in these areas, and fewer opportunities for those moving.

Secondly, in the rest of England, whilst the North East and North West are better off in terms of income deprivation in 2009 than ten years previous, it would be a stretch to say they had converged meaningfully towards the better off regions. The midlands, on the other hand, appear to be going in the wrong direction. Much like Barking and Dagenham, the West Midlands made such little progress in the good years that it is now an area for serious concern. 


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