Hitting the most deprived places hardest?

This study by Sheffield Hallam’s Centre for Regional Economic and Social Research (2013) argued that the most deprived areas in England were also those most affected by the welfare reforms brought in by the coalition government, noting that “The three regions of northern England alone can expect to lose around £5.2bn a year in benefit income”, whereas “Much of the south and east of England outside London escapes comparatively lightly.”

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Their analysis identifies that the areas of England most affected by welfare reforms (older industrial areas, deprived coastal communities, some London boroughs) fit the ‘traditional’ or well-known geography of disadvantage. In the older industrial centres the report suggests this is due to higher rates of incapacity and disability living allowance claimants, with often the same people affected by changes to both, as well as a higher reliance on tax credits and benefits in general. In London it argues losses are due in large part to housing benefit cap and reforms affecting private sector tenants.

The authors look at the impact of welfare reform by deprivation, finding a “clear and unambiguous relationship” between overall financial loss per working age adult to the % of LSOAs in most deprived 20% for each local authority.

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“Overall, for every ten percentage point increase in the share of neighbourhoods in the most deprived 20 per cent, the scale of the financial loss arising from the welfare reforms rises by roughly £60 per adult of working age.”

This relationship is perhaps not surprising as benefit claimant data is used for some of the indicators of IMD Domains. Areas that have a much higher claimant rate are also thus more likely to be ‘deprived’, and places with these high numbers of claimants will tend to be more affected than other places by changes to welfare.

The authors claim that budget changes will reinforce a ‘downward spiral’ in areas where loss of benefit income could impact on local spending and thus local employment. They suggest therefore that a key effect of welfare reform will be to widen the prosperity gap between the stronger and weaker local economies in England.

This shows how deprivation statistics are easily used as a shorthand for poverty and disadvantage in research, particularly by think tanks or academics concerned with benefits and poverty in England.

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