Poverty in outer London doubles in 15 years, report finds

Poverty and inequality is moving from inner London to outer London, with 1.4 million Londoners in poverty now living in the outer ring of the capital, a new report has found.

The left-wing think-tank the Smith Institute has found that over 60% of Londoners living in poverty are now based in outer London boroughs, which include the likes of Barking and Dagenham, Barnet, Croydon, and Harrow.

The report, titled The unspoken decline of outer London: Why is poverty and inequality increasing in outer London and what needs to change?, has found that a ‘city-centric’ approach to economic development is pricing Londoners out of inner London, which is increasingly home to better job opportunities and ever-rising rents.

The institute has urged the Mayor of London Sadiq Khan and the capital’s policy-makers to act to tackle inequality in the capital, such as by spending the £30m funding intended for Crossrail 2 on reducing poverty and delivering equal growth instead.

Paul Hunter, deputy director at the Smith Institute and author of the report, said: ‘London is becoming a divided city. The trickle out economics of city centred growth and turbo charged house prices is not working for outer Londoners on low incomes, who struggle with housing affordability issues and access to good jobs.’

According to the report, outer London is now home to 60% of all Londoners living in poverty, meaning they have an income lower than 60% of the median household income.

This 60% figure – amounting to 1.4 million people – has almost doubled in the last 15 years, as only 32% of people in outer London lived in poverty in 2004.

A rise in housing costs and recent welfare reforms have also forced more low-income Londoners into the private housing sector, leaving them at the ‘sharp end’ of the housing crisis, with housing benefit claims in outer London 17% up.

With 159,000 people in outer London unemployed and unemployment falling at a lower rate than in inner London, and low pay rates a third higher, the report warns that outer London may not have the resilience to achieve growth if there is an economic downturn.

This, Hunter says, is why the institute is calling for new policies and funding focusing investment in outer London, enabling Londoners to benefit from better-paid work and shorter commutes.

‘We are calling for a more balanced approach to economic development in the capital,’ he said. ‘This would mean reassessing infrastructure and regeneration projects to help spread growth across the capital with a much greater focus on tackling poverty and inequality.’

Whilst recommending a review of Crossrail 2 funding, the Smith Institute has urged Khan to set up an ‘Outer London Inclusive Growth Taskforce’ to focus on reducing inequality and increasing opportunity.

The report also suggests that outer London get ‘first dibs’ on new housing and jobs, and even that the GLA and boroughs pilot ‘affordable housing zones’ in the outer boroughs where house prices are continually kept at a low level.

The government will now face pressure to give the London mayor powers to introduce rent controls, a policy which will form a key part of Khan’s 2020 re-election bid.