Understanding the drivers of poverty in London

Policy in Practice is delighted to have been awarded a policy research grant by Trust for London to analyse the impact of welfare reform on over half a million low-income households across London, over a period of almost two years.

Using councils’ anonymised household level data, we’ll track the impact of welfare reforms and rising rents across London. We’ll identify the characteristics of households in poverty, and reveal why some are able to escape, and others aren’t.

We aim to show the impact that government policies are having, and which local support programmes are most effective at tackling poverty in London. This post summaries the project and feedback from our first steering group meeting.

Low income Londoners and welfare reform

Housing benefit and council tax support data yield an incredibly rich insight on the demographic and economic circumstances of low income families. The granularity of this data applied to the London-wide scope of the analysis make of this project the first of its kind.

This approach will help us to:

• Understand whether government policies have achieved their objectives
• Identify the most effective localised interventions and share good practice
• Move away from reactive analysis (i.e. ‘376 households have been affected by the benefit cap in Lambeth’) toward a predictive approach (‘560 out-of-work families in East London are likely to end up in temporary accommodation’)

To date, the project has generated a great deal of engagement and enthusiasm. Over half of all London boroughs have already committed to contributing their anonymised household level data to the project and we’re confident more will join over the coming weeks. Find out if your London borough is already involved.

Building the case for better use of data with central government

For Policy in Practice and Trust for London, the central aim of this project is to show central and local government exactly what is possible with household level data, and to build the case for better use of household level data across central and local government under Universal Credit.

As part of this project we are engaging with the Greater London Authority and the Mayor’s Office to show what a joined up approach at the city level can achieve in devising and delivering better support policies. At the same time, we have also been asked to send a briefing note to DWP special advisors on this project.

Each London Borough is different

The round table discussion that followed the official launch of the project on Thursday 15 December showed that each London borough faces a different set of challenges and opportunities. These differences were identified during the first steering group, a summary of which are shown below, ensuring that the project tackles head on some of the key challenges to the provision of welfare in the capital and beyond.

National issues identified

1. Affordable housing

A lack of affordable housing emerged clearly as one of the key challenges, specifically rising rents across London, the costs of the housing crisis to families, and to local authorities that are left plugging the gap, and the rising cost of temporary accommodation.

The project will track:

• Rising rents for low-income households across the capital, to show where rents are rising fastest across the capital.
• The gap between rents charged, and housing benefit to show which families are feeling the squeeze.
• The increasing number of households needing temporary accommodation and new estimates of these costs to show the impact on local authority funding requirements.

By looking across the capital, we hope to identify what measures have the biggest impact in controlling rents and reducing homelessness.

2. In-work poverty

The labour market is changing, with a growing number of households in work struggling to make ends meet. Yet our discussion showed that the in-work cohort are a group that local authorities struggle to identify, and have limited contact with.

This project will track and identify:

• In and out of work fluctuations among families.
• Rising number of self-employed households
• Households with fluctuating hours and earnings
• Household working part time vs households working full time.

By identifying these households, and tracking them over time we hope to better understand how the labour market is changing across London, and for whom.

3. Other national issues

The discussion identified a number of issues that were raised by individual local authorities. We may not be able to tackle each individual issue identified below, but will carry out our research with a view to identifying trends that become apparent in the data.

These issues included

• The number of households claiming Employment Support Allowance has increased significantly year by year, bringing with issues around the work capability assessment process for low income households.
• Universal Credit payments and arrears as a consequence of delays in the initial payment, or because of direct payments to claimant households.
• The correlation between low income households and health issues, in particular the impact of welfare reform on households with health conditions.
• The impact of government policies on child poverty.

London issues identified

1. Childcare

Childcare was identified as one of the main barriers to independence for many households, but there was a limited understanding of how the provision of childcare in the capital was being mapped against need. Best practice in childcare provision was also poorly understood, and local policies in childcare provision seemed to vary from borough to borough.

2. Private rented sector housing

The supply of private rented accommodation varies across the capital, but the lack of provision for low income households is universally seen as an increasing challenge. There was hope that the pan-London approach taken by this project might lead to a joined up approach to private housing allocation, and its provision to households on low incomes.

There was a need for a greater understanding of how the private rented sector conducts evictions, the impact of more families in need moving across boroughs and within London, and the knock-on consequences for resources across councils.

3. Discretionary support payments

The discussion covered a growing number of discretionary payment allocated by local authorities, with a focus on discretionary housing payments (DHPs). Councils wanted to better understand the profile of households who might need DHPs, and what happens to households that get them, versus those that don’t. They wanted a better understanding of how DHPs are allocated across boroughs, to see if they are having an impact on household behaviour, and how households that aren’t applying for support are coping.

How to get involved

The Low Income Londoners project will run from January 2017 through to the first half of 2018. Three rounds of data will be collected from participating London councils over this period of time, in February 2017, June 2017 and October 2017.

The findings of the analysis carried out will be presented in a final comprehensive report that will be published upon completion of the project in mid 2018. Prior to that, a series of shorter publications will be released at key stages in the project.

The project Steering Group will meet in May 2017, September 2017 and January 2018 when members will hear initial findings and have the chance to shape and review the focus of the analysis.

We want all London councils to take part to this project. The potential insights gained are directly proportional to the number of datasets we can include, and the greater the buy in from individual councils, the greater our collective influence on central government will be.

If you are a London council and would like to be a member of the Steering Group please sign up us as soon as possible.

If you are already a member of the Steering Group please ask your neighbouring authorities to join too, and tell colleagues in housing, children’s services and other departments about the analysis coming your way.