28% of Londoners 'in poverty'

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City of LondonAlthough London is leading the country out of the recession it is not lifting Londoners out of poverty, according to a new report.

The capital has problems with child poverty, young adult unemployment, low pay and high housing costs, says the fourth edition of London's Poverty Profile, produced by think tank the New Policy Institute, and commissioned by Trust for London, an independent charitable foundation.


The study shows that 28% of people in London are in poverty, seven percentage points higher than the rest of England, and that of the 20 English local authorities with the highest levels of child poverty, seven are in London.

The unemployment rate in London at 7% is still higher than the England average, while in the 'Olympic boroughs' of Barking & Dagenham and Newham it is 10%, higher than any of the major English cities.

The situation is worse for young adults. London attracts increasing numbers of young people seeking opportunities. The number of 16 to 24 year olds living in London has now reached one million but u nemployment for this age group has risen from 15% to 25% in the last 10 years.

The high costs of housing mean that benefit cuts will be much deeper in the capital. Even at the lower end of the market, rents in London are twice as high as the England average. Average monthly rents are £475 in England compared to £950 in outer London and £1,300 in inner London.

A quarter of all households in London rely on housing benefit to meet their housing costs, compared to a fifth in England as a whole. Housing costs are not just problems for those in the centre of London without a job: 50% of housing benefit claimants live in outer London and 40% are in work.

The level of rents combined with the restrictions on housing benefit mean that large parts of London are now unaffordable to low-income households.

Bharat Mehta, chief executive of Trust for London, said: " London's economy may be doing better than the rest of the country but that obscures the fact it has the highest poverty rate.

"Londoners are trying hard but are getting stuck; with many being impacted by high housing costs and housing benefit reforms, unemployment and low pay.

"To tackle London's poverty and inequality policymakers must focus on solutions such as building more affordable housing and encouraging employers to pay a Living Wage."

Hannah Aldridge, author of the report, said: "The London most visitors see - the West End, Westminster, the City - has ever less of its poverty. The London they don't see has ever more. More likely to be in work and living in private rented accommodation, London's poor lead ordinary lives which are hidden from view by the extraordinary images conjured up by the Shard and the City.

"London's low income households are in a precarious position. The benefit restrictions that have been introduced take no account of the high cost of renting in London. Most of London, and not just its fashionable bits, is now unaffordable for households in the private rented sector and without work. If poverty in London falls it may well be because the poor are being forced out."