New poverty report shows London and low-income communities disproportionally affected by COVID-19

The impacts of COVID-19 have particularly hit London as well as individuals, families and communities that were already struggling the most prior to the pandemic, according to figures released today in London’s Poverty Profile report.  

Commissioned every year by Trust for London and WPI Economics, London’s Poverty Profile provides evidence and insight on poverty and inequality in London. This year’s report looked at the distribution of health impacts, as well as considering how work, living standards and wellbeing have been impacted.

It shows that London has been hit particularly hard, both in terms of citizens’ health and its economy, compared to other parts of England. It also reveals that those living on the lowest incomes in the Capital have been disproportionally affected.

The disproportionate impact on London

Key findings

London has the highest rate of deaths out of all the English regions

After adjusting for differences in age, London has the highest regional COVID-19 mortality rate in the UK (263.8 per 100,000 people). The North West had the second highest age-adjusted mortality rate: 231.2 per 100,000 people.

The fall in payrolled jobs has been larger in London (5%) compared to the rest of England (1.9%)

At the start of 2021, the number of jobs - as measured by Pay as You Earn (PAYE) data - had fallen by 5% in London since February 2020. This equates to nearly 209,000 fewer jobs and takes the number of payrolled jobs in the capital back to a level last seen in October 2016. The fall in payrolled jobs has also been larger in London compared to the rest of England, which saw a 1.9% fall between February 2020 and February 2021.

Figure 14: Percentage change in PAYE jobs compared to February 2020 (February 2018 - February 2021 (Feb 2020 = 0))

More Londoners are now relying on benefits to make ends meet (44% increase)

Overall, more than 1.54 million working-age Londoners were claiming benefits in August 2020 (a rise of 44% compared to August 2019). There were 840,927 working-age women claiming some form of working-age benefit (an increase over the year of 33%), compared to 702,862 working-age men (a 58% increase).

Figure 22: Number of Londoners aged 16-64 on benefits (August 2014 - August 2020)

More Londoners have accessed food banks, compared to the rest of England

In the six months to September 2020, food banks run by members of the Trussell Trust network in London distributed 210,000 food packages to people in the Capital; a 128% increase compared to the same period in 2019. The increase in the rest of England was 56%, demonstrating the severe financial pressures being placed on families in the Capital.

Figure 26: Food packages distributed by food banks to adults and children (April-September 2019 and April-September 2020)

The disproportionate impact on London’s most deprived communities

Key findings:

COVID-19 mortality rates disproportionally affected deprived communities

While communities across London have been impacted, the overall direct health impacts of COVID-19 have not been evenly spread; as well as the disproportional impact on older people, morbidity and mortality have been higher amongst people living in deprived areas and people from Black and Minority Ethnic backgrounds. Even after controlling for a range of neighbourhood characteristics, mortality rates are 23% higher in the 20% most deprived neighbourhoods than in the least deprived neighbourhoods in London.

Low-income Londoners have been hard hit by employment impacts

Londoners in more deprived areas have consistently had higher furlough rates than less deprived areas. The 20% most deprived constituencies in London had an average furlough rate of 19% in January 2021, compared to 15% average for the least deprived 20% of constituencies. As well as significant financial pressures, the pandemic has also placed other pressures on families. For example, during the periods of the year when schools were forced to close, many Londoners had to juggle home-schooling, childcare and work. Overall, Londoners with children spent 15.6 hours a week on home-schooling and childcare in April 2020. Women spent more time than men on home-schooling and childcare, spending an average of 19.1 hours a week on these activities.

However, there has been some good news.

Number of people seen sleeping rough fallen by 59%

In March 2020, the Government also launched the 'Everyone In' programme, working with councils, homelessness charities and hotel chains to accommodate people who were sleeping rough and at risk of sleeping rough. The effect of that is likely to be reflected in the fall seen in the annual count of rough sleepers that takes place every autumn. In 2019, 1,136 people were seen sleeping rough on a single night in London. By autumn 2020, that had fallen by 59% to 714. A similar proportional fall was seen in the rest of England.

78% decrease in repossessed homes

The Government legislated to ensure that in most cases, landlords cannot serve eviction notices to tenants who are behind with their rent. This led to a large reduction in repossessions in 2020 (falling from 8,639 in 2019 to 1,919 in 2020).

Figure 25: Types of court repossession in London (2003 - 2020)

London’s Poverty Profile has been tracking poverty and inequality in London since 2009. This last year has been immensely challenging for everyone. The impact of the pandemic on London has been profound and the economic and health burdens have not been shouldered equally. Covid-19 has put a spotlight on the economic insecurity that many in our city live with and brought conversations about poverty to the fore. Londoners have been hard hit by employment impacts, food insecurity, and increased debt. Yet, we have also seen communities come together, as well as develop innovative partnerships and solutions. As we emerge from the crisis, we must all work together to ensure that no one has to live a life of poverty, and that social and economic prosperity is shared more equitably. More needs to be done to tackle systematic disadvantage faced by certain groups in our city.
Bharat Mehta, Chief Executive at Trust for London
COVID-19 has laid bare the significant economic and social inequalities in our city. Our work shows the economic consequences of Covid-19 have been felt most acutely by individuals, families and communities that were already struggling the most prior to the pandemic. As the country emerges from this crisis, these inequalities must be tackled and the opportunity to remake society and build a better future grasped. Inequality is bad for everyone: together we can make a fairer London for all. Tracking the full impact of the pandemic will take time, as data is released with a significant lag. We will continue to track the impacts via London’s Poverty Profile.
Matthew Oakley, Director at WPI Economics and author of the report