Using household-level data to understand the drivers of poverty in London

How are low income Londoners being hit by welfare reforms? Policy in Practice embarks on a two-year project tracking half a million households in the capital to find out how factors such as housing, jobs and childcare help or hinder poverty.

Policy in Practice have begun a ground-breaking project with the support of Trust for London, aimed at understanding the drivers of poverty in London. The project, entitled ‘Low-income Londoners and Welfare Reform’, will track over half a million low-income households, identifying the impact of welfare reforms and other government policies over the course of almost two years.

Using anonymised household level data, this project will allow us to identify which local support programmes are most effective at tackling poverty in the capital. By tracking households over time, we hope to begin to understand why some are able to escape poverty, and others aren’t.

Household level data across London

Policy in Practice works with Housing Benefit and Council Tax Support data. This is an incredibly rich source of information on the characteristics and economic circumstances of each low income family within a borough and it forms the basis on which Housing Benefit is paid. The information is gathered for reporting to the Department of Work and Pensions.

Data protection and security are of upmost importance to us; all local authorities sign a data sharing agreement and we comply fully with data sharing regulation.

The data is updated monthly and standardised, and shows a range of characteristics, including the housing sector of individuals, as well as detailed information on disability, and economic status, including their various sources of income.

Such data gives us a thorough picture of households and their circumstances. It will allow us to understand where a household is losing income and assess which policies are affecting them. We will, for example, be able to show whether single parents are struggling more than other families with children, or whether future changes in policies will affect private renters disproportionately over other tenure types.

Time-series data will enable us to track how the circumstances of individual households change over a two-year period, allowing us to analyse poverty trends in London. In addition it will be possible to identify predictors of crisis, such as the circumstances that force a household into temporary accommodation, which can help councils to target support to families in similar situations before they face crisis.

Similarly, our welfare policy modelling engine allows us to understand the combined impact that policies from four different government departments have on each single family. This is the first project of its kind to utilise these methods to track poverty.

The analysis

By using Housing Benefit and Council Tax Support data this project will be able to:

  • Understand whether government policies have achieved their objectives
  • Identify the most effective localised interventions and share good practice
  • Move away from reactive analysis, towards a predictive approach. For example, knowing which types of household characteristics are most likely to end up in temporary accommodation.

To ensure that we tackle head on some of the key challenges faced by Londoners, the project will focus on the following issues:

Government policies

Understand whether government policies have achieved their objectives

Localised interventions

Identify the most effective localised interventions and share good practice

Predictive approach

Move away from reactive analysis, towards a predictive approach. For example, knowing which types of household characteristics are most likely to end up in temporary accommodation.

To ensure that we tackle head on some of the key challenges faced by Londoners, the project will focus on the following issues:

1. Affordable housing and the cost of the housing crisis on families and local authorities

Showing where rents are highest and rising, where housing benefit falls behind rental rates the most and trends in use and cost of temporary accommodation.

2. In-work poverty and the changing nature of employment habits among low income Londoners

The project will track movement of households between employment and unemployment, trends in self-employment and changes in working patterns (including hours and earnings).

3. Barriers to work and, specifically, the provision of affordable childcare

Childcare has been identified as one of the main barriers to financial independence for many households. The analysis will show whether provision of childcare corresponds to need, and assess local policies in childcare. To date, the project has generated a great deal of engagement and over half of all London boroughs have already committed to contributing their anonymised household level data to the project.

Low- income Londoners and welfare reform
Image: Low-income Londoners and welfare reform

How to get involved

The Low Income Londoners project will run from January 2017 through to April 2018. Three rounds of data will be collected from participating London councils over this period of time.

The findings of the analysis will be released periodically, with a set of preliminary publications made available in mid-2017, followed by a comprehensive report that will be published upon completion of the project in mid-2018.

The project Steering Group will meet three times over this period 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 in this project. The greater the buy-in from individual councils, the greater our collective influence on central government will be. If you work for a London council and would like to learn more about the project, please contact giovanni@policyinpractice.co.uk, if you would like to join the Steering Group please sign up us as soon as possible.

About Policy in Practice

Policy in Practice is an independent social policy software and consulting business, founded with the belief that the welfare system can work more effectively.