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Reports Show Austerity Is Hitting the UK’s Poorest Regions the Hardest

Reports Show Austerity Is Hitting the UK’s Poorest Regions the Hardest
Mon, 4/6/2015 - by Gabrielle Pickard-Whitehead

As wealth inequality deepens in the U.K., it’s the most deprived areas and the poorest households that are bearing the brunt of incessant austerity policies.

Recent research by the Institute for Fiscal Studies, examining how local public spending through the U.K. varies from region to region, revealed that the country's most deprived areas have been worst affected by the harsh austerity cuts.

The IFS research showed that since 2009-10, council (local authority) spending has been cut by almost a quarter on a per person basis. The poorest regions, which had experienced rapid population growth, saw the largest cuts, the study found.

“English councils – like many government departments in Whitehall – have experienced sharp cuts to their spending power over the last five years,” said David Innes, the author of the report.

“But the size of spending cuts have varied a lot across England. On the whole, it is more deprived areas, those with lower local revenue-raising capacity, and those that have seen the fastest population growth have seen the largest cuts to spending per person.”

The London boroughs have seen the biggest funding cuts per person on average, with as much as 31.4% reduced council spending. The North East and the North West of England have been victims of the second and third biggest funding reductions, with cuts of 26.5% and 25.7%, respectively.

A Call for Changes in Austerity Measures

The IFS has warned that regions with the lowest revenue raising will continue to be exposed to the heftiest cuts if policies aren't changed in the next government, which will be elected in May.

The IFS report follows earlier research that shows austerity is hitting Britain’s poor the hardest. In January, a report compiled by the Joint Committee on Human Rights analyzed the U.K. government’s compliance with the UN Convention on the Rights of the Child, and showed that migrant children are among the country's hardest hit.

Children from poor households have been “disproportionately harmed” by the U.K.’s austerity measures, the report said. Specifically, research revealed that migrant children were among those most affected by the government’s cuts to social services and benefits.

“Certain categories of children may have been protected from the worse impacts of austerity, but other groups – in particular migrant children, whether unaccompanied or not, and children in low-income families – have been hit by cuts in benefits and in the provision of services,” stated the JCHR report.

A cross-party committee of Members of Parliament (MPs) concluded that in order to soften the effect of austerity policies, the government should have monitored the impact of such measures more stringently.

Similar research made by the London School of Economics and the Universities of Manchester and York supports the findings that the country's poorest regions and households have borne the brunt of austerity.

The study, which looked at poverty levels in Britain during the last two years, found that the poorest 5% of the population had lost an average of nearly 3% of their income in recent years.

By contrast, the top half of income groups had gained overall. The report concluded that young families felt the pain of austerity the most intensely, through changes to benefits, tax credits and direct taxes that were predominantly regressive; lower income families lost more than they gained through increases in income tax thresholds.

“The effects of the coalition’s reforms were, in the main, the opposite of what they claimed – on average the poorer groups paid more than the richer ones as a percentage of their income,” said the report.

Calls for a Higher Minimum Wage

The alarming findings in the recent austerity reports have spurred some MPs to push for a higher minimum wage. The Coalition government accepted recommendations by the Low Pay Commission (LPC), an independent body that advises the government about the National Minimum Wage, to raise the minimum wage.

In October of this year, the national minimum wage in the U.K. will increase by 20 pence an hour to £6.70, translating to a 3% rise for some 1.4 million workers. However, even this moderate increase has been criticized by the opposition.

Chuka Umunna, the shadow business secretary, spoke about how the U.K. government failed to execute its much more generous minimum wage promises.

“This 20p rise falls far short of the £7 minimum wage which George Osborne promised over a year ago," Umunna said. "Ministers have misled working families who have been left worse off. Where under David Cameron we’ve seen the value of the minimum wage eroded, we need a recovery for working people.”

While an increase in the U.K.’s minimum wage might be an instrumental measure to help low income families meet basic living costs, the relentless cuts implemented by the Coalition Government since 2010 are arguably having the most significant impact on Britain’s escalating poverty.

This view is supported in a report by the Joseph Rowntree Foundation, an independent development and social research charity, entitled "The Cost of the Cuts: The Impact on Local Government and Poorer Communities."

The foundation used social care spending as an example of the uneven treatment by the central government which resulted in deprived areas suffering disproportionately higher levels of cuts.

According to the charity, social care spending, both for children and adult services, has actually risen in real terms in the least deprived areas by as much as £28 per head. By contrast, spending on social care has fallen sharply in more deprived areas by as much as £65 per head.

Richard Baker, a public sector worker in the High Peak in the north of England, where workplace earnings are less than the national average, believes the only way to help Britain’s deprived regions prosper is to put an end to uneven regional cuts, raise the minimum wage to a liveable salary, and ban exploitative zero hour contracts.

“It’s make or break time for Britain’s poorer communities on May 7 because the only way we’re going to see the disadvantaged areas become better off is if current policies are changed.”

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