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Pulling in the same direction? Economic and social outcomes in London and the North of England since the recession

Obolenskaya, Polina, Lupton, Ruth and Provan, Bert (2016) Pulling in the same direction? Economic and social outcomes in London and the North of England since the recession. Social policy in a cold climate working paper (SPCCWP23). Centre for Analysis of Social Exclusion, The London School of Economics and Political Science, London, UK.

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Abstract

There is an overall continuing disparity of economic performance between London’s growth and slower growth in the North of England (defined here as including the North West, North East, and Yorkshire and the Humber). This is mirrored by parallel disparities in some social outcomes (health, education and early years) between these regions, also showing London as a whole doing better than the Northern regions. The wider impact of the economic crisis has been to increase inequalities between and within regions, including significant new inequalities of economic and social outcomes within London, and in particular for London’s lower income groups. “Austerity” cuts to public services expenditure have hit both London and the Northern regions particularly hard and there are some signs of its increasing pressure on the delivery of services. Within this overall context, some main points stand out:  London has shown a faster recovery from the recent recession compared to the regions in the North of England in terms of GVA (Gross Value Added) - London’s GVA continued to increase rapidly after 2008 while the three Northern regions of England experienced the worst decline.  London saw a sharp rise in employment rates among its working age population following the recession, overtaking Northern regions and no longer remaining the region with the lowest employment rate, as it was pre-recession (in 2007).  There has been a marked reduction in public service jobs in the North and a rise in London, with private sector jobs picking up some of the slack in the North West.  A sharp rise in house prices and private rent costs in London was not accompanied by an increase in earnings. On the contrary, real earnings in London and other regions fell between 2007/08 and 2013/14. Additionally, real net household income (after housing costs) fell particularly sharply in London, especially among the least affluent. The overall effect has been an increase in inequalities in net income after housing costs within London and parts of the North since 2007. In London this resulted in a 18.3 percentage point reduction in income after housing costs for the poorest 10%, and an increase in the adjusted 90:10 income ratio from 8.4 to 9:1.  The demographic profiles of London and the North are very different which means these regions are faced with contrasting pressures: an increasingly elderly population in the north, but a younger population in London.  Social outcomes have mostly diverged between London and the North since the recession, with London showing greater improvement. A higher proportion of children living in London are achieving “good development” measured by the Early Years Foundation Stage Profile, and there is a smaller gap in development between pupils who are eligible for free school meals and those who are not. A larger proportion of children living in London gain 5 or more A*-C GCSEs compared to those living in the North. Moreover, London residents are better qualified and have seen bigger health improvements in terms of the prevention of killer diseases, better mental health, fewer suicides, and being less disabled when elderly.  Nevertheless, housing and economic inequalities in London mean that not all Londoners benefit equally. Homelessness has grown much faster in London, there is more housing overcrowding, and many adult social care indicators are worse. After housing costs poverty rates for all people remained at the same in London between 2005/06-2007/08 and 2011/12-2013/14 whereas they have improved in other regions, including the North of England. There was also a greater improvement in after housing cost poverty rates for children in the Northern regions compared to London during the same time period. Following growth in total public spending on services across all regions up to 2009/10, both the North of England and London saw sizeable reductions in total public spending on services from 2009/10 onwards, with expenditure per head being particularly squeezed in London, including in the protected areas of public spending.  Strains on services are seen in healthcare, with increased waiting times in both London and the North, but particularly in London

Item Type: Monograph (Working Paper)
Official URL: http://sticerd.lse.ac.uk/case/
Additional Information: © 2016 The Authors
Divisions: STICERD
Centre for Analysis of Social Exclusion
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HN Social history and conditions. Social problems. Social reform
H Social Sciences > HT Communities. Classes. Races
Sets: Collections > CASE Social Policy in a Cold Climate
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Research centres and groups > Centre for Analysis of Social Exclusion (CASE)
Date Deposited: 16 Jan 2018 11:14
Last Modified: 24 Feb 2019 00:04
Funders: Joseph Rowntree Foundation, Nuffield Foundation, Trust for London
URI: http://eprints.lse.ac.uk/id/eprint/86448

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