Fewer unemployed everywhere, but inequality widens between areas

An in-depth analysis for the Joseph Rowntree Foundation of local and regional changes in the numbers claiming Income Support and income-based Jobseeker’s Allowance shows that the impact of economic recovery between 1995 and 2000 was not shared equally:

• The number of people in England claiming means-tested ‘out of work’ benefits fell from 4.8 million in 1995 to 4.1 million in 1998 and 3.8 million in 2000. Just over half those who claimed benefits in 1995 were no longer doing so in 2000. Unemployed claimants leaving benefits explained most of the decline in all areas. However, the rate of recovery varied widely between regions and within them. The decline in claims was slowest in manufacturing, industrial and former mining areas.
• Some types of claimant, including lone parents, were less likely to leave benefit than the unemployed. But while the rate at which lone parents left benefit accelerated after 1998, the number of disabled claimants actually increased. People in their fifties accounted for much of this growth.

The researchers at the University of Oxford and the London School of Economics found that low local rates of leaving benefits were associated with multiple deprivation, including long-term unemployment, ill health and low educational attainment, as well as an older average age among local people who were out of work.

Lone parents, but not disabled people, were less likely to leave benefit if they lived in a local authority ward with a high concentration of claimants. The proportions of unemployed claimants who left benefit during the five years covered by the study was highest in the South East, South West, East and London, and lowest in the North East, North West, Yorkshire and Humber and the West Midlands. A similar regional pattern applied to lone parents, with the exception of London where the percentage leaving benefit was lower than anywhere else. However, the capital had the highest ‘exit rates’ among disabled people. The lowest rates were in the East and West Midlands, North West and North East.Martin Evans, Senior Research Fellow at the University of Bath and co-author of the report, said: “Not only has every area benefited from economic growth, but the 20 per cent of areas with the highest proportion of claimants have contributed most - over half - to falling unemployment. Even so, they have been left behind because benefit claims in other areas fell faster. This means that England is both ‘growing together’ and ‘growing apart’. What we see in the study are the ways that geography and individual circumstances overlap to produce results that defy simplistic analysis. For instance, we find much evidence to support a growing ‘North-South’ divide, but it is not the whole story by a long way.”