Memo for the new Mayor of London: four things to reduce poverty

9th May 2016

Alvin Carpio explores what the new Mayor of London should be focussing on in his first 100 days.

London is one of the richest cities in the world, but it also holds some of the UK’s poorest communities. Over two million people live in poverty in the capital. The rising employment rate has been one of the success stories of recent years and now sits at 74%, but more than half of those in poverty live in a household with at least one person in work. The cost of housing is a major cause of in-work poverty, with a quarter of a million children living in poverty in privately rented homes, which is estimated to rise to a million in a decade. To build a prosperous city without poverty, we need more secure jobs that allow people to progress out of low pay and the cost of essentials such as rent must come down. In his new role, the Mayor of London is central to its success.

To reduce poverty and deliver inclusive growth for all, JRF evidence shows that the new Mayor should:

  1. Champion Living Rents, which would peg social rents to local earning levels and enable social landlords to build more genuinely affordable homes. Under our proposals, rents would be set to 28% of local average lower quartile earnings, providing a genuinely affordable rental option for low-income Londoners, releasing pressure upon the private rented sector.
  2. Create job opportunities using procurement budgets. The Greater London Authority (GLA) has a significant public procurement budget. This could be used to create jobs-with-training for people furthest away from the labour market including young people from disadvantaged areas, the long-term unemployed, and people with disabilities. JRF’s social clause procurement model demonstrates how contracts could create one job-with-training for every £1 million spent. Local authorities across the UK have piloted this model in projects totalling £760 million. If the Mayor made this model standard practice for the GLA, this could create hundreds of jobs per year for the most excluded.
  3. Work with pensioners and health and service providers to improve take-up of entitlements such as Pension Credit. Take up of some benefits by older people remains low. DWP statistics published in 2014 show that more than a third of pensioners who are entitled to Pension Credit are not receiving it. The Mayor could reduce poverty among older people at minimal cost by implementing a city-wide marketing drive and a benefits training programme for service providers who have regular contact with older people, especially GPs, nurses, housing and advice providers, with a view to improving take-up of entitlements.
  4. Convene a taskforce on in-work poverty. We recommend that the Mayor uses his power as a convenor to set up a taskforce on in-work poverty in London. The taskforce should include representatives of employers and trade unions, particularly in the retail, catering and care sectors where average pay is low. The taskforce could look to develop sector-specific strategies that encompass workforce pay, productivity, and progression.

Tackling the high levels of poverty in London requires a comprehensive and sustained approach that involves different departments in the GLA, employers, and civil society working together. The new Mayor has a major role to play in leading the city’s progress on solving poverty.

Read JRF’s manifesto briefing for London, A London without poverty