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London's Poverty Profile 2021: COVID-19 and poverty in London

Author: WPI Economics, Trust for London

The 2020 headline London's Poverty Profile (LPP) report was published as the COVID-19 pandemic was beginning to take hold. A year on, life has fundamentally changed. Well over 100,000 people across the country have lost their lives to the virus and three national lockdowns as well as constant restrictions on work and social activity have impacted very heavily on our economy and living standards. The 2021 headline LPP report takes stock of what we know so far about the impacts in London.

London has been hit particularly hard compared to many other parts of England, both in terms of its citizens’ health and its economy. The report also shows those living on the lowest incomes in the capital are most likely to have been hit hardest. This can be seen across a range of indicators. For example, infection rates and mortality are higher in more deprived neighbourhoods, and those living on the lowest incomes are most likely to have been furloughed or lost their jobs.

While government support has protected many families to some extent, more Londoners are now subject to the benefit cap, and food banks across the capital have increased the number of packages provided by 128% over the course of the last yearAs the COVID-19 vaccine continues to be rolled out, and national and local policymakers turn their attention to economic and social recovery, these findings provide a stark baseline against which the success of policies can be judged.

At the time of writing (March 2021), more than 100,000 people across the UK have tragically lost their lives. In London alone, more than 17,000 have died. The human costs of this are immeasurable.

COVID-19 infections have not been evenly spread across London’s population

COVID-19 infections have not been evenly spread across London’s population. In fact, the rate of positive tests between July 2020 and March 2021 [1] was a third (35%) higher in the most deprived 20% of London neighbourhoods, compared with the least deprived 20% of neighbourhoods.

[1]At the time of writing, this was the earliest point from which the data was available from coronavirus.data.gov.uk at middle layer super output area level.

Restrictions to slow the spread of the virus, as well as the impact of the pandemic itself, have had a seismic impact on the UK’s labour market and London has not been immune to this.

Not all jobs have been protected by home working and the furlough scheme

While the government’s schemes have protected many jobs, the scale of the economic impact of the pandemic has still had a significant effect on employment in the capital. In February 2021, the number of jobs – as measured by Pay As You Earn (PAYE) data – had fallen by 5% in London since February 2020. This equates to just over 209,000 fewer jobs and takes the number of payrolled jobs in the capital back to a level last seen in October 2016.

The fall in payrolled jobs has also been larger in London compared to the rest of England, which saw a 1.9% fall between February 2020 and February 2021.

The combined health, economic and social impacts of the pandemic have taken a significant toll on the living standards of Londoners. Tracking these impacts will take time, as data is released with a significant lag, but all the indicators point to these impacts being greatest for Londoners with the lowest incomes.

More Londoners are now relying on food banks

Despite respite for some Londoners from the pressures of housing costs, another clear sign of the financial pressures that the pandemic has placed on families is the number of people having to rely on food banks to put food on the table. In the six months to September 2020, food banks run by members of the Trussell Trust network in London distributed 210,000 food packages to people in the capital, a 128% increase compared to the same period in 2019. The increase in the rest of England was 56%, demonstrating the severe financial pressures being placed on families in the capital.


April 2021

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16 April 2021

London's Poverty Profile 2021: COVID-19 and poverty in London