Report finds deprivation diluted but experts say it doesn’t mean poverty has been reduced

A surge in the number of wealthy incomers moving into new-build apartments in regenerated neighbourhoods appears to be radically transforming the socio-economic profile of some of London’s traditionally most-deprived areas.

The high concentrations of deprivation found historically in the boroughs of Tower Hamlets, Westminster and Islington appear to be becoming significantly diluted, according to the latest official indices of deprivation in England.

In what may be seen partly as a gentrification effect, the latest data show just 1.4% of neighbourhoods in Tower Hamlets were in the 10% most deprived in England compared with 55% in 2004.

In Hackney, where nearly half of neighbourhoods were in the top 10% most deprived in 2004, just one in 10 now were. In Islington, where a third of neighbourhoods were classified as among the most deprived 15 years ago, 5% now were.

However, experts warned against seeing the data as evidence that that poverty and inequality had reduced in these areas, or that poorer people had been displaced in significant numbers.

Alasdair Rae, professor of urban studies and planning at the University of Sheffield, said the population of Tower Hamlets had increased by 100,000 since 2004. “There is no way that every person contributing to Tower Hamlets being one of the most deprived boroughs in the past has disappeared.”

A study by the Trust For London last year found that Tower Hamlets had the highest levels of child poverty in the capital at 43%, the highest rate of worklessness, and struggled with high levels of inequality.

The deprivation indices are used to target a range of funding streams, including EU regional development grants and dedicated schools grants, so any change in the deprivation profile of an area could have a financial impact on public services.

One inner London council leader said the deprivation data did not appear to reflect the reality of poverty in local communities or the pressure on local authorities who had to deal with its effects. “We haven’t noticed a drop-off in deprivation in the borough and the complexity of difficult cases gets worse.”

All three boroughs have been affected by the development boom around the City of London in recent years. Tower Hamlets covers the old East End of London, and includes much of the redeveloped Docklands area, including Canary Wharf. In Hackney and Islington, £1m properties sit among high concentrations of social housing.

As a counterpoint to the changes in London, the indices show the most dense concentrations of deprived neighbourhoods in England are still to be found in the post-industrial areas of the north and north east, such as Middlesbrough, Liverpool and Blackpool.

In Middlesbrough, nearly half of neighbourhoods are in the top 10% most deprived in the country. Nearly a quarter of the 94 neighbourhoods in Blackpool are in the most deprived 1% in England.

A cluster of local authorities in the north-west of England – Oldham, Rossendale and Burnley – are among a handful where there have been increases in the proportion of neighbourhoods that are in the top 10% deprived in the country.

The isolated Essex coastal village of Jaywick – which has become a vivid symbol of poverty and social breakdown in recent years – has been identified as the most deprived neighbourhood in England for the third successive time.

Giles Watling, whose Clacton constituency covers the area, said he was “very disappointed” by the report, saying there had been significant investment in Jaywick recently. “It is an area of truly outstanding natural beauty and the people there have a lot to offer – not least because of their strong sense of community. I truly want to see the area thrive.”

In its 1930s heyday, Jaywick was a holiday village built for East End car workers but its geographical remoteness hastened its decline in recent decades and it has become subject of a TV documentary and even a Republican party attack advert in the US. It was notably visited by the UN poverty rapporteur Phillip Alston a year ago.

The least deprived neighbourhood in England is an area close to the village of Prestwood, near Great Missenden in Buckinghamshire, and a few kilometres to the south of the prime minister’s country residence at Chequers.

The indices of deprivation measure seven domains of deprivation – including income, employment, health, disability, and education and skills, in each of 32,844 English neighbourhoods, called lower-layer super output areas, which are then ranked relative to other areas.

Unlike measures of poverty – which focus largely on lack of financial resources – deprivation indices assess how far neighbourhoods lack all kinds of resources, not just income.