Newham council’s scheme to tackle unemployment and skills shortages has helped it go from being the second poorest local authority in England to the 25th

In the late 19th century, the Victorian Charles Booth mapped poverty across London, circling Newham, in the east, black as one of the city’s worst neighbourhoods. “Lowest class; vicious, semi-criminal,” he said. Throughout the past century, Newham’s poverty has persisted, but something has changed in the past five years. In the latest English indices of deprivation, published last year, the borough went from being the second most deprived local authority in England to the 25th. This huge fall is part of a wider trend across east London, where a handful of districts saw huge reductions in relative deprivation.

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London’s eastern boroughs are rapidly changing as rising rents and house prices edge people out of the capital’s core and into the traditionally less expensive eastern outskirts. Many analysts point their fingers at these gentrifiers displacing poorer residents. But the data for the indices was collected between 2011 and 2013, before visible signs of gentrification had began to emerge. And data in Newham suggests this isn’t a simple case of social cleansing.

Newham council fought hard for strong local employment quotas in the 2012 London Olympics regeneration projects in the borough. “Newham was quite successful in getting a large proportion of the local workforce into these jobs,” says Oliver O’Brien, who researches London demographic changes at the Consumer Data Research Centre. “It may be that beyond the Olympics the effect has remained and that has helped with jobs in the borough.”

Newham’s politicians attribute much of the success to a reimagined jobs scheme, which expanded its focus from jobless residents to include the needs of local employers. Until 2009, the council ran a conventional jobs programme: it advised residents on their CVs, pointed them to job postings, and sent them on their way. But only 2% of clients found jobs through this route. The revamped Workplace scheme hired more than a dozen managers to embed in the offices of major local employers and helped them identify and hire Newham residents. Now, 80% of clients who apply for jobs via Workplace are successful – that’s 4,500 residents matched with employers each year.

The Workplace scheme is the single best response to the government’s benefit cap Sir Robin Wales

Robertas Draseika, 29, is one such resident. He had worked at a UK cleaning and hygiene supplies firm, driving a lift truck around its Stratford warehouse. But he couldn’t see much scope for career progression.

In 2008, he approached Workplace to see if he could develop his skills, which would allow him to apply for better paying jobs in the sector. “In the warehouse, I was a lift driver, but a little tiny one,” he says. “I thought I could drive a bigger machine, a huge machine – a forklift.”

Workplace arranged for Draseika to undergo council-paid training courses, and his adviser connected him with Workplace managers on the construction sites of private companies. While Draseika’s Workplace adviser prepped him for interviews, the embedded staff screened his applications and put him forward to employers looking for his skillset. Within months, Draseika began driving forklifts for a building consultants and his monthly salary rose £500.

After taking more training courses through Workplace – from excavation to managerial skills – he now works as a logistics supervisor for a construction company, overseeing the materials on new glassy office buildings that form part of the Olympics regeneration project. Draseika manages a dozen other construction workers who have also come to the company through Workplace.

Improvement in income is one of the main drivers of Newham borough’s fall in the deprivation rankings, which the government measures using data on income, employment, health, education, housing, crime and living environment. The rise in income in Newham is in line with Workplace’s success in boosting employment and helping clients like Draseika progress their careers.

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Yet despite guiding nearly 30,000 residents into jobs, some worry that Workplace excludes Newham’s poorest residents, who have little or no work experience. Keith Fernett, who runs the Newham homeless charity Caritas Anchor House, says Workplace used to run basic skills training for his clients, but it scrapped the courses in favour of training that is tailored to the needs of employers.

For homeless residents like Richard McDonald, who has fought depression since his mother’s death last year, stabilising his mental health comes first, and work will follow. “People who are working are earning a pound and getting themselves sorted, and they don’t need as much help as people who aren’t working and are properly sick,” he says. “So maybe the council’s got their priorities upside down.”

Newham’s Labour mayor, Sir Robin Wales, defends the £6m a year Workplace scheme as the most effective tool to tackle poverty with the little money he has. He reasons that with the government cap on benefits making rents increasingly unaffordable for low-income households, helping them to earn more will make them more able to continue living in the borough. “Workplace is the single best response to the government’s benefit cap,” says Wales.

Workplace is far more successful than the government’s own Work Programme to get the unemployed into jobs. Eighty percent of Newham residents who find jobs through Workplace sustain employment for at least six months, compared with 52% in the government’s Work Programme across London, according to a 2011 report. During the recession, unemployment in the borough increased at a lower rate than the average in London and at a significantly lower rate than the rest of England.

But with the council facing huge government cuts, schemes targeted at reducing poverty, like Workplace, may be at risk. A spokeswoman for Newham council says: “We will look at how we can continue to fund Workplace when we set our budget for the upcoming financial year, and we remain committed to providing the services that matter most to our residents.”

Draseika, whose salary has tripled since he first joined the scheme, has nothing but praise for Workplace’s approach: “It’s not just one-off training and then they try to get rid of you. It is working on you until you find a company that will accept you.”