EUKN - United Kingdom - The economies of deprived neighbourhoods

The economies of deprived neighbourhoods - UK

Introduction

The United Kingdom (UK) Department for Communities and Local Government has reviewed three recent research studies exploring the economies of deprived neighbourhoods. The studies analyse the overall economic dynamics of deprived neighbourhoods, worklessness in deprived neighbourhoods and the role of informal economic activity in such urban areas. Even though the focus of the study is on deprived neighbourhoods in the UK, it offers valuable insights to all policy makers. The economic, social and territorial relations that determine the enduring existence of concentrated poverty can be found in almost any European city.

Description

The report provides a synthesis and summaries of three three recent research studies exploring the economies of deprived neighbourhoods:

“Dynamics of local economies and deprived neighbourhoods”
“Worklessness in deprived neighbourhoods: a review of evidence”
“Informal economic activities and deprived neighbourhoods”.

The three studies summarised in "The economies of deprived neighbourhoods" review evidence concerning the economies of deprived neighbourhoods. It covers the overall dynamics of local economies and provides detailed evidence concerning skills, worklessness and the informal economy.

The study “Dynamics of local economies and deprived neighbourhoods” provides an answer to questions as:

What are the characteristics of local economies and how are these embedded within wider urban, regional, national and global economies?
What are the differences in the dynamics of the economies within which deprived neighbourhoods are situated?
What are the distinguishing economic features of deprived neighbourhoods, and how do these differ between areas?
What are the economic dimensions of change processes, and is it possible to identify particular economic trajectories in the evolution of deprived neighbourhoods?

The second study that is discussed is “Worklessness in deprived neighbourhoods: a review of evidence”. It focuses on issues such as:

the (local) availability of jobs
individual and household factors
institutional factors
the impact of national policies
the impact of local policies

The third debated study is “Informal economic activities and deprived neighbourhoods”. Here, the researchers paid particular attention to answering the following questions:

What are the defining characteristics of informal economic activities? What is the most appropriate and practicable notion of such activities with regard to deprived neighbourhoods in the UK?
What role do informal economic activities play within the economy and labour markets of deprived neighbourhoods? What are the patterns of movement into, within, and out of the informal economy?
To what extent are informal economic activities both a drain and a positive force for economic activity within deprived neighbourhoods?
What are the impacts of policies on the operation of informal economic activity in deprived neighbourhoods? What are the challenges and opportunities for further policy development?

Background information

The research was carried out to examine the relationship between economic performance and employment, and whether achieving sustainable employment might be effective as a route out of poverty and social exclusion. The notion of sustainable employment is integral to the UK ‘National Strategy for Neighbourhood Renewal’, and the development of employment and economic development policy initiatives to promote the regeneration of deprived areas.

Methodology

The report reviews existing literature and evidence relating to local economies and deprived neighbourhoods. It summarises case study research analysing differences in the economic contexts in which deprived neighbourhoods are situated - coalfields, inner city areas, coastal resorts etc (including examples from Sunderland, Oldham, Mansfield, Brighton and Hove, Newham). It sets out existing evidence relating to the problem of high levels of worklessness in deprived neighbourhoods, and evidence relating to informal economic activities (informal paid work, illegal economic activity and informal unpaid work) in deprived neighbourhoods.

Conclusions

Conclusions include that:

there is an increasing concentration of worklessness among particular groups and neighbourhoods
the problem is one of multiple disadvantage, combining individual, household and contextual factors - including institutional behaviour
and existing policies, while reducing worklessness, have not worked as well for those who are least competitive in the labour market

The report identifies a range of issues stemming from these conclusions concerning:

the role of neighbourhood economic initiatives: There is an urgent need to integrate the neighbourhood level with larger geographies. However, there remains a key role for neighbourhood-based economic initiatives as a way of improving employability and promoting self-help. Community-based initiatives at neighbourhood level also help as part of an integrated package of employment support.
enhancing labour demand: Greater attention needs to be paid to the fine grain of labour demand, including processes. One of the principal barriers to employment for the residents of disadvantaged neighbourhoods is the recruitment practices of employers. At this point of time policy still focuses on the supply side.
An integrated approach: The reports argue for the better alignment of housing and economic policy, given the importance of residential sorting mechanisms to the creations of concentrations of deprivation. Furthermore, education and transport policies need to be better integrated with jobs and employment policies.

Contact info

Department for Communities and Local Government
Phone: +44 (0)20 7944 4400
contactus@communities.gov.uk

Publication date

30/06/2006

Project finished

Researcher

Professor David North et al

Links

For more information, please visit the Department for Communities and Local Government website

The economies of deprived neighbourhoods (PDF, Eng, 355 KB)

Document type

research

Themes

Urban Policy > Economy knowledge & employment > Urban economy

Keywords

Employment