The trickle down theory of wealth creation has not benefited the poorest areas of England during the boom years, concludes a report from nef, the new economics foundation. Despite substantial investment to regenerate deprived areas through enterprise, gaps between poor and wealthier areas have widened and pockets of severe deprivation have developed.
The report reveals that the most deprived boroughs saw their share of enterprise fall while it rose in the least deprived boroughs. The most dramatic inequalities are at neighbourhood level. Only four percent of deprived areas increased their enterprise share relative to England while the share of benefit claimants rose in 84 percent of the most deprived neighbourhoods.
While employment rates are improving in some deprived local authority areas, these improvements don’t necessarily flow to the most deprived neighbourhoods within those areas. Enterprise and employment policies haven’t helped many of the poorest communities and it is these people who are least well placed to weather the coming recession.
The report argues that the emerging trends are strong and likely to be structural; consequently they will be difficult to reverse. Carrying on existing enterprise and employment policy is unlikely to reverse the trends. Enterprise creation alone is not enough to address economic inequality and measures are also needed to maintain share of the wealth in deprived areas, to make sure the money that is invested stays within those communities.
The gap years is available here. http://www.neweconomics.org/gen/z_sys_PublicationDetail.aspx?pid=272