Income inequality

Inequality in UK is wider now than at any time in the past forty years, and social mobility is flat. The social costs of inequality, such as crime, mental illness and drug abuse, can be difficult if not impossible to address and cost us billions every year. nef believes that inequality is not random, but is rather the direct result of a faulty economic model. That's why we're working on new ways to stop inequality arising in the first place, and challenging policymakers to make ending inequality a political priority.

What we're doing
Our new programme of work, funded by the Joseph Rowntree Foundation, is investigating the structural causes of inequality. First we will explore whether and how inequality could be prevented from arising, rather than ‘cured’ after it has already occurred. Drawing on UK and international experience, the aim will be to identify policies and mechanisms for achieving a more equal economic system.

Growing inequality in the UK
For most of the past 15 years the UK has experienced sustained economic growth. But geographical inequalities have widened, and pockets of severe deprivation have developed because the benefits of growth have not been equally shared. Around 60 per cent of workless households are concentrated in just 40 districts of the UK. Many of the unemployed are unskilled men from ex-industrial areas such as Wales and parts of Northern England. This is also in spite of billions of pounds being spent every year to regenerate these areas.

Our previous analysis of the ‘enterprise and employment gap’ found that enterprise is becoming less equally distributed across England; that claimants are becoming more concentrated in deprived areas; that growth at the local authority level does not usually lead to growth in the most deprived areas; and that enterprise creation is only part of the solution to deprivation. This has raised the question of what conditions are both necessary and sufficient to reverse these deep-seated trends and enable those areas that have been increasingly slipping behind to begin to catch up, reducing spatial inequalities.

Spatial inequality
Our current research is this area will update these findings to better understand the impact of the recession on those same areas. We will also identify deprived areas that have improved their economic position using the trend data from our previous work – i.e. areas that have seen a real positive change in economic development – this will lay the foundations for in-depth case studies to assess what the factors were that led to this successful experience, and so to draw hard policy lessons on government and other agencies need to do (and not to do) if this is to be possible in other disadvantaged areas.