Poverty Costs British Taxpayer £78 Billion A Year

Old pushchair
An old pushchair is left besides a playground on a housing estate in Bristol, England, August 3, 2015. A report has called for a “coherent” strategy for dealing with poverty which would result in large savings. Matt Cardy/Getty

Poverty costs the U.K. taxpayer £78 billion a year in additional public service spending and lost taxes, according to a report.

The research, commissioned by the Joseph Rowntree Foundation, estimated an extra £69.2 billion—or £1 in every £5 of public spending—went on areas including healthcare, schooling and policing.

A further £9 billion is either spent on benefits intended to alleviate poverty or in lost tax revenue, the report, entitled “Counting the cost of U.K. poverty,” said.

Researchers at Heriot-Watt University and Loughborough University counted the costs of the consequences of poverty for people on low incomes, defined as living below 60 percent of the average, the money spent on relieving deprivation and on preventative measures.

These costs included £29 billion in extra spending to treat health conditions associated with poverty, £10 billion on measures such as free school meals and the pupil premium and £9 billion as a result of a higher crime rate in deprived areas.

A further £7.5 billion is spent on children’s services, £4.6 billion on adult social care and £7.9 billion in other areas including housing.

The report’s authors admitted the overall figure was a “broad brush estimate” and establishing the full cost was “hard.”

But Professor Donald Hirsch, from the Centre for Research in Social Policy at Loughborough University and one of the report’s authors, said: “What our figures show is that there are very large, tangible effects on the public purse.

“The experience of poverty, for example, makes it more likely that you’ll suffer ill-health or that you’ll grow up with poor employment prospects and rely more on the state for your income.”

The report called for a “coherent” strategy for dealing with poverty that would result in large savings.