Ed Howker

Spectator Exclusive: Britain’s welfare ghettos

Spectator Exclusive: Britain’s welfare ghettos
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Today we are releasing a brand new picture of the nation’s welfare ghettos. Our research gives a disheartening insight into the extent of dependency in England and Wales. The top line: things are getting worse.

This is much more detailed and useful information that the statistics often bandied about by politicians. It is well known, for example, that nearly 2 million people have been claiming out-of-work benefits for more than five years. But what does that look like?

We’ve examined the smallest measurable units recorded by the Department for Work and Pensions (the technical term is ‘Lower Super Output Areas’) which are smaller even than council wards – they contain about 1,000 people – to show the ghettos into which public money goes in and nothing comes out.

Fraser did this kind of research for the first time two years ago, drawing the first meaningful picture of dependency on out of work benefits. Later that year, Work and Pensions Minister Chris Grayling repeated the exercise, extending his remit to examine all types of handouts. This time we used Grayling's methodology and found that there are 134 areas of Britain where more than half the population are claiming benefits. We list the top 20 below.

Not surprisingly, it is in the North of England and South Wales where most welfare ghettos are to be found. But England’s benefits capital remains Central and Falinge in Rochdale. While Chris Grayling’s figures suggested that 76 percent of the population there were state dependents, 84 percent of the population live on them in 2010 – 77 per cent on out-of-work benefits alone.

The next question is obvious: What on earth is going on in Central and Falinge? I went to find out...

Life in a Welfare Ghetto

Falinge – pronounced fail-inj – has one of the lowest average life expectancies in the UK, and a higher proportion of incapacity benefit claimants than anywhere else in England but, as I pass through the gates of the estate at the heart of the area, I realise it doesn't look too bad.

Once, apparently, this estate had covered concrete passageways, which local gangsters would use to hide from police helicopters. Those have all been demolished. The streets are litterless. The municipal lawns are recently mown. Falinge is not forgotten. In the past decade, millions have been spent bringing it 'to standard'. The residents are exactly the people for whom Gordon Brown, first as chancellor and then as prime minister, said he was in politics to help. This is not just poverty, this is New Labour poverty. At first glance, it's not unappealing.

As with New Labour, however, you don't need to look for too long before more worrying signs present themselves. The estate's grocer informs customers that 'milk tokens are accepted'. The other major retailer is a betting shop. A local cafe offers a £4.70 breakfast that includes a can of Stella. In that cafe, I meet a bailiff. He used to live in a council flat in Falinge, but he left 'as soon as I could get the money together'. 'People make judgements about you if you're a resident.'

Most residents do not leave. According to the bailiff, they have instead developed their own parallel economy. 'The ambition is there but it's not to get a job or move out, it's to get benefits. And there is a definite career path. You or I would aim to get a better job. They aim to get a better benefit.’

The expertise needed to navigate through Britain's 50 varieties of state handout is passed by word of mouth in Falinge. 'Everyone wants “the sickness” [incapacity benefit]. Then you've really made it. You don't have to turn up for work or sign on. Everything is taken care of. '

In a place like Falinge, you might hear two cogent objections to the idea of greater incentives to work. The bailiff would tell you that many people around here do work – for drug gangs, or for cash in hand, while continuing to claim their benefits. No system can succeed unless the rules are enforced. More sympathetic observers argue that there are simply too few solid jobs available to people here. An incentive to work is useless if there is no work to take.

Politicians of all parties have long promised to act on the first objection. And the council and the local development quango in Rochdale will tell you that they have an answer to the second. Lots of answers, in fact: a series of job-creating schemes with a total cost of about £1 billion.

The Rochdale Development Agency has signed a multi-million pound transport plan, which will move the bus station 50 yards in order that it can be connected to Manchester's Metrolink tram system. Another £65 million will be spent on new council offices. And it is hoped that the town will get a new shopping centre. It already has two: one passed into receivership last month, the other shows little evidence of suffering from excessive custom. The Kingsway business park development on the edge of the town was designed to create 10,000 jobs but, £45m later, there are just 100.

Meanwhile, the warehouses and industrial firms that once provided most of the work in Rochdale have slipped away, perhaps even with the help of that development money. In 2007 a local engineering company, Whipp and Bourne, moved to South Wales. Earlier the council had designated its old site an 'area of opportunity'; many here believe that the resulting increase in land values funded the relocation.

For Whipp and Bourne, the move was a matter of simple economics – it paid to leave town and work. The opposite force is applied in the Falinge welfare ghetto however – it pays to stay and do nothing so the only things blooming on the estate are the flower boxes.

England and Wales's welfare ghettos

UPDATE: I just want to clarify the table for some of you who have complained. As I put in the post, what we're measuring here are sub-ward groups of people - often of about 1,000 people - so if a ward appears in the table more than once that's because there is more than one welfare ghetto in it. These small groups are listed in DWP tables by slightly impenetrable reference numbers so I thought it sensible not to complicate this using them. Hope that helps.