New official figures show that nearly all children in dozens of neighbourhoods across England are growing up in low-income families, revealing the scale of deprivation despite years of government pledges to “level up” the country.
Updated indices of multiple deprivation, released this week, show that 73 neighbourhoods in England now have 99% or more of children living in income-deprived households. The findings expose deep and persistent poverty in many parts of the country — and highlight a dramatic rise in hardship driven by high housing costs, stagnant wages, and welfare restrictions.
Of the areas most affected, 31 are in inner London boroughs such as Tower Hamlets, Hackney, Haringey and Westminster, where rents and living costs have soared. Researchers say that adjusting for housing costs has “reshaped” the national map of deprivation, pushing the capital to the forefront of the crisis.
The data also show that previous efforts to reduce poverty in England’s post-industrial towns and cities have largely stalled. Blackpool, Middlesbrough, Burnley, Manchester and Birmingham remain the five most deprived local authorities — the same areas that topped the 2019 rankings.
‘Levelling up has failed’
The recalculated deprivation index reveals what experts call “micro-pockets of extreme hardship,” many caused by welfare reforms such as the two-child benefit cap and housing benefit limits.
In 2019, no neighbourhood in England recorded more than 90% of children living in income-deprived households. By 2025, that number had jumped to 280, with 73 areas surpassing the 99% threshold.
One of the most striking changes is in Stamford Hill, Hackney, where the proportion of children in income-deprived families has risen from 8.9% in 2019 to 99.9% in 2025, a transformation driven largely by rent inflation.
The figures confirm what campaigners have warned for years — that “levelling up” policies have failed to dent entrenched poverty in England’s poorest regions.
Jaywick, in Clacton, Essex, remains the most deprived neighbourhood in England for the fourth time in a row, while coastal towns continue to dominate the lowest rankings. Nearly one in five coastal neighbourhoods are among the most deprived 10% of areas in England.
However, a handful of districts have seen improvement through regeneration. The area around the Nine Elms development in Lambeth, home to the new US embassy and a new Tube station, has moved from the bottom 20% of deprived areas to the top 10% in just a few years.
Impact on funding and public services
The new deprivation index will feed into the government’s revised council funding formula, due next month. But the inclusion of housing costs in deprivation measures could shift the balance of public funding — potentially reducing money for northern and Midlands councils while boosting allocations for London.
Northern authorities fear they may lose out. One senior council official warned that “adjusting for London rents risks starving already struggling towns of the help they need.”
However, London councils have welcomed the change as long-overdue recognition of the capital’s acute housing affordability crisis.
Government response
Alison McGovern, the Minister for Local Government and Homelessness, described the findings as “a damning indictment of a system that has left some communities broken.”
“Today’s statistics show that previous policies barely began to break the cycle of deprivation, health inequality and stagnant growth,” she said. “Our devolution bill and investment in children’s development — including £500m for early years and £1bn in crisis support — will help shift the dial.”
Despite small improvements in some areas, the figures underline the depth and persistence of poverty across England. Three neighbourhoods — central Rochdale, Ayresome in Middlesbrough and Bidston Hill in Wirral — have been ranked among the most deprived 100 in England for every index since it was created in 2004.
