The effects of poverty costs the UK £78bn a year

The Joseph Rowntree Foundation (JRF) estimates that the impact and cost of poverty accounts for £1 in every £5 spent on public services.

The biggest chunk of the £78bn figure comes from treating health conditions associated with poverty, which amounts to £29bn, while the costs for schools and police are also significant. A further £9bn is linked to the cost of benefits and lost tax revenues. …

The JRF report, called “counting the cost of UK poverty”, estimates that 25% of healthcare spending is associated with treating conditions connected to poverty.

In education, an extra £10bn – 20% of the schools budget – is spent every year to cope with the impact of poverty through initiatives such as free school meals and the pupil premium, which isfunding given to schools to help children from socio-economically disadvantaged backgrounds improve their academic performance.

Police and criminal justice account for £9bn of the annual poverty cost, due to the higher incidence of crime in more deprived areas.

An estimated £7.5bn of spending in children’s services is associated with poverty. This represents 40% of the early years budget and 60% of the children’s social care budget.

The report’s authors said their estimates did not include the full cost of benefits aimed at preventing poverty or helping people to find a way out of it, such as working tax credits or jobseeker’s allowance. Nor did they include the amount that experiencing poverty in adulthood costs the public purse through reduced tax revenue. The estimates for lost tax revenue that the report included were only based on individuals who grew up in poverty.