The rural–urban poverty gap in England after the 2008 financial crisis: exploring the effects of budgetary cuts and welfare reforms

Figures & data

Figure 1. English local authority districts (LADs) by rural–urban classification.

Source: DEFRA, RUC11, LAD21. © Crown Copyright and database rights 2023 Ordnance Survey Licence No. 100022861.

Table 1. Place of residence as a predictor of likelihood of poverty.

		Marginal effects
(1)	National Statistics Rural and Urban Classification of Output Areas released on 21 July 2004
	Rural resident dummy	−0.120***
(2)	Rural–Urban LA Classification (2011)
	Predominantly Rural	−0.062***
	Predominantly Urban (reference category)	–
	Significantly Rural	−0.104***
(3)	Rural–Urban LA Classification segregation London (2011)
	Predominantly Rural	−0.075***
	Predominantly Urban	−0.011
	Significantly Rural	−0.112***
	London (reference category)	–
(4)	Rural–Urban LA Classification (2011)
	Largely Rural (rural including hub towns 50–79%)	−0.081***
	Mainly Rural (rural including hub towns ≥ 80%)	−0.062**
	Urban with City and Town	−0.047***
	Urban with Major Conurbation (reference category)	–
	Urban with Minor Conurbation	−0.009
	Significantly Rural (rural including hub towns 26–49%)	−0.118***
(5)	Rural–Urban LA Classification segregating London (2011)
	Largely Rural (rural including hub towns 50–79%)	−0.075***
	Mainly Rural (rural including hub towns ≥ 80%)	−0.071**
	Urban with City and Town	−0.045***
	Urban with Major Conurbation	0.010
	Urban with Minor Conurbation	−0.003
	Significantly Rural (rural including hub towns 26–49%)	−0.112***
	London (reference category)	–
	Observations	11,646

Note: Presented are mean marginal effects from logistic regression models of the determinants of poverty. *p < 0.10, **p < 0.05, ***p < 0.01. LA, local authority.

Table 2. Changes in government spending and welfare in urban versus rural areas (%) and distribution across population quartiles.

(*100)	Predominantly Rural	Predominantly Urban	Significantly Rural
Real terms change in local government spending power between 2014/15 and 2018/19	−0.96%	−2.83%	−1.68%
Quartiles (*100-%)
Quartile 1	0.830	0.196	0.280
Quartile 2	No observations	0.246	0.371
Quartile 3	0.085	0.295	0.089
Quartile 4 (greatest decrease)	0.084	0.263	0.259
Real terms change in local government service spending between 2009–10 and 2016–17	−17.90%	−27.40%	−16.97%
Quartiles (*100-%)
Quartile 1	0.534	0.182	0.697
Quartile 2	0.228	0.242	0.303
Quartile 3	0.154	0.288	No observations
Quartile 4 (greatest decrease)	0.084	0.287	No observations
Total anticipated loss by 2020/21 from pre- and post-2015 welfare reforms (per capita)	£629.00	£800.00	£610.20
Quartiles (*100-%)
Quartile 1	0.62	0.18	0.84
Quartile 2	0.34	0.25	0.08
Quartile 3	0.04	0.27	0.07
Quartile 4 (greatest loss)	No observations	0.29	No observations
Observations	924	10,161	571

Note: Values for each quartile indicate the incidence of government spending and welfare cuts across local area districts by urban versus rural residence. Thus, for example, 29% of the predominantly urban population reside in local authority districts (LADs) with the greatest decrease in income because of welfare reforms between 2010 and 2020, compared with none in predominantly rural or significantly rural areas.

Source: Authors’ analysis of data from the Understanding Society Survey (USS) combined with government data (core spending power), Institute of Fiscal Studies (IFS) data (service spending), and information from the Centre for Regional Economic and Social Research at Sheffield Hallam University (welfare reforms).

Figure 2. Share of working-age individuals in poverty by rural–urban residence in England, 2010 and 2018.

Source: Authors’ analysis of data from the Understanding Society Survey (USS).

Table 3. Sociodemographic and economic characteristics by place of residence, England, 2018.

	Predominantly Rural	Predominantly Urban	Significantly Rural
Head of household female	50.5%	43.9%	45.5%
Head of household age (years)
Head of household 16–24	2.2%	1.85%	1.06%
Head of household 25–55	69.2%	69.0%	70.4%
Head of household 56–65	22.8%	20.9%	24.0%
Housing tenure
Owned/mortgage	71.7%	65.1%	74.6%
Social housing	12.0%	20.1%	13.1%
Private rent	16.4%	14.8%	12.3%
Type of family
Single	10.5%	9.62%	11.3%
Couple, no children	21.5%	11.7%	19.6%
Couple, children	31.2%	28.7%	31.0%
Lone parents	4.39%	4.42%	5.11%
Other households	32.4%	45.6%	33.0%
Head of household economic activity
Employed	64.0%	60.1%	67.7%
Self-employed	13.8%	11.8%	11.5%
Unemployed	3.29%	5.33%	2.82%
Inactive	18.9%	22.7%	18.0%
Head of household education
University degree	30.6%	32.3%	33.5%
Other higher education	14.2%	12.0%	13.2%
A-levels	22.3%	17.8%	21.7%
GCSE	21.0%	17.8%	21.0%
Other qualifications	6.81%	8.86%	6.53%
No education	6.15%	8.85%	5.82%
Number of individuals employed in the household
0 persons	10.4%	9.62%	9.52%
1 person	26.5%	29.2%	26.8%
2 or more persons	63.1%	61.2%	63.7%
Observations	911%	9972%	567%

Source: Authors’ analysis of data from the Understanding Society Survey (USS).

Figure 3. Real terms change in local government service spending by 2005 index of multiple deprivation and rural–urban residence: England, 2009–10 to 2016–17 (% change).

Source: Authors’ analysis of data from the Understanding Society Survey (USS) and Institute of Fiscal Studies (IFS) data.

Figure 4. England: real-terms change in local government spending power by 2005 index of multiple deprivation and rural–urban residence: 2014/15–2018/19.

Source: Authors’ analysis of data from the Understanding Society Survey (USS) and Ministry of Housing, Communities & Local Government (MHCLG) data.

Figure 5. Decline in per capita income as a result of cuts to welfare benefits by 2005 by index of multiple deprivation and rural–urban residence.

Source: Authors’ analysis of data from the Understanding Society Survey (USS) and from Beatty and Fothergill (2018).

Table 4. Predictors of poverty.

	Rural dummy	Rural dummy + Individual characteristics	Rural dummy + Individual characteristics + Local authority characteristics
Place of residence (ref. Predominantly Urban)
Predominantly Rural	−0.062***	−0.040***	−0.021
Significantly Rural	−0.104***	−0.079***	−0.059***
Individual characteristics
Head of household female		−0.025***	−0.026***
Head of household age (ref. Head of household 25–55)
Head of household 16–24		0.122***	0.123***
Head of household 56–65		−0.003	−0.004
Housing tenure (ref. Homeowner)
Social housing		0.143***	0.145***
Private rent		0.175***	0.175***
Type of family (ref. Couple, no children)
Single		0.093***	0.092***
Couple, children		0.169***	0.166***
Lone parents		0.218***	0.217***
Other households		0.080***	0.077***
Head of household economic activity (ref. Unemployed/inactive)
Head of household self-employed		0.005	0.004
Head of household permanent contract		−0.113***	−0.114***
Head of household fixed term contract		−0.107***	−0.108***
Head of household education (ref. No education attained)
Head of household university		−0.104***	−0.097***
Head of household other higher education		−0.056***	−0.051***
Head of household A-levels		−0.056***	−0.053***
Head of household GCSE		−0.035***	−0.034***
Head of household other qualifications		−0.039***	−0.038***
Number of individuals employed in household (ref. 1 person working)
0 person		0.024**	0.022**
2 people or more		−0.142***	−0.138***
Local authority characteristics^a
Negative change in spending power – quartile 2			0.004
Negative change in spending power – quartile 3			−0.013
Negative change in spending power – quartile 4 (greatest decrease)			0.006
Change in service spending – quartile 2			0.013
Change in service spending – quartile 3			−0.014
Change in service spending – quartile 4 (greatest decrease)			0.013
Total anticipated loss by 2020/21 from pre- and post-2015 welfare reforms (per capita) – quartile 2			0.031***
Total anticipated loss by 2020/21 from pre- and post-2015 welfare reforms (per capita – quartile 3			0.035***
Total anticipated loss by 2020/21 from pre- and post-2015 welfare reforms (per capita – quartile 4 (greatest loss)			0.050***
Observations	11,646	11,535	11,535

^a For the three austerity cuts and welfare reforms measures used the reference category is the quartile (q1) where service spending or government spending power decrease the least in relation to the previous reference year and where the losses due to welfare reforms were the smallest.

Presented are mean marginal effects from logistic regression models of the determinants of poverty.

*p < 0.10, **p < 0.05, ***p < 0.01.

Source: Authors’ analysis of data from the Understanding Society Survey (USS).

Beatty, C., & Fothergill, S. (2018). Welfare reform in the United Kingdom 2010–16: Expectations, outcomes, and local impacts. Social Policy and Administration, 58(5), 950–968.

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DATA AVAILABILITY

The data analysed in this study are all publicly available: for the Understanding Society dataset, see https://www.understandingsociety.ac.uk/documentation; see https://www.gov.uk/government/publications/core-spending-power-final-local-government-finance-settlement-2019-to-2020 for local authorities’ core spending power, and see the Institute for Fiscal Studies (https://ifs.org.uk/publications/8781) for their service spending; for the data on the financial impact of welfare reforms, see https://www4.shu.ac.uk/research/cresr/ourexpertise/the-uneven-impact-of-welfare-reform; and for The Rural Urban Local Authority Classification data, see https://www.gov.uk/government/statistics/2011-rural-urban-classification-of-local-authority-and-other-higher-level-geographies-for-statistical-purposes/.