According to the Child Poverty Action Group, high childcare costs mean that financial work incentives in London are weaker than in other parts of the country.
An analysis by the charity found that a parent with four children working part-time and paying average London childcare costs is £65 worse off per week than the same families living outside the capital.
The charity’s report, ‘Families on the Brink’, says that a ‘toxic’ combination of low-paid work and extremely high housing and childcare costs, alongside welfare reforms, means that many families must chose between living in extreme poverty or leaving London.
Based on interviews with councils, advice services and parents, as well as a review of existing evidence, the report reveals fears of a housing crisis uprooting families from their homes and communities and children’s education being hugely disrupted by these forced moves.
The majority of councils that the charity spoke to said they had seen a significant number of families choosing to live in overcrowded or poor quality accommodation in order to stay in their area, which evidence shows has serious detrimental impact on child’s health, education and well-being, says the charity.
The report concludes that there is a serious risk that London will become unaffordable for a large number of low-income or workless families. It says that families are already struggling to find affordable properties in the area and the benefit cap puts all London boroughs out-of-reach for couples with three children.
It goes on to say that evidence suggests that rents in London will continue to increase above the rate of inflation, which will make even fewer properties available to households claiming housing benefit.
The Child Poverty Action group makes a number of recommendations to help families in London, they include:
- funding for childcare to recognise and match London’s costs to make it easier for parents to work;
- protecting workless residents from paying council tax;
- on-going monitoring of the effects of welfare reform in London to enable action to be taken to mitigate any negative effects.
Alison Garnham, chief executive of the Child Poverty Action Group, said, ‘Councils and families are telling us that a crisis is just around the corner in London.
'It will cause tremendous disruption to children’s lives for families to have to leave their city, their extended families, schools and support networks. It also risks destroying the mix and diversity London prides itself on.
'Londoners need a housing benefit system where allowances match local rents and we need better quality services for helping parents find work, stay in work and progress onto higher pay. This must include improving the supply of high quality childcare and ensuring families can afford to pay for it.’