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Poverty in the UK remains high by historical standards, and 4.5 million children lived in relative poverty after housing costs (AHC) in 2023/24 (the highest since records began) while poverty rates for disabled people remain markedly higher than for non-disabled people. Median household incomes also fell by around two per cent in real terms,ml across 2023/24. The West Midlands continues to sit near the top of the league table on multiple indicators.
Zooming in on child poverty in the city-region
Child poverty after housing cost across the WMCA area was around 41% in 2023-24 Local after-housing-cost indicators show high rates across parts of Greater Birmingham. The latest End Child Poverty and Loughborough University update puts several districts in the one-in-three range. East Staffordshire is estimated at 36 per cent. Redditch, Tamworth, Wyre Forest and Cannock Chase are each around 34 per cent. Within the city, constituency-level figures are starker. Birmingham Ladywood is estimated at 62 per percent, with several other Birmingham seats above 50 per cent. This reflects how housing costs and larger families combine with low incomes.
The two-child limit is central to this picture. Recent analysis links constituency child poverty rates closely to the share of families affected by the policy. Independent assessment suggests removing the limit would be one of the quickest ways to reduce child poverty. The Labour government has been reviewing options ahead of the Autumn Budget, with reports in late October suggesting possible reform or repeal under consideration. A final decision had not been announced at the time of writing (27th October, 2025) Any change would materially affect child poverty trajectories in high-poverty areas like Birmingham and neighbouring districts.
The English Indices of Deprivation 2025, released on Friday 31st October show that the most deprived areas are concentrated in large cities and towns, in places with a history of heavy industry, manufacturing or mining, in coastal towns, in large parts of East London and in some rural former coalfield communities. Birmingham stands out in this national picture. 42.8% of its 659 neighbourhoods are in the most deprived tenth of areas nationally, which is the second-highest share in England after Middlesbrough. 25.8% of Birmingham’s neighbourhoods are in the most deprived five per cent. Birmingham also has the largest overall number of residents who are income-deprived and employment-deprived. Birmingham is one of seven local authorities that have consistently ranked among the fifteen most deprived by average rank across all six releases since 2004. The report also cautions that changes between 2019 and 2025 are relative rather than absolute because indicators and geographies were updated, and it notes that the number of LSOAs increased from 32,844 in 2019 to 33,755 in 2025.
Costs, incomes and the squeeze.
Inflation has fallen from the peaks of 2022 and 2023 but the price level is still higher. CPI inflation in September 2025 stood at 3.8 per cent. Many essentials remain costly. Benefits uprating from April 2025 was 1.7 per cent for most working-age support. That helps, but it lags pressures in rents and key household bills. The real Living Wage (volu ntarily paid by 16,000+ accredited employers) rose on 22nd October, 2025 to £13.45 across the UK and £14.80 in London, with employers having until 1 May 2026 to implement. Take-up among local employers can directly lift pay in lower-wage sectors across Greater Birmingham.
Local Housing Allowance matters for many private renters. LHA sets the maximum housing support for private tenancies receiving Housing Benefits or the housing costs element of Universal Credit. It is designed to reflect the 30th percentile of local rents within Broad Rental Market Areas and vary by dwelling size. The link was restored for a single year in April 2024, then frozen again for 2025-26. With rents rising, more low-income households face shortfalls and arrears. The government’s own tables confirm that 2025-26 rates remain at 2024 levels. Independent charities and think-tanks warn this will push up homelessness risk unless councils can bridge gaps.
Housing stress and temporary accommodation
Homelessness pressures are rising. On 30 June 2025 there were 132,410 households in temporary accommodation in England, a record and up 7.6 per cent year-on-year. The flow into rough sleeping also increased through mid-2025. These trends are not confined to London. They affect many West Midlands councils who already face acute budget pressure and limited affordable supply. For families in Greater Birmingham, long stays in temporary accommodation disrupt schooling, make work harder and add costs to councils and the NHS.
Further, local housing markets are also shaped by national asylum policy. In June 2025 around 106,000 people were in receipt of asylum support with over 32,000 accommodated in hotels, well below the 2023 peak but higher than a year earlier. Alongside humanitarian obligations, migration also adds fiscal and economic value: the OBR and Migration Observatory report that higher net migration tends to lower deficits via increased tax receipts,, and ethnic minority-led businesses (over 250,000 firms) contribute at least £25 billion per year to the UK economy. Greater Birmingham has a high concentration of these firms in retail, hospitality, logistics and services. Support that stabilises premises and cashflow can protect jobs and local high streets.
Poverty and benefits
Working-age benefits rose by 1.7% in April 2025, which is below inflation, eroding real-terms support. Further, the Household Support Fund extension to March 2026 has provided a flexible, proven tool for “cash-first” local welfare. Early-years childcare expansion to 30 hours from September 2025 for eligible working parents of children from nine months can reduce costs and boost participation that is, if local capacity keeps pace. Devolution also matters as the English Devolution and Community Empowerment Bill (July 2025) aims to widen and deepen devolution and give combined authorities single, longer-term settlements. WMCA’s outcomes framework offers a vehicle to embed poverty metrics in investment.
Alarge share of Universal Credit households in the West Midlands have money taken from their award to repay debts. In February 2025 it was 47 per cent, with an average deduction of about £68 a month. That reduces disposable income and can tip families into arrears. A local offer that helps residents manage deductions and debt will stabilise incomes and improve work readiness. Many Universal Credit claimants are already in work across WMCA wards, so support should focus on progression, skills and childcare. National evidence shows limited benefits for sustained earnings and, on average, slower exits into PAYE work and lower earnings after exit. Local programmes should prioritise personalised help and timely cash-first assistance over punitive conditionality. Further, poor health is major driver of economic inactivity. WMCA’s Health of the Region sets out a practical Health in All Policies approach that local partners can use to connect employment support with primary care, housing and mental health. This is also where the region has proof of concept. Independent evaluations show health-led employment support in West Midlands increased the chance of sustained work, which supports a needs-based “flourishing potential” model that fits the growth plan for the city-region.
What this means for Greater Birmingham’s priorities
- First, keep a tight focus on child poverty. Local strategies should plan on the basis that child poverty remains elevated unless national policy changes on the two-child limit and LHA. Practical steps include increasing access to quality childcare, boosting take-up of Healthy Start and Free School Meals, and coordinating local welfare support to prevent debt spirals. Constituency-level data inside Birmingham show deep hotspots. That is where integrated family support and school-led partnership work will have the greatest return.
- Second, make the private rented sector work better for low-income households. Councils and partners can use landlord engagement and tenancy sustainment to reduce evictions and arrears. Where possible, use selective licensing and proactive standards to improve property quality. Align this with a push on the real Living Wage among anchor employers and key suppliers. That raises disposable income and supports retention in sectors with chronic vacancies.
- Third, reduce the demand for temporary accommodation by unblocking move-on. That means ring-fenced support for families in temporary accommodation, faster allocations into social and affordable homes. Partners can also scale Housing First-style models for the most vulnerable.
- Fourth, back migrant-led and ethnic minority businesses as a growth and inclusion asset. Tailor business support to premises security, late-payment recovery, digital adoption and access to finance. This protects local jobs and adds resilience in neighbourhood centres across the city-region.
- Fifth, double-down on job quality (security, predictable hours, progression) in retail, hospitality, care and logistics, which are sectors where many low-income residents work. Use WMCA levers (e.g., grants, skills contracts, capital) to incentivise employers to adopt real Living Wage, fair scheduling and progression pathways.
Poverty in Greater Birmingham is high and concentrated, but it is not immutable. With the right mix of national reform and local delivery, the city-region can reduce hardship while supporting sustainable growth.
This blog was written by Dr. Gerardo Arriaga-Garcia , Research Fellow, City-REDI, University of Birmingham.
Disclaimer:
The views expressed in this analysis post are those of the author and not necessarily those of City-REDI or the University of Birmingham.