The English Indices of Deprivation 2019

The Indices of deprivation (IoD) is a collection of seven measures of deprivation used to relatively rank areas of England. The aim is to order the 32,844 small areas, with an average population of 1,500 or 650 households, from the least deprived to the least, and monitor changes in these ranks over time. The indices were introduced in the 1970s by the Ministry of Housing, Communities & Local Government to measure local deprivation across England. These neighbourhoods are officially called Lower-layer Super Output Areas (LSOAs).

Poverty is a lack of financial resources, whereas deprivation includes multiple aspects of individuals living conditions to measure a lack of resources. There are 39 indicators organised into seven domains combined using weightings that value income and employment more heavily than other forms of deprivation such as health or risk of crime. As a relative measure, there is no threshold where an area is considered deprived, but rather it is used to measure the relative deprivation between local areas.

The seven measures that make up the IoD are:

  • Income (22.5%)*: Measures the proportion of the population experiencing deprivation relating to low income
  • Employment (22.5): Measures the proportion of the working-age population in an area involuntarily excluded from the labour market
  • Education (13.5%): Measures the lack of attainment and skills in the local population
  • Health (13.5%): Measures the risk of premature death and the impairment of quality of life through poor physical or mental health
  • Crime (9.3%): Measures the risk of personal and material victimisation at local level
  • Barriers to housing and services (9.3%): Measures the physical and financial accessibility of housing and local services
  • Living environment (9.3%): Measures the quality of both the ‘indoor’ and ‘outdoor’ local environment

*Percentages represent weighting used when combining the domains

The latest data was collected in 2015 and 2019. Deprivation is distributed across England, with 61% of local authorities having at least one of the highest deprivation areas. The most deprived areas of the country tend to be concentrated in cities, particularly those that used to have heavy industry, including Birmingham, Nottingham, and Hartlepool, coastal towns, and parts of east London. Blackpool is considered the most deprived area of England, with eight of the ten most deprived neighbourhoods in the indices.

The indices can be used to compare neighbourhoods across England, identify the most deprived small areas, and compare larger regions based on the relative deprivation within the LSOAs, such as the number of areas in the bottom 20% of the indices. The data can also be used to explore individual domains such as levels of education, health, or crime in particular areas. Movements in the relative rank of a given area can be used as evidence of the effectiveness of development programmes or targeted interventions. 

The Indices of Deprivation is becoming more critical for Universities. The Office for Students puts pressure on higher education institutions to narrow gaps in access, progression, attainment, and outcomes between different groups of students. Gaps in the four areas existing between those that come from regions ranking lower than those that rank higher. Universities must make sure they are narrowing the gaps by seeking to recruit students from areas of high deprivation, putting in place interventions to help these students stay at university and achieve a good degree, and support them to find a graduate-level job once they leave.

Being aware of the indices is essential, first to understand that deprivation is not just about income, and secondly that you can use it over time to measure the impact of your work. You can read the complete reports and access the data on the UK Government website

The financial return on investment of a degree

The average student from a low-income background will borrow £53,000 to attend a three-year degree at university, which rises to £28240.75 with interest if left unpaid over 30 years. The first £27,750 covers tuition fees, with the rest used for maintenance costs, including rent, food, and socialising, with four-fifths of students living away from home to study.

The graduate or professional premium is a term used to describe the increase in average wages that university graduates can expect having achieved a degree.

futurefinance.com

Students are told that going to university is an investment. The UK Government has claimed a graduate premium of an additional £400,000 of income over a lifetime. 1999 Age-earnings reported The Economic Journal showed the premium at an average of £410,000, the premium has reduced to just £100,000.

Over a 45 year working life, £100,000 is just £2,222 per year before income tax and national insurance. This increase in earnings does not cover the interest accruing on the loan. According to the Institute of Fiscal Studies, 20% of students would have been earning more ten years after graduating if they had skipped university and gone straight into work instead. 

It is important to note that the graduate premium is an average, and the return differs significantly by gender and subject area. According to the Institute of Economic Affairs, male Medical and Dentistry graduates earn an average of £400,000 more over their working lives than non-graduates. Male Creative Arts and Design graduates earn £10,000 less than non-graduates over their working lives.   

There are many reasons to go to university. Still, the financial return on your investment of delaying starting your career by three years and the £28k-£53k dept is only financially beneficial if you choose your degree specifically for that reason.