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Poverty costs Britain 103 bln USD a year: report

Xinhua, August 3, 2016 Adjust font size:

The annual cost of poverty in Britain has been calculated for the first time, and put at 103 billion U.S. dollars a year, a report revealed Monday.

The report by social policy organization Joseph Rowntree Foundation estimates the tangible cost that poverty brings to society, specifically in the form of the cost to the public purse.

The report shows public service costs of poverty amounts to around 91 billion U.S. dollars, with knock-on effects of child poverty costing a further 8 billion U.S. dollars and adult poverty of at least 3.6 billion U.S. dollars.

This amounts to poverty costing the average taxpayer 1,580 U.S. dollars a year.

Most of the cost of poverty fell on the shoulders of the National Health Service (NHS) as most of those living in poverty were "more likely" to suffer ill health.

The research, carried out by Heriot-Watt and Loughborough universities, is the first to look at how much poverty across all age groups costs different government departments. Researchers examined all areas of public expenditure associated with the direct costs of poverty and the prevention of future poverty. The total poverty sum does not include money spent on government benefits.

The report stated: "The very existence of poverty in a rich country can be a source of collective shame, social tension and anxiety."

Prof. Donald Hirsch from Loughborough University, who co-authored the report, said it showed the "very large, tangible effects on the public purse."

"The very large amounts we spend on the NHS and on benefits means that making a section of the population more likely to need them is extremely costly to the Treasury."

Julia Unwin, the foundation's CEO, called for "real action" to tackle the causes of poverty and reduce the bill for taxpayers.

Unwin added: "Poverty wastes people's potential, depriving our society of the skills and talents of those who have valuable contributions to make. This drags down the productivity of our economy, hinders economic growth, and reduces tax revenue."

The report shows that 38 billion U.S. dollars treating health conditions associated with poverty.

It costs over 13 billion U.S. dollars for schools to provide initiatives such as free school meals and pupil premium for poorer students, and nearly 12 billion U.S. dollars on the police and criminal justice systems dealing with higher incidences of crime in deprived areas.