Mapped: 3,500 areas where benefit claimants outnumber workers

Unemployed benefit claimants outnumber working people in thousands of neighbourhoods across Britain, according to new analysis.

The Centre for Social Justice (CSJ) identified 3,000 “welfare hotspots” across England and Wales where at least half of the working-age population claims out-of-work benefits.

In more than 150 neighbourhoods, the proportion was even higher than 80 per cent.

Former Conservative leader Sir Iain Duncan Smith said the figures suggested that unemployment had “gradually become accepted as a fact of life since the pandemic”.

Sir Iain said: “Britain is now living with levels of worklessness that would once have been treated as a national emergency.

“Yet because much of that worklessness is recorded as incapacity rather than conventional unemployment, it has gradually become accepted as a fact of life since the pandemic. This is not good enough. Lives are being ruined and yet this issue hides in plain sight.

“The reforms I introduced, including Universal Credit, helped drive worklessness to record lows before the pandemic. With political courage and determination, it can be done again.

“Leaving millions of people in left-behind areas without the purpose, security and dignity that come with employment is neither compassionate nor sustainable.

“This report proves beyond doubt that it is time for the next generation of welfare reform.”

Birmingham had the highest number of local-authority neighbourhoods where out-of-work claimant levels exceeded half of the estimated working-age population, with 166 such areas.

Liverpool ranked second on the CSJ’s list with 112, followed by Sheffield with 82 and Bradford with 81.

By contrast, the areas with the largest share of these neighbourhoods—typically home to about 250 people—were Blackpool, Hartlepool and Redcar and Cleveland, at 15, 12 and 8 per cent respectively.

The findings were published in State of Dependency, a 250-page report produced as part of a new inquiry into welfare.

Overall, about 22 per cent of neighbourhoods in Liverpool and 18 per cent in Birmingham had out-of-work claimant levels equivalent to at least 40 per cent of the working-age population, compared with just 2 per cent in London.

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Since 2019, the number of working-age benefit claimants facing no requirement to seek employment or prepare for work has risen by almost 1.7 million.

The incapacity benefit caseload has increased by 6,161 per cent—making Britain an international outlier—while the prevalence of disability among working-age people has risen by 16 per cent.

The report said worklessness is increasingly being recorded as “incapacity” rather than unemployment, with mental health identified as a major factor. Some 3.2 million more working-age people now report a mental health difficulty than in 2012.

One participant at a CSJ event said they had a “spreadsheet of every single young person and where they lived”, adding that they had found “they all lived within particular areas of the city—within five or ten streets of each other”.

The report cautioned that entire generations could grow up in “welfare hotspots”, surrounded by fewer working adults and with weaker day-to-day links to employment.

Earlier this month, it was reported that almost two million foreign nationals now receive benefits or the state pension in Britain.

Separate analysis by the CSJ found 1.3million people who are not British citizens receive Universal Credit, including 745,000 Europeans who stayed after Brexit.

And disability claims are said to have risen more quickly in recent years than in the aftermath of WWI.

A study found 8million more working-age people were classified as disabled – under a definition that includes those with mental health conditions – between 2019-20 and 2024-25.

By contrast, 1.6m servicemen had by March 1923 established claims for disability after being injured on duty in the Great War.

Responding to the most recent CSJ report, the Department for Work and Pensions told the Daily Mail: ‘These statistics show that for far too many years, worklessness has been entrenched in many communities and ill-health increasingly used as a reason to be left behind, resulting in the broken welfare system we inherited.

‘We are already reforming the welfare system across the country by narrowing the gap between Universal Credit standard and health rates, restoring face-to-face assessments, and investing £3.5billion in employment support to end the culture of people being signed off and written off.

‘We’re putting work and opportunity at the heart of the system, and the final recommendations from the Timms and Milburn Reviews will lay the foundation for sustainable reform.’