Poverty costs the taxpayer £1,200 a year, says Joseph Rowntree Foundation

Poverty drags down economic growth and reduces tax revenue as it costs the taxpayer £1,200 a year, according to a social policy charity.

A report by the Joseph Rowntree Foundation said poverty affected different government services with NHS in particular affected.

The report, which contained research conducted by Loughborough and Heriot-Watt universities, said poverty costs the taxpayer £1,200 a year and the country £78bn in total.

About £69bn is spent on public services with knock on effects of child poverty costing a further £6bn and adult poverty about £2.7bn a year.

A large portion of what the government spends publicly is to deal with poverty, such as free school meals, which amounts to about £1 in every £5 spent.

"Poverty wastes people's potential, depriving our society of the skills and talents of those who have valuable contributions to make”, Joseph Rowntree Foundation chief executive, Julia Unwin said.

“This drags down the productivity of our economy, hinders economic growth, and reduces tax revenue."

Professor Donald Hirsch at Loughborough University, who co-wrote the Counting the Cost of UK Poverty report, said: "It is hard even to estimate the full cost of poverty, not least its full scarring effect on those who experience it.

"What our figures show is that there are very large, tangible effects on the public purse. The experience of poverty, for example, makes it more likely that you'll suffer ill health or that you'll grow up with poor employment prospects and rely more on the state for your income."

The report said that £29bn of public money is spent on treating health conditions linked to poverty, £10bn on schools providing free meals and pupil premiums, £9bn on the police and justice system dealing with crime in deprived areas, £7.5bn on children's services such as free childcare for deprived two-year-olds, £4.6bn on adult social care and £4bn on housing.