The report, published today by the Townsend Centre for International Poverty Research at the University of Bristol, says Labour's anti-poverty policies are ineffectual because they focus on small geographical areas and do not address the people most in need of help.
'Their policies will be good in the short term but they won't have the effect of reducing crime or improving health or education levels long term because area-based policies have been shown not to work,' said Dr David Gordon, one of the report's authors.
But the government rejected the conclusions of the report. 'Unlike the authors, we believe that work is the best route out of poverty,' said Alistair Darling, social security secretary.
Dr Gordon said the government's use of competitive tendering meant that the better organised, rather than the most needy, received state aid.
The report, 'Tackling inequalities: where are we now and what can be done?,' says Labour's new deal is likely to be undermined by the lack of jobs in many cities.