www.cpag.org.uk

Child Poverty – A National Perspective

28 June 2011

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Child Poverty Target

• 1999, PM Tony Blair:

‘I will set out our historic aim that ours is the first generation to end child poverty for ever; and it will take a generation. It is a 20 year mission but I believe it can be done.’

• Set target to end child poverty by 2020

• Reduce by one quarter by 2004/05 (75% of 1998/99 level)

• Halve it by 2010/11 (50% 1998/99 level)

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Making the target legally binding:The Child Poverty Act• Poverty lobby campaigned for target to become law

• Key role of End Child Poverty Campaign (150 orgs)

• Historic cross-party consensus

• Target becomes binding legal duty - March 2010

4 measures:

1. Headline rate – relative measure - 60% median BHC

- ‘eradicated’ – below 10% (now 22%)

2. Income and deprivation

3. Persistent poverty

4. Absolute poverty

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Child Poverty Act

6 elements:

• Duty to end child poverty

• Duty to publish strategy (inc. ‘building blocks’)

• Independent Child Poverty Commission

• Annual Report

• Work with local partners

• Depending on: ‘economic and fiscal circumstances’

2020: Long way to go• Child poverty doubled 1979 – 1997• Progress since 1999 - Would have been 2 million more

poor children without these measures (Treasury, 2009)• but long way to go• 1979 1997 1998/99 2010-11

% (BHC) 13 27 26 20

% (AHC) 14 33 34 29

No.(BHC) 1.8m 3.4m 3.4m 2.6m

No.(AHC) 2.0m 4.2m 4.4m 3.8m(Poverty = below 60% median equivalised, household income, Department of Work and

Pensions (2010) HBAI: 1994/95-2009/10)

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What worked? 1

Financial support families with children – tax credits:

• Families with children better off by £2,000 per year in 2010 compared to 1997

• Poorest fifth better off by £4,500 per year in real terms

• Falling risk of poverty in workless households also reduced numbers (has risen again since 2008)

• Real impact on lives – FACS – reduced debt etc.

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What worked? 2

Getting more parents into paid work:

• Tax credits

• NMW

• Employment programmes

• Lone parents – emp. up 12% since 1997

• (45-57%)

• Worklessness in couple families

• (fell 5% between 1997 – 2007/08)

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What worked? 3

Childcare provision:

• Free nursery places – now 15 hours a week

• 80% costs paid in WTC (reducing to 70%)

• Childcare Act 2006 – duties on LAs to ensure sufficient childcare for working families

The Coalition Government

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Govt’s CP Strategy 2011 – a new approach to child poverty?

• Supporting families to achieve financial independence

• Supporting family life and children’s life chances

• The role of place and transforming lives

• Translating our vision into reality

• Child poverty indicators and timelines

New Indicators

• Family resources (e.g. income targets and new severe poverty measure)

• Family circumstances (e.g. children in workless households, in-work poverty)

• Children’s life chances (e.g. school attainment, teen pregnancy, youth offending, family structures)

• 18-24s in or not in f-t or p-t education• Birth weight• Child development• Attainment gaps• Progress to HE• Teen pregnancies• Youth offending• Income poverty and family structure

Good ideas• Income measures still there

• Life-cycle and broad perspective is good

• Removing financial disincentives to work

• Acknowledges extent of in-work child poverty

• Support to parents

• Focus on debt

• Enabling children to fulfil their potential

• Important role of education

• Importance of investment in services

• Focus on communities, local authorities and local partners

• Focus on tackling poor health

A bit of a worry• Severe poverty?

• Family structures?

• Emphasis on ‘causes of poverty’ or ‘underlying drivers’ is not substantiated, eg: − only 2.7% families include an alcoholic parent, 0.9% a drug

dependent one− Family breakdown as a ‘cause’ – depends which country you live

in

• ‘Cycles of poverty’ rhetoric – behaviour not structures

• Review of statutory duties – DCLG

• Not much on information, advice and assistance – except on debt and money management (9(5)(c) CPA)

More concerns

• Annex B – policy delivery− Includes benefit cutting measures

• Denigrates income targets− ‘narrow income targets’− ‘poverty plus a pound’

• Potentially unlawful?− No advice from Commission - S.10 CPA− No attempt to describe the expected progress in

achieving targets - S.9(7) CPA− Only ‘positive directional improvements’ – p.21

Budget and Spending Review 2010

• £81bn cut from the public sector in benefits and services

• £18bn in benefit cuts compared to a £2bn tax on bankers

• CB freeze and cut, tax credits slashed (disregards, taper, help with childcare, etc), baby/toddler elements, HiP grant, SS grant, Child Trust Fund, cuts to DLA and HB

• Families, particularly with young children hardest hit

Child poverty set to rise• Claim - no measurable impact on child poverty for the

next two years – up to April 2013

• Child Tax Credit increase – due to discipline imposed by Child Poverty Act

• Latest IFS analysis showed both absolute and relative child poverty will rise between 2010/11 and 2013/14 (IFS, Dec 2010)

• Also likely to be rises in persistent poverty and in deprivation levels.

• Leaves a massive task - to reach 2020 child poverty target requires 10.5% reduction in figures – has not fallen by such a rate since at least 1961 – when stats began

Making progress locally• National Foundation for Educational Research report on

local authority led child poverty strategies

1. reducing worklessness through community-based• education and employment schemes

2. improving financial literacy and money-management • skills and enhancing benefits advice

3. improving children’s health outcomes through• targeted interventions e.g. Free School Meals take up

4. giving children the best start in life by focusing on• early years provision.

Making progress locally (nfer report)

1. Keeping interventions specific, family focused andmanageable, for example, by focusing on particularneighbourhoods, families or groups.

2. ‘Poverty-proofing’ all LA strategic plans in order tomake sure that poverty policy has high status acrossthe LA and to make sure that it is ‘everyone’sbusiness’.

3. Ensuring that child poverty does not become‘marooned’ solely as a children’s services issue.

4. Self-monitoring and evaluation of both processes andoutcomes, and sharing of good practice, both acrossthe LA partnership, and through regional networks.

Impact of the cuts

• Children suffer if parents less well off in work, and lives disrupted if family has to move due to HB cuts – away from schools, communities, family and friends.

• Inflation – food, fuel (esp if living in poor housing)

• Health – Marmot;

• Even bigger cuts hit families after 2013 –eg, change to up-rating benefits by CPI, rather than RPI which has a cumulative effect.

• Major additional action will be needed after 2013 to avoid even steeper rises in child poverty

Universal Credit• Big means-test – good to try to simplify & improve unemployment trap• No losers at point of introduction? Cuts imposed before 2013• Impact on work incentives – depends on money going into it – will be

complex, have high withdrawal and high marginal tax rates – contributes to poverty trap

• IFS preliminary analysis showed single parents and partners in couples will have worse work incentives (IFS, Jan 2011)

• risks to women’s independent income and incentives for partners in couples to work or for lone parents to progress in work.

• no decision yet about childcare costs • Meanwhile incomes and work incentives already damaged through

major cuts to tax credits –eg, increased tapers, frozen rates, cutting help with childcare costs – up to £30 a week

• Cost of entering work for an average-waged, second earner 68% effectively taxed away, compared to OECD average of 52% (OECD, 2011)

Some conclusions• Frank Field suggested trade-off each year between

investing in early years and benefit increases – theme running through ‘strategy’− You have to tackle both current circumstances and future

prospects – there isn’t a trade-off worth having here.

• On the same day - UNICEF report card 9 showed the UK coming way down league table of countries on tackling child wellbeing and inequality− UK did well at reducing inequalities through universal health and

education services – but let down by very poor record on income inequality and child poverty – key point

• Due to increased investment in cash supports and childcare, child poverty fell more than in any other OECD country (1995-2005) (OECD, 2011)

More conclusions• Tackle low pay and quality of jobs

• Ensure Universal Credit works to improve incentives to work and to progress in work – invest more, lower taper, improve design

• Benefit cuts will damage all this – need to think again