Posted: 01 July 2015

Abolishing child poverty targets masks true extent of in-work poverty

This afternoon the Government announced its decision to end its commitment to end child poverty by 2020, replacing this with new duties to report on progress on worklessness and educational attainment. 

The announcement comes just 6 days after the Government released their annual Households Below Average Income (HBAI) statistics – the measures which until today had been used to hold the Government to account on its child poverty target.  It had been widely predicted in advance of the release that there would be an increase in child poverty over the last year, but the official statistics showed that child poverty remained static at 3.7m children After Housing Costs (AHC).

However, this does not reveal the true picture. 

A closer look at the data shows that the number of children in families living on less than 50% of medium income has risen from 2.2m to 2.4m over the last year – meaning that there are 200,000 children living in more severe poverty.  So whilst the overall number of children living in poverty has remained static, the depth of this poverty has increased. 

Fig 1. Children living in families below 50% and 60% of median income (millions) 2010/11 – 13/14Children living in families below 50% and 60% of median income

There has also been an increase in the proportion of children in poverty who are living in working families – now at 62% of families in poverty, which shows that  in too many cases, where families are moving into work they are not moving out of poverty.  These families are all but forgotten in today’s announcement. 

Fig 2. % of children in poverty after housing costs where at least one parent is in work (2010/11 – 13/14)

% of children in poverty after housing costs where at least one parent is in work 

Income must be at the heart of measuring child poverty

Until today, The Child Poverty Act legally bound the Government to a commitment to eradicate child poverty in Britain by 2020.

However,  as the Government announced today, it wants to move to ‘addressing the underlying causes’ rather than viewing progress against an income based target, as it currently stands. Whilst there are many factors that contribute to families falling into and becoming trapped in poverty, the ability to maintain a reasonable standard of living and afford essentials is at the heart of the matter. 

The implication that the drivers of poverty are best captured by measures including family breakdown, problem debt and drug and alcohol dependency means that we would see a fundamental shift away from an income-based measure for child poverty.  

Consideration of whether current child poverty measures adequately reflect the impact of debt on household spending power and the additional costs of work, such as childcare and travel costs would be welcome. However, family income must remain at the heart of how we measure child poverty in Britain.

There is a solution

This comes at a time when the Government is considering changes to support for families in the Budget next week. There over two million children living in poverty where at least one parent is working, and the any cuts to child tax credits will only drive these children further into poverty. These families will as a result face further difficulties in making ends meet and providing for their children.

Along with the End Child Poverty coalition we are also calling for the Government to introduce a ‘triple-lock’  on Child Benefit and Child Tax Credit which would make sure that these key benefits either rise in line with prices, earnings, or by 2.5%, or whichever is the highest. This would see 310,000 fewer children living in absolute poverty by 2020 than under the Government’s current policy.

 

By David Ayre - Policy team