Child poverty costs UK £29bn annually, research estimates

By Joe Lepper

| 19 July 2013

Child poverty costs the UK economy £29bn a year, according to latest research by the Child Poverty Action Group (CPAG).

Poverty is estimated to cost the UK £29bn a year

Its report, Local Authorities and Child Poverty: Balancing Threats with Opportunities, contains a detailed breakdown of the areas with the highest child poverty rate and the estimated cost to the local economy based on additional health, education and benefits demands. The estimates also take into account loss of future tax revenue.

The four areas with the highest child poverty rate are Birmingham, Manchester, Glasgow and Bradford.

The research found that each year child poverty costs Birmingham’s local economy £914m, Manchester's £446m, Glasgow's £395m and Bradford's £360m.

The areas with the lowest child poverty bill are the Shetland Islands and Rutland, where child poverty costs the local economies £4m each.

The research – carried out by Donald Hirsch, director of the Centre for Research in Social Policy at Loughborough University – estimates that nationally the cost to education and health budgets of dealing with child poverty is £15bn, and £3.5bn is lost in taxes by adults who grew up in poverty when they were children. In addition, £2bn is spent on benefits for people who are out of work as a result of  living in poverty as a child, and £8.5bn is lost in their net earnings.

The research has been published to help councils understand the scale of the cost of child poverty in their area and urge them to put in place strategies to reduce child poverty.

CPAG chief executive Alison Garnham said: “Every council is required by law to have a local child poverty strategy. The good news is that reducing child poverty benefits everyone by cutting the costs to local authority services and boosting the local economy through improved skills and qualifications for school leavers.”

She also called on poverty campaigners to use the report to lobby local councillors to do more to combat child poverty locally.

CPAG wants the government to step up monitoring of local child poverty strategies, after researchers were told by council officers that the lack of clear timelines was “a disincentive to producing them”.

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