Child poverty figures predicted to rise by more than half a million by 2013
Monday, October 10, 2011
Child poverty is set to rise steadily over the next decade, while a further 600,000 children are expected to be living in absolute poverty by 2013.
According to the latest forecast from the Institute for Fiscal Studies (IFS), absolute and relative child poverty will stand at 23 and 24 per cent respectively by the financial year 2020/21 – significantly more than the targets of five and 10 per cent, set out in the Child Poverty Act last year.
Meanwhile, the median income of families in the UK is predicted to fall by seven per cent between 2009/10 and 2012/13. This would equate to the largest three-year fall in income for 35 years.
An individual is considered to be in relative poverty if they live in a household whose income is below 60 per cent of the median in that year and in absolute poverty if they live in a household whose real-terms income is below 60 per cent of the median for 2010/11 – as set out in the Child Poverty Act.
The IFS research forecasts poverty for every year between 2010/11 and 2015/16, and for 2020/21, while accounting for the government’s tax and benefit policies, including universal credit.
Taken on its own merits, the IFS believes the introduction of universal credit will reduce relative poverty by about 450,000 children by 2020/21.
But the gains made by universal credit will be offset by the overall effect of government’s tax and benefit changes.
This is because other changes, such as the switch from RPI (retail price index) to CPI (consumer price index) indexation of means-tested benefits, will increase poverty.
James Browne, one of the authors of the report, warned that although the previous government significantly increased spending on benefits and tax credits for families with children, it still fell short of its child poverty targets.
"The Child Poverty Act imposes even more stringent targets in a much more constrained fiscal environment," he said. "Even if there were an immense increase in the resources made available, it is hard to see how child poverty could fall by enough to hit this supposedly legally binding target in just nine years.
"If the government disagrees, then it should set out concrete suggestions about how it will achieve the targets, ideally backed up by quantitative modelling similar to that in our report."
Barnardo’s chief executive Anne Marie Carrie described the projected figures as a "tragedy". "This isn’t just about statistics as every day thousands of families are being forced into making choices between heating or eating," she said.
"The government must put in place a robust strategy for ending child poverty, with clear milestones and targets, to ensure that the poorest do not suffer disproportionately from the current public sector cuts."
Alison Garnham, chief executive of Child Poverty Action Group, said the "devastating" forecast leaves the government’s child poverty and social mobility strategies in jeopardy.
"The government must accept that you cannot fight poverty or improve life chances by making the poor poorer," she said. "Ministers seem to be in denial that, under current policies, their legacy threatens to be the worst poverty record of any government for a generation.
"They risk damaging childhoods and children’s life chances, as well as our national economic wellbeing from wasted potential and social costs spiral. It would be a catastrophic failure in public policy and political leadership."