Empty promises? By Alex Klaushofer

14 Dec 06
The government's target is to halve the numbers of UK children living in poverty by 2010. But success rests on adequate funding, and campaigners doubt that enough money will be provided in next year's Comprehensive Spending Review. Alex Klaushofer reports

15 December 2006

The government's target is to halve the numbers of UK children living in poverty by 2010. But success rests on adequate funding, and campaigners doubt that enough money will be provided in next year's Comprehensive Spending Review. Alex Klaushofer reports

Christmas might or might not come for the Abiri family this year. James, 14, and Samuel, six, sensing that their annual treat hangs in the balance, have been plaguing their mother with questions in the run-up to the big day. 'Yesterday they said, “Mummy, are we getting Christmas or not?”,' says Hannah. 'I say, “I don't know”. When I was working the boys never asked me, because they knew they were getting what they want.'

Christmas presents have become a luxury since Hannah lost her job as a seamstress in August 2004 when her company relocated to the countryside in search of cheaper labour. Since then, she has been struggling to feed and clothe the boys and keep the family's two-bedroom council flat in south London running on income support and tax credits of about £100 a week, after housing costs. 'The only way I could buy them what they want is if I didn't pay my bills,' she says. 'I can't stand debts – I've never taken a loan, not even from a bank.'

The problem of how to get families such as the Abiris out of poverty is one of the main policy conundrums of the winter of 2006. Since New Labour pledged in 1999 to halve the numbers of children living below the poverty line – defined as 60% below the median UK wage – by 2010 and to eradicate it altogether by 2020, child poverty has moved higher up the political agenda.

So far, the government has been only partially successful in this aspiration. Its interim target was to cut the number of children living in poverty from 4.1 million, the 1999 benchmark figure, to 3.1 million by April 2005. It achieved a reduction of 700,000, 300,000 less than planned. That left 3.4 million children – a quarter of the nation's total – officially poor.

Nor does the future look much brighter. This month's Pre-Budget Report was education and skills-focused, and raised child benefits in line with inflation. But the chancellor offered few measures to tackle child poverty head on.

As a result, experts are repeatedly pointing out that if something doesn't change, the government will miss its 2010 and 2020 targets altogether. A rash of reports has been published this year, replete with analysis and solutions. In March, the Fabian Society's commission published a detailed analysis of the links between child poverty and life chances; in July, research by the Joseph Rowntree Foundation put a £4bn price tag on meeting the 2010 target; and, earlier this month, a study by the New Policy Institute concluded that low pay was a major cause of poverty.

Not to be outdone, the Department for Work and Pensions has made child poverty its number one priority and commissioned its own research by leading social policy expert Lisa Harker. Her report, published last month, Delivering on child poverty: what would it take?, gave the government the double-edged message that its welfare-to-work policies are necessary but not sufficient.

Meanwhile, anti-poverty campaigners have been out in full force. In November, the End Child Poverty Campaign, a coalition of 50 influential UK charities, concluded a month-long campaign that turned on a call for the chancellor to commit £4bn in the 2007 Comprehensive Spending Review to meeting the 2010 target.

Earlier this month, Citizens Advice warned that without a complete overhaul of the error-laden tax credits system, the child poverty targets would be missed. Even the Conservatives have joined the great poverty debate, embracing the Leftish definition of relative poverty (the amount it costs to participate in society rather than purchase the basics for survival), and citing Guardian columnist Polly Toynbee as a model for social policy thinking.

As if all this soul-searching and lobbying wasn't enough, the Farepak fiasco has further highlighted the seasonal plight of the poor. The collapse of the Christmas hamper company in October meant that 150,000 of Britain's poorest families lost £50m of the money they had been putting aside for the festive season all year. The result, according to Rosie Graham, marketing officer at the One Parent Families charity, is that they are likely to pay for Christmas in the only way they can – by borrowing money from doorstep lenders at astronomical rates of interest that will impoverish them for the year ahead.

'What Farepak's done is that, this Christmas, [the families affected] will get into four times as much debt,' she says. As a single parent who has lived on benefits herself, Graham understands the psychology that leads to this kind of cycle. 'You still want to fulfil your child's Christmas, and if that means getting into debt, you will,' she says.

The Farepak collapse highlights the lack of savings schemes available to the poor, says Sonia Sodha, research fellow at the Institute for Public Policy Research. 'Low-income families are the most likely to need savings, but the least likely to have them,' she says, pointing out that three out of five families living on £150 a week or less have no savings at all.

Her research into the Saving Gateway scheme now being piloted by the Treasury, where the government matches savings with its own contribution, suggests that a national roll-out would help the worst-off prepare better for rainy days.

The Treasury, awaiting the evaluation of the second round of pilots in the spring of next year, is making positive noises about a national scheme. 'The early results are encouraging,' says a spokesman. 'Provided we target the right people, it can make a difference.'

The Department for Work and Pensions is also considering a proposal from Save the Children to give children from poorer families two annual payments of £100 towards the extra expenses of Christmas and the summer holidays, plus a further £100 towards the household's fuel bills. In a survey of almost 1,600 low-income families this summer, the charity found that 77% struggled to cope at Christmas.

'It is a small amount, but it would make a difference to families,' says Save the Children's policy adviser Dr Jason Strelitz. 'We're talking about families on very low incomes, who make money go a long way.'

But while such measures would undoubtedly have an impact, it is the bigger issues that will determine whether the child poverty targets are met. Harker's report endorses the welfare-to-work approach espoused by the government, but it also identifies huge challenges for the state in making such programmes realistic routes out of poverty.

'Welfare to Work programmes need to be more attuned to the particular needs of parents,' writes Harker. 'To thrive in today's rapidly changing labour market, parents need guidance, support and skills.'

Hannah Abiri's situation illustrates many of the problems that need to be overcome. With opportunities in her industry shrinking and limited reading skills, she was ill equipped for most jobs. Classes in literacy and computing at the Baytree Centre in Brixton have largely remedied this, while voluntary work as a teaching assistant in a local school has broadened her skills base. But she still has the problem of childcare, which caused her to turn down a recent job offer.

'They want someone who can work Saturday and Sunday,' she says. 'That's the only time we sit together round the table.' Having been quoted childcare costs of £250 a week for her youngest during the school holidays, she finds it hard to envisage a Monday to Friday job that would pay enough.

'If I'm going to let him go to childcare, I won't be able to save a penny in my hand,' she says. 'I've got to consider their food.'

As a low-income family living in London, the Abiris are also an example of the high levels of child poverty that prevail in one of the richest cities in the world. Research by the London Child Poverty Commission, which was set up specifically to address the capital's high levels of child poverty, found that 53% of children in inner London were living in poverty after housing costs in 2004/05, compared with 28% of children in Great Britain as a whole.

'We think that some of the reasons for the higher rates of poverty is partly because London has a higher proportion of groups that face barriers to going into jobs,' says commission chair Carey Oppenheim. 'It's going to be hard to reach the UK target in 2010; it will be even harder to reach the London target,' she adds. With the numbers of lone parents going into employment in the capital lagging behind those elsewhere, the solution lies in measures to make work pay more and family-friendly support involving childcare and training, she thinks.

Although this is difficult, overcoming such obstacles remains broadly in line with the New Labour orthodoxy that work is the route out of poverty. But other elements of the Harker analysis challenge this sacred cow, arguing that much more fundamental, redistributive steps are needed if the government is serious about seeing off child poverty – precisely the kind of approach that it has carefully avoided since it came to power.

Anti-poverty campaigners agree. 'They are probably reaching the limit of what they can do without properly explaining to the public why redistribution and balancing wealth inequality is something that's going to benefit us all,' says Kate Green, chief executive of the Child Poverty Action Group. 'I'd like to see the government being a bit braver.'

She and other campaigners want more money to flow from the state coffers to households such as the Abiris, via more generous benefits and tax credits. 'One of the crunch issues is whether they are prepared to do something about benefits,' says Ruth Lister, professor of social policy at Loughborough University. Raising benefits for adults – who have become poorer in recent years – would make a real difference to children, she thinks. 'The family is one unit in terms of budgeting,' she says. 'I think the government's very resistant.'

With the public sector tightening its belt ahead of the next spending round, campaigners are keenly aware of the difference between their aspirations for ending child poverty and what the government is prepared to do. 'I think we all agree that it needs to be fixed, and I don't doubt their commitment about that,' says the director of the End Child Poverty Campaign, Hilary Fisher. 'But every time you talk to government, they all say it's a very tight spending round.'

Harker agrees. 'There's a reality gap between the ambition and the resources that are being put into this,' she told Public Finance. 'It will take a big change to the shape of our society, and it can't be done on the cheap or quickly.'

Experts point to the politics behind the budgeting. Lister says the government has been doing good by stealth, quietly putting more money into the family purse by doubling income support for children since 1997. But in public it seeks to avoid criticism from the Right by pursuing policies that appear to reward the deserving, working poor rather than raising benefits. 'They are always looking over their shoulder at the Daily Mail, and that tranche of opinion,' she says. 'So it's all about getting people into work, and being seen not to be generous to people who aren't in work.'

The policy shift required to make a deeper impact, Harker argues, would involve a change in the political consensus, which in turn is rooted in broader social attitudes to poverty. 'It requires public buy-in, because it requires taxpayers to re-allocate the money, and it's a big question whether the government has the mandate to do that,' she says.

So far, the evidence suggests that British public opinion remains uncompromising. 'The evidence is that it hasn't shifted,' she says. 'As we've gone through a period of great affluence and growth, people's level of understanding of poverty hasn't increased.' And bringing about change on this level, according to Fisher, is a real challenge: 'People don't recognise poverty and they don't understand it,' she says. 'We need to talk about what it looks like, what it feels like. What we really want is much more engagement by people and local authorities in local communities on the issue.'

Others go further, questioning the entire basis of Britain's policy on poverty and seeking lessons from abroad. Professor John Veit-Wilson, visiting professor in sociology at Newcastle University, disputes that the widely accepted definition of poverty as 60% below median income makes much sense. 'The current measure is a perfectly justifiable measure of income inequality,' he says. 'What it does not measure is how much money you need to live on.'

Instead, he argues, Britain would do better to base measures of poverty on the cost of living – understood as in terms of what it costs to participate in society – like Scandinavian countries, paying for it out of taxation. 'They don't allow the degrees of inequality that are allowed in this country,' he says.

From the Right, Nicholas Boys Smith, author of a recent report on welfare at the think-tank Reform, disagrees fervently. 'I don't have much truck with critics from the Left,' he says. 'The whole debate has gone crazy. It is not compassionate to give people benefits and keep them on benefits.' What the government should be doing, he insists, is making its welfare-to-work approach more effective, by outsourcing schemes to the private and voluntary sectors, as Australia and some US states have done. 'The government's rhetoric is spot on; the problem is that they have bungled the delivery,' he says.

In the meantime, the anti-poverty sector is waiting anxiously to see whether the government will make the levels of investment they consider essential to tackling child poverty. The chancellor's Pre-Budget Report announcement that from 2009 expectant mothers will receive child benefit from the twenty-ninth week of pregnancy has done little to allay their fears that it will not. The government's response to the Harker report, due in the New Year, will, according to Green, 'be a real test of whether they are seriously prepared to do what it takes to meet the 2010 target. Time is running out – it will be too late in another year.'

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