10 March 2006
The government narrowly failed to meet its ambitious target to reduce child poverty by a quarter by 2005, but senior sources are confident that the Department for Work and Pensions will still achieve its longer-term goals.
As Public Finance went to press this week, statisticians from the Office for National Statistics were putting the final touches to figures identifying the number of UK households with below average incomes, due to be published by the DWP on March 9.
They were expected to show that significant progress has been made in reducing child poverty – boosted by Treasury support through Child Tax Credits - with hundreds of thousands fewer children living below the official poverty line since Labour came to power in 1997.
But DWP sources confirmed that they still expected to miss the target to reduce the total figure of households that fall below 60% of median income by over one million (25% of the 1998/99 benchmark figure) by April 2005. One added: 'The figures do show significant improvement in tackling child poverty in recent years…and we are confident that the medium-term targets to halve child poverty by 2010 and to eradicate it by 2020 can still be met.' This week's figures could have significant financial implications when Chancellor Gordon Brown announces his Budget on March 22.
A joint study by the IPPR and Institute for Fiscal Studies think-tanks recently estimated that Brown needs to invest an additional £2bn annually by 2008 if the government is to hit its ultimate target of eradicating child poverty.
Spending on benefits and tax credits for families – part of the Treasury's social protection budget - must rise faster than the rate of growth in average earnings if poverty is to continue falling.
In particular, the figures published this week were expected to show that ministers have failed to reduce London's poverty rates in line with the rest of the country. The IPPR/IFS study estimated that London's child poverty rate stood at 38% compared to 29% across the rest of England, with inner London suffering the highest rate nationally; 54%.
Ian Kearns, IPPR deputy director, said: 'The…agenda needs renewed political commitment. We need to invest up to £2bn a year to fund more generous tax credits and means-tested benefits.'
Kate Green, chief executive of the Child Poverty Action Group, said she was 'disappointed' that the initial target had been missed. But she added: 'We should not forget that in the last six years, hundreds of thousands of children have been lifted out of relative poverty. She called on ministers to 'redouble their efforts.'
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