Whitehall looks for local solutions to child poverty

24 May 07
Local authorities will soon be asked to help Whitehall meet its strict child poverty targets as part of the government's ambitious plan to eradicate the problem by 2020.

25 May 2007

Local authorities will soon be asked to help Whitehall meet its strict child poverty targets as part of the government's ambitious plan to eradicate the problem by 2020.

Councils will also be asked to boost the government's more immediate battle to halve child poverty, against a 1998 benchmark level, by 2010.

Treasury and Department for Work and Pensions sources this week revealed to Public Finance that, in partnership with local government, they are working on a new Public Service Agreement that will require councils to co-ordinate anti-child poverty issues more effectively.

The agreement is likely to be published alongside the autumn's Comprehensive Spending Review, which will introduce a new PSA regime across all departments.

A senior local government source, who has seen a draft child poverty PSA, told PF: 'There is little doubt that councils will be asked to do significantly more on the poverty agenda, even if the PSA simply joins up some authorities' existing work in a co-ordinated fashion and spreads best practice to councils that are currently under-performing.'

The move comes amid growing evidence that the government must spend around £4bn more if it wants to meet its 2010 target.

Gordon Brown has made tackling child poverty a key policy, but despite measures that have raised 600,000 children above the poverty threshold (families with 60% of median income), the government narrowly missed its initial target to reduce the problem by a quarter by 2005.

There is now a growing belief across Whitehall that, to meet both remaining targets, local authorities must play a bigger role. PF understands that the 2007 PSA is likely to focus authorities' attention on the 2010 target.

The exact details have not been finalised, but sources said that councils were likely to be asked to reassess their child care, skills and welfare-to-work roles. Treasury officials are assessing the potential for simultaneous fiscal measures to tackle the problem centrally.

Kate Green, the chief executive of the Child Poverty Action Group, described a locally focused PSA as 'very positive'.

She said: 'At local authority level, many councils haven't really got this issue on their radar and those that have don't really know how to deal with it… So I think it's right to set a framework that deals with this locally.'

Local government has long been committed in principle to tackling poverty, but its roles have often been poorly defined or co-ordinated. In 2004, the Local Government Association, Treasury, DWP and Department for Education and Skills signed an 'accord' outlining how they would work together on the issue.

The Office of the Deputy Prime Minister, which then dealt with local government issues, did not sign up. However, the new Department for Communities and Local Government, led by Ruth Kelly, is keen to do so.

Figures released for 2005/06 show that child poverty increased by 100,000 that year. Brown responded by finding an extra £1bn in this year's Budget, which should lift a further 200,000 children above the threshold.

But a report by children's charity Barnardo's, published on May 23, claims that 900,000 children that could have been lifted out of poverty by 2010 will still be under the threshold unless an extra £3.8bn is spent.

The CPAG this week wrote to all six of the Labour Party's candidates for deputy prime minister reminding them of what is needed to achieve the 2010 target.

The letter calls for extra funds and urges ministers to support measures to reduce income and wealth inequality, a higher child support benefit disregard, changes to the tax system to improve redistribution and higher-valued benefits.

However, the government faces a stiff challenge: figures published by the Office for National Statistics last week showed that income inequality in the UK has widened for the first time since 2001. That was followed by news that the complex tax credits system, which supports families on low incomes, has been blighted by £9bn in incorrect payments, fraud and error since 2003.

Philip Hammond, the Conservative shadow secretary for work and pensions, told PF that this exposed the government's 'now discredited' welfare agenda.

'The focus of the system should be tackling poverty, yet we're seeing rising levels and problems with tools designed to tackle the issue, such as tax credits. Gordon Brown's approach, using tick box targets and transfers of cash to alleviate poverty, is merely an awkward short-term fix,' he said.


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