Government set to miss child poverty targets

21 May 10
The government is unlikely to meet legally binding targets to almost wipe out child poverty in the UK by 2020, the Institute for Fiscal Studies warned today
By Lucy Phillips

21 May 2010

The government is unlikely to meet legally binding targets to almost wipe out child poverty in the UK by 2020, the Institute for Fiscal Studies warned today.

The Child Poverty Act 2010, passed in the ‘wash-up’ before the election, commits the new government to reducing relative child poverty to less than 10% by 2020. Ministers must also publish their strategy for meeting all the four targets in the Act by March 25 next year.

But the IFS said the new government did not ‘set out any concrete details’ in the coalition agreement that was published yesterday, and the policies put forward by both the Conservatives and Liberal Democrats before the election were vague. 

Alastair Muriel, IFS senior researcher, said the targets looked ‘extremely likely to be missed’ and it was unclear if there would be any sanctions for this. He also revealed that earlier Treasury forecasts predicted a rise in relative child poverty in ten years time, to 3.5 million – up from 2.8 million in 2008/09.

Yesterday’s coalition agreement committed the government to ‘maintaining the goal of ending child poverty in the UK by 2020’.  

The warning was among findings in a new IFS report on poverty and inequality in the UK. The researchers found changes in poverty under the previous Labour government were uneven, falling significantly in Scotland and the Northeast but growing considerably in the Midlands. 

Some of the figures were somewhat surprising, with overall poverty rising between 2004/05 and 2007/08, but falling slightly during the first year of recession in 2008/09. Muriel put this down to an increase in ‘generosity of tax credits and discretionary measures by government’, such as higher child tax credits for parents and winter fuel payments for pensioners.

This phenomenon contributed to working age adults without children being the biggest losers, with poverty among this group now at its highest since IFS records began in 1961.

Further analysis relating to the recession was also unexpected. Household income continued to grow, albeit weakly, during 2008/09 despite gross domestic product ‘falling off a cliff’ and unemployment ‘shooting up’, Muriel said. This was helped by a 4.3% average increase in benefits. 

Welfare and benefits are likely to come under increasing scrutiny as the new government attempts to tackle the £156bn public deficit. The coalition deal committed to ‘reducing spend’ on the Child Trust Fund and tax credits for higher earners, as well as reforming the administration of tax credits to reduce fraud and overpayments. Welfare to work programmes will be overhauled, with increased sanctions for those who turn down reasonable offers for work or training.  

IFS programme director Mike Brewer added that further cuts in this area were likely ‘to avoid the incredibly savage cuts that will fall on other public services’.  


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