Consquences of child poverty 'cost £29bn a year'

5 Jun 13
High levels of child poverty in the UK are costing the country at least £29bn every year, or more than £1,000 per household, research shows.

Over half of this cost – £15bn – comes from spending on services dealing with the consequences of child poverty, such as crime and poor educational attainment, according to an analysis by Donald Hirsch, director of the Centre for Research in Social Policy at Loughborough University.

The remainder of the cost is related to the economic consequences of child poverty. People who grew up in poverty are more likely to struggle to find work or be in low-paid employment. A further £2bn comes from money spent on out-of-work benefits, £3.5bn in lost tax receipts due to people earning less and £8.5bn lost to individuals in net earnings.

Hirsch predicts that, if child poverty rises a quarter above its current level following the government’s benefit changes, the cost to the country would increase to at least £35bn a year.

Commenting on the findings, Alison Garnham, chief executive of the Child Poverty Action Group, said: ‘This research shows that policies that increase child poverty are a false economy, costing the country, as well as poor children themselves, dear.

‘We need spending plans that support rather than undermine a new child poverty reduction strategy. Policies must address low-income families’ concerns such as job creation and job security, living wages, and affordable childcare and housing.’

The June 26 Spending Review was an opportunity to change course, Garnham added.

Hirsch said millions of children continue to be damaged by growing up in poor households.

‘The scale of the cost of child poverty to us all continues to dwarf the investment made so far that produced major reductions in child poverty in the past 15 years,’ she said.

‘Because the damage done by child poverty lasts for decades, such investments need to be sustained over a long period.’


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