[barnardos free docs.]poverty executive summary

8/14/2019 [Barnardos Free Docs.]Poverty Executive Summary

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The reality o child poverty in the UK

It doesn’thappen here

E X E C

U T I V E

S U M M

A R Y

B a r n

a r d o ’ s

U K

B a r n a r d o ’ s U

K

A member o the Campaign to End Child Poverty


http://slidepdf.com/reader/full/barnardos-free-docspoverty-executive-summary 2/8I t doesn’t happen here

‘I know that money cannot

buy happiness and mychildren have loads o love,but having enough money

is important to ensure mychildren are well lookeda ter and have the things

that they need in li e.’Karen, Tullycarnet FamilyProject, Bel ast


http://slidepdf.com/reader/full/barnardos-free-docspoverty-executive-summary 3/8Barnardo’s Executive Summary

IntroductionIn March 1999 the Prime Minister made ahistoric and ambitious pledge to end childpoverty within a generation. There are now600,000 ewer children living in poverty thaneight years ago, or whom quality o li e and

uture opportunities are improving. But ar toomany children are still le t behind. The lives o

.8 million children in the UK – one in three – are blighted by poverty. 1 Child poverty in theUK is double what it was in 1979 and is wellabove the European average. A ter a slow butsteady all in child poverty rom the late 1990s,progress now appears to have stalled and oncurrent policies there seems little prospect o

the Government meeting its milestone targeto halving child poverty by 010.

This report is a summary o a wider UK study (called It doesn’t happen here ), based oninterviews with over 40 amilies with whomBarnardo’s works. These include children in black and minority ethnic amilies, those in amiliesstruggling on low wages, lone parent amilies,

amilies a ected by disability and large amilies,and other vulnerable groups, including children inasylum-seeking amilies, children in poor housingand young people living independently.

Additional modelling carried out by the Instituteo Fiscal Studies, using the baseline o 004/05HBAI, estimates the poverty rates or thesegroups o children in 010 on present policiesand i an additional £ .8 billion was spent.

The case studies illustrate the daily grindingstruggle that low income amilies in the UK acein providing a decent childhood or their children.

The problem: inadequateincomes and low wages

In 005/06 a couple with two children livingin the UK spent on average £64 a week.

The amilies interviewed or the Barnardo’s

It doesn’t happen here report had incomesar lower, and in most cases well below the

Government’s own poverty line. 4 For example,Heather, 5 a lone parent with three children, isliving on bene ts o £ 10.44 a week, 6 or £40.56below the Government’s own poverty line. 7 And Jill,8 aged 17, lives on her own and is puttinghersel through college on £75 a week.

Poverty does not only a ect children whoseparents are out o work. More than hal o poor children in the UK live in amilies with atleast one earner. 9 Ending child poverty requiresredistribution through the tax and bene tssystem to provide an adequate sa ety net and

to make work pay. It also requires long-termsolutions to address the causes o poverty.

‘You don’t expect li e to get any better, you just struggle all the time,

you think this is li e.’ Heather, Barnardo’s Ely Family Centre, Cardi


http://slidepdf.com/reader/full/barnardos-free-docspoverty-executive-summary 4/84 It doesn’t happen here

Keeping the childpoverty promiseBy investing an extra £3.8 billion

Keeping its promise to halve child poverty by 010 will require the Government to spend a

total o £ .8 billion more by 010 than currently planned. On current policies, there is littleprospect o the 010 target being hit.

What would the £3.8 billion

investment mean?

With an additional £3.8 billion investmentthere could be, by 2010, across the UK(compared with 2004/05):

n 320,000 ewer poor children inlone parent amilies

n 90,000 ewer poor children in two-parentamilies where one parent works ull-time

and the other parent does not work

n 240,000 ewer poor children in amilieswith a disabled adult

n 50,000 ewer poor Pakistani andBangladeshi children.

Without the additional £3.8 billion investmentthere could be by 2010 (compared with2004/05):n 70,000 more poor children in two-parent

amilies where one parent works ull-timeand the other parent does not work

n 40,000 more Pakistani and Bangladeshichildren living in poverty

n 30,000 more poor children inlone parent amilies.

In his commentary in the main report It doesn’t happen here , Donald Hirsch reminds us thatthe battle to reduce child poverty has reached a critical juncture.The key drivers or the allin child poverty to date – more generous

tax credits and bene ts and wel are to work policies – will see diminishing returns. This isboth because the amilies li ted out o poverty

thus ar are likely to have been the easiest

to help, and because the current system or increasing bene ts and tax credits allows bene tincomes to all relative to average earnings.

To meet the Goverment’s target to halve childpoverty (de ned be ore housing costs) thenumber o children in poverty needs to all

rom .4 million in 1999 to 1.7 million in 010.It is currently .8 million and needs to all by a urther 1.1 million. The Institute or FiscalStudies (IFS) has estimated that the additional£1 billion spending on tax credits announced in

the 007 Budget will reduce child poverty by a ur ther 00,000 by 010. This will mean theGovernment missing its target by some900,000 children.

On the basis o urther estimates by the IFSor this repor t, which take account o changes

in the 007 budget, the 010 target could beachieved by increasing the child element o child

tax credit by a urther £11 a week at 007

prices and giving amilies an extra £ 0 per week or the third and subsequent children through the amily element o the child tax credit. Thiswould mean the Government spending £ .8billion more in 010 than currently planned.

What does this mean or individual groups o children? A urther breakdown o the estimates

rom the IFS shows the prospects or the mostvulnerable children with and without the extra£ .8 billion spending (Figure 1).

Figure 1: Projections o child poverty risks to 2010

2004/5 poverty rate

2010 on present policies

2010 with £3.8 billion investment

O n e

f u l l t i m e e a r n e r ,

o n e n o t w

o r k i n g

3 c h i l d r e n

D i s a b l e d c h i l d

I n d i a n

D i s a b l e d

a d u l t

B l a c k o r B l a c k B r i t i s h

L o n e p a r e n t

4 c h i l d r e n

P a k i s t a n i / B a n g l a d e s h i

L o n e p a r e n t n

o n - w o r k i n g

80%

70%

60%

50%

40%

30%

20%

10%

0%



By giving wider help to amilies

By investing an additional £ .8 billion onbene ts and tax credits the Governmentcould meet the 010 target. But a wider range o policy responses is necessary to

tackle the root causes o child poverty – toremove barriers to work, to ensure that work pays and to ensure that children in poverty noware equipped to escape their parents’ ate andavoid bringing up their own children in poverty.

Employment – the case studies show thatmost parents wanted to work and saw thisas a way out o poverty, but experiencedreal barriers to getting a job and staying in it.The lack o ‘so t’ skills and quali cations keepsmany parents, especially lone parents, out o

the labour market. However, work is not aguaranteed route out o poverty and Section

o the report shows how low wages and thehigh costs o childcare or parents are o ten nobetter o in work than on bene ts.

The Government is right to ocus on work as the best route out o pover ty. But at presentgetting a job too o ten means moving romworkless poverty to working poverty. As therecent report o the Equalities Commission 11 made clear, women and many ethnicminorities still ace structural disadvantagein the labour market. Employers need to

take their responsibilities more seriously toenable working parents to combine work withparenting responsibilities. And to achieve thehigh skill, high productivity work orce necessary

or the UK to compete in the global economy,parents who have been most disengaged rom

the labour market need targeted help to getand to progress in work.

Childcare – all our UK governments havemade a signi cant investment in expanding highquality childcare, particularly in disadvantagedcommunities, through programmes such asSure Start Local (now children’s centres) and

the Neighbourhood Nurseries Initiative (NNI).This has enabled many poorer parents to accesschildcare and to return to work – 9 per cento parents using neighbourhood nurseries said

that this helped them to work, with per centsaying they could not have worked otherwise.

The impact was greatest on disadvantagedgroups, including lone parents and those withno or low quali cations. 1

The rst two bars or each group show that or most groups o children the risk o poverty will change relatively little between

004/05 and 010 under present policies.A stark exception, however, is children romPakistani and Bangladeshi amilies, whose

already high risk o poverty is very likely toincrease. The most recent poverty gurespublished in March 007 10 seem to show

that poverty or this group is rising, and the IFS projections suggest that this willcontinue, with about two-thirds in poverty by 010.



Sure Start Children’s Centres andNeighbourhood Nurseries bene ted romstart-up unding, enabling them to o er subsidised or even ree places to the mostdisadvantaged amilies. New research raisesdoubts about the sustainability o such provision,particularly in poorer communities. As start-up

unding tapers o , nurseries are increasingly charging market rates, reducing sta numbersand o ering ull-time places instead o part-timeones. 1 Some may even have to close.

The case studies show how the lack o appropriate and a ordable childcare continues

to be a barrier or parents who want to go back to work. Help with childcare costs is available through the tax credit system 14 but the highcosts o childcare, especially or amilies with

disabled children or those caring or more than two children, have the e ect o either keepingamilies out o the labour market or leaving

them no better o in work.

Poverty in school holidays – or the majority o children in the UK, school holidays meanholidays away rom home and exciting eventsand trips. For amilies on a low income like theones interviewed or this report, they meanextra hardship – costs on essentials like ood goup but income doesn’t. Holidays become a timeo ‘survival’.15 Compensating amilies or theloss o ree school meals in holidays would helpease the nancial pressure and enable amilies

to provide some sort o positive experiencesduring holidays, such as a trip to the cinemaor a day out, and build on the government’sinitiative to o er two weeks o part-timeholiday provision or children eligible or

ree school meals. 16

Fuel poverty 17 – a 91 per cent increase in the retail price o gas since 00 and a 60per cent increase in electricity prices haveseen a dramatic escalation in the numberso households living in uel pover ty. In 005/06housing uel and power accounted or almostone th o spending in the UK by householdsat the bottom o the income distributioncompared to one ourteenth or those in

the top th. 18

It is estimated that .5 million households in the UK are living in uel pover ty. 19, 0 This isexempli ed by the amilies we interviewed,many o whom were struggling with high uelcosts. They were paying more because many used pre-payment meters (PPMs) to help withbudgeting. Across the main suppliers, gas PPMcustomers pay an average o £70 more per year

than customers on direct debit and electricity customers an average o £10 more per year.Some suppliers have recently cut prices inresponse to the all in wholesale energy prices

– but customers using PPMs have bene tedless than others, or not at all. 1 The poorestare being penalised or taking prudent steps tomanage their money so that they are able topay or their gas and electricity as they use it.

I all our UK governments are to eradicate uelpoverty or vulnerable groups by 010 and or everyone by 016 they must work with energy suppliers to ensure that all customers are on

the cheapest tari s and not penalised becauseo their method o payment.

Debt – many o the amilies interviewed werein debt, to the Social Fund, doorstep lendersor riends and amily. Many o these loans were

to cover the costs o Christmas, birthdays andessential household goods. Lenders, includingsome reputable high street names, are chargingbetween 160 per cent and 800 per cent interesta year on loans, trapping amilies in a viciouscycle o debt. The Government must givepriority to ending the nancial exclusion o lowincome amilies. This includes a radical review o

the Social Fund, which is ailing to meet currentlevels o demand: with re orm it could promote

the nancial inclusion o poor amilies. Banks alsoneed to play their part.



The way orwardBarnardo’s is asking the Government to keepits promise to millions o children to endchild poverty within a generation. We callon the Westminster government, and whereappropriate, the devolved governments o Northern Ireland, Scotland and Wales, to do

the ollowing:

n Invest £ .8 billion to meet the promise tohalve child poverty by 010 and in utureincrease bene ts and tax credits in line withearnings to stop the incomes o the poorest

amilies alling urther behind.

n Establish a UK commission on ending childpoverty, chaired by the Prime Minister or

the Chancellor, which would deliver a road

map setting out the investment and policiesneeded to hit the 0 0 target.

n Aim all government unding and programmesat bene ting the poorest children the most. 4

n Extend access to high quality childcare by ensuring adequate unding to sustain childcareprovision in disadvantaged communities.Reliance on the market alone will not deliver

or our poorest amilies.

n Tackle the additional hardship in school

holidays by compensating amilies whosechildren get ree school meals or the losso these during the school holidays; 5 andworking with local authorities to ensure

that a ordable and age-appropriate holiday activities and childcare are available or all children.

n Tackle uel poverty by working with theprivate sector to make sure that all customersare on the cheapest tari s or utilities and arenot penalised i they cannot take advantage

o payment schemes such as direct debit.

‘Adam, he won’t haveree meals, won’t go in

the ree meal queue,it’s like a card and people will say ‘oh youare a Nashy’ i you

have got this type o ticket. So I give himmoney. Nash, the Nash,its slang or benefts.’ Michelle, Barnardo’s HiveProject, Sunderland, North East



Re erences1 The latest Households Below Average Income survey or 005/06 shows

that there were .8m children living in poverty on an a ter housing costsmeasure – an increase o 00,000 since 004/05 – and .8m be orehousing costs – an increase o 100,000 over the previous year (Department or Work and Pensions, 007a)The original modelling was carried out or the Joseph RowntreeFoundation, Brewer, Brown and Sunder land ( 006) Microsimulating child poverty in 2010 and 2020.

O ce or National Statistics – www.nationalstatistics.org.uk/pd dir/e s0107.pd - excluding mortgage interest payments and council tax

4 This report uses the same de nition o poverty as used by theGovernment in Oppor tunity or All (DWP, 00 ).The poverty line is60 per cent o median income level – where the median is the level o income a ter direct taxes and bene ts, adjusted or household size, such

that hal the population is above the level and hal below it. This de nitionis a standard that changes as median income levels change; it is a measureo relative poverty. People living in poverty are de ned as those living onless than 60 percent o median income, a ter housing costs.

5 Sharma et al ( 007), It doesn’t happen here The reality o child poverty in the UK , Barnardo’s, Barkingside

6 A ter housing costs – that is, rent/mortgage and council tax7 All bene t gures relate to 005/06 bene t levels and are a ter

housing costs – the poverty line used is rom 004/05 Households BelowAverage Income (Depar tment or Work and Pensions, 006a), updated to 006.

8 Sharma et al ( 007), It doesn’t happen here The reality o child poverty in the UK , Barnardo’s, Barkingside

9 Department or Work and Pensions ( 007a)10 Department or Work and Pensions ( 007a)11 Equalities Review Panel ( 007)1 La Valle e t al. ( 007)1 Smith et al. ( 007)14 Up to 80 per cent o costs: up to £175 or one child and £ 00 or two

or more children15 Gill O and Sharma N ( 004) Food poverty in the school holidays.

Barnardo’s South West, Bristol16 HM Treasury and Department or Education and Skills ( 007)17 The Government’s de nition o uel poverty is when a household needs

to spend 10 per cent or more o income to maintain a satis actory heating rgime. Any household spending 0 per cent or more o incomeon heating is deemed to be in severe uel poverty. (DWP 006b)

18 O ce or National Statistics ( 007)19 National Energy Action and Energy Action Scotland ( 006)

0 DWP ( 006b)1 www.energywatch.org.uk/media/news/show_release.asp?article_id=10

From www.debt-on-our-doorstep.com/DooD_Leafet_ nal.pd Estimated by the Institute or Fiscal Studies or this repor t. Thiscould consist o a £ 0 premium in child tax credit or the third andsubsequent child and £11 a week extra on the per child element o child

tax credit.4 The Depar tment or Work and Pensions and the Welsh Assembly are

‘poverty proo ng’ all policies or their impact on child poverty and theWelsh Assembly has introduced ‘programme bending’ aimed at ensuring

that all unding and programmes bene t the poorest children and amilies the most.

5 This will cost £98 million in England , £6 million in Wales, £9.5million in Scotland and £5 million in Northern Ireland or primary andsecondary school children. This would cost about £90 a child in the UK

or 1 weeks o school holidays

‘He had two invitesto go to parties in theWhacky Warehouseand the Jolly Jungle and he couldn’t go becauseI couldn’t a ord apresent or his riend.’ Becky, Barnardo’s Compass

Partnership, Wrexham

All names have been changed to protect identities.

ContactNeera SharmaPrincipal Policy O fcer020 8488 [email protected]

Copies o the main report ‘ It doesn’t happen here – the reality of child poverty in the UK’ are available

rom Barnardo’s head o fce, tel: 020 8498 7750

For urther in ormation visit:www.barnardos.org.uk/poverty

B a r n a r d o

’ s R e g i s t e r e d

C h a r i t y N o s .

1 6 5 0 a n d

S C O 7 6 0 5 8 9 1 N H 0 7

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