New projections based on current policies and the potential impact of the recession suggest that the numbers of children in poverty will fall from the latest figure of 2.9 million to 2.3 million by 2010. But this will still be 600,000 short of the government target of halving child poverty by then.
Published by the Joseph Rowntree Foundation (JRF) today (18 February) and written by Donald Hirsch, Ending child poverty in a changing economy is based on new JRF-commissioned modelling work from the Institute for Fiscal Studies (IFS), also released today. The report estimates the cost of meeting the 2010 target to be £4.2 billion a year.
Two effects of the recession are expected to cancel each other out. Some children will enter poverty as their parents lose their jobs. Others, with parents in low-paid jobs, could move out of relative poverty, as Child Benefit and tax credits rise faster than average earnings.
In a recession, planned welfare-to-work measures are unlikely to bring about the previously projected large increase in the number of lone parents with jobs. Children whose parents lose their jobs due to the recession are likely to experience severe poverty making it more costly to lift each child above the poverty line.
Although the government has allocated an extra £2 billion a year to tackle child poverty in the past two Budgets, the further spending required to meet the target remains at just above £4 billion, as estimated in JRF’s original 2006 report, What will it take to end child poverty? This is because of an unexpected rise in child poverty since 2004, combined with the increased costs of the recession.
The 2010 projections suggest that, under existing policies, about 1.1 million fewer children will be in poverty than in 1998 when the target was set. Despite this progress, it will achieve only two-thirds of the targeted 2010 reduction. This will make it more difficult to meet the more ambitious goal of eradicating child poverty by 2020. Without any new policies to help low-income families, child poverty could rise again to 3.1 million by 2020.
Previous JRF research suggested that over the long-term, child poverty is costing at least £25 billion a year in extra spending, lost taxes and lost GDP. If during a recession the government were to cut back on investment to tackle child poverty, evidence shows that this would continue to affect these children’s prospects throughout their lives, with costly consequences for society.
Julia Unwin, Chief Executive of the Joseph Rowntree Foundation, said, “Tackling child poverty will become tougher in the current recession but it is vital that this priority is maintained. Further progress will require additional spending on benefits and tax credits, but also much greater emphasis on developing parents’ skills and qualifications, as well as improving both childcare and the quality of jobs. As our research last year indicated, many families who found jobs in the past decade did not escape poverty.”
Commenting on the report, Donald Hirsch said: “The challenge in a recession will be to build on the progress already made in reducing child poverty. But it is unrealistic to assume that planned welfare-to-work measures will bring large increases in the number of parents with jobs, as in previous projections. During the recession, those families who remain out of work will need extra money if they are to avoid severe poverty, which can do irreparable harm to children who grow up in such circumstances.”
Issued by Nasreen Memon, JRF Head of Media: 01904 615 919 / 020 7278 9665 / 07812 241 220, nasreen.memon@jrf.org.uk
