Poverty: official figures do not reflect reality

13th May 2011

Official poverty figures don't reflect what is happening now or show the potential impact of cuts, growth or welfare reform in the future, says Chris Goulden.

The official poverty figures out yesterday, independently analysed by the IFS today, don't reflect what is happening now. Nor do they show the potential impact of cuts, growth or welfare reform in the future. The 2% fall in child poverty we've seen reflects tax credits changes even further back in 2007 and 2008. But this does show that decisions taken by governments can definitely make a difference. National benefit policy is not the only answer to poverty by a long stretch, but it has to be part of the picture.

It has become a bit of a repetitive argument to characterise the previous UK government's approach to tackling poverty as solely one of income transfers via tax credits, to move people from just below to just above an arbitrary line. Research by JRF showing the extreme annual cost of relying on only Child Tax Credit and Child Benefit to eradicate poverty has been used in support of critiques of this approach. It was never the intention, however, to advocate this route as an option. In fact it was used to show how vital it will be to act in areas beyond benefits: good quality, flexible, well-paid and part-time jobs (in the right parts of the UK); narrowing education gaps; improving vocational and parenting skills; more affordable quality childcare; better access to credit and advice on debts and careers. Poverty is affected by all these things and more.

The poverty compendium released by DWP now contains even more measures of progress, reflecting the addition of a severe poverty indicator in the Child Poverty Strategy and material deprivation for pensioners. JRF has long advocated a wide approach to poverty measurement – no single indicator can tell the whole story. What remains lacking in both the child poverty and social mobility strategies is a marriage of the measures to the actions. Until we can see by how much schools funding, Universal Credit, benefit cuts, the Work Programme and so on improve poverty and mobility, we can hardly call them strategies at all.