The best investment

If a future government wants to tackle poverty, its first priority should be child poverty.

Growing up in poverty steals away children’s life chances – poorer children are likely to do less well in education, have poorer health and are more likely to have lower self-worth. Any government looking to improve the life chances and quality of life for society as a whole can do no better than starting with investing in children.

A future government also needs to be clear about whether it hopes to simply tackle child poverty or whether to aim to prevent it entirely. This may seem over-ambitious at a time when child poverty has reached crisis levels and the future is looking even bleaker.

The UK had the largest reductions in child poverty in the whole of the OECD between 1998 and 2010. Over that period, child poverty fell by 1.1 million and a further 900,000 children were prevented from falling into poverty. Now, all these achievements have been eroded and by 2021/22, £40bn will be cut from social security spending every year, with children the biggest losers.

This recent history of tackling child poverty is important because it shows what can be achieved when there is political will and disproves the idea that poverty is inevitable. On the contrary, in the UK child poverty is policy responsive.

Yet, as things stand, the benefit freeze is biting hard and the benefit cap breaks a long-held principle that support should be provided according to assessed need. Children have been singled out for the punitive two-child limit in tax credits and universal credit, denying support for third and subsequent children purely on the basis of birth order. If a government wanted to introduce measures to increase child poverty, it couldn’t do better than this.

So what should a child poverty strategy for the future look like?

We need an integrated and comprehensive strategy, with targets and measures – because we value what we measure and can then track progress. It will take strong cross-government leadership to harness the potential of all public services to be poverty preventing. Policymakers need to start from first principles again and adopt universal policies aimed at promoting the wellbeing of all children to prevent poverty and boost social cohesion as well as targeted policies aimed at supporting the most disadvantaged.

To reinvest in children, an easy first step would be to scrap the benefit cap and two-child limit and restore the value of child benefit. Child benefit’s strength is its simplicity and near universal take-up. This makes it a straightforward way to get money directly to the parent with care. Parents currently using foodbanks because of delayed or inaccurate benefit payments, particularly universal credit, are frequently relying solely on child benefit to get by.

Any new strategy needs also to respond to the changing nature of poverty. Nowadays child poverty is no longer mainly about worklessness. In a class of 30 children, on average nine will be growing up in poverty and, of these, six will have at least one working parent. This in-work poverty means many families are now ‘working for their poverty’ – because of insecure work, low pay, low hours, and limited prospects to advance in work, many parents are moving into work but remaining in poverty.

For more families to escape poverty we know that around 1.5 full-time salaries are needed so, where they are able, it makes sense to support lone parents and both parents in couple families to get into paid work and get on in work.

One of the few surviving successes of our last child poverty strategy is the sustained increase in the proportion of lone parents in work – now sitting at 67 per cent. Second earners, mainly mothers, benefit from greater labour market participation as it can prove protective and poverty-preventing if, in future, they find themselves becoming a lone parent.

We also need to look again at education – reinvesting in Sure Start and going further with all schools becoming ‘extended schools’ providing a wide range of services that enrich children’s lives and enable parents to work longer hours.

A good child poverty strategy will tackle the thorny issue of childcare – its quality, how it is paid for, and how childcare costs are refunded for low-income working parents without the delay and unnecessary complexity that sometimes makes using childcare a highly risky business.

With eligibility for free school meals reducing as child poverty increases, we need to rethink school food and make it a universal part of public service so all children in school or early years education receive a meal without the need for complex means-testing that creates stigma and the sort of cliff edges that make families in low-paid work worse off.

And yes, we need to design a social security system that works for families. It should:

• Prevent and reduce poverty.
• Provide support for those with additional costs eg disability, childcare and caring responsibility for adults.
• Provide crisis support and protect the vulnerable.
• Provide redistribution between individuals and households as well as redistribution across a lifecycle.
• Provide social insurance and promote social solidarity.
• Support work and a healthy, stable economy.

There are lots of social problems that are very challenging and seemingly unsolvable. The good news is that child poverty is not one of them. We do know how to tackle it because we have done it before and we can choose to do it again. It’s the best long-term investment the UK can make in its future prosperity.

This blog is part of our Poverty and social security: where next? series. Read more about the project here.