Child Poverty Measurement Peter Matejic, Child Poverty Unit

RESTRICTED 2 There is cross party backing for tacking child poverty The Government remains committed to the Child Poverty Act and is focused on action that will improve the lives of poor children – a lot is being done: Introduction of Universal Credit will improve the lives of some of the poorest families in our communities, making three million households better off and lifting up to 250,000 children out of poverty. Investment of £2.5 billion in the Pupil Premium to raise education attainment of poor children, as well as 260,000 disadvantaged two year olds receiving 15 hours a week of free early years education. The Government is committed to tackling child poverty

3 The 2010 Child Poverty Act Targets Four UK-wide targets to be met by 2020: 1.Relative low income (household incomes less than 60 per cent of current median income) – target is less than ten per cent 2.Combined low income and material deprivation (children who experience material deprivation with household incomes less than 70 per cent of current median income) – target is less than five per cent 3.Absolute low income (household income less than 60 per cent of 2010/11 median income adjusted for prices) – target is less than five per cent 4.Persistent poverty (household income less than 60 per cent of current median income for at least three out of the previous four years) – target to be set by 2015

In 2010/11 because the average income fell in a recession, the relative income poverty line moved down, and relative poverty fell without the incomes of those in low income necessarily changing. The absolute poverty line depends on how you chose to measure inflation and when you start your time series. The measures overlook other resources (for example assets) available to a household. They do not distinguish between those families who move in and out poverty but are able to get themselves out of poverty and those who face barriers that trap them. They do not identify intergenerational poverty, and so does not incentivise action to stop poor children becoming poor adults. This is why Government consulted on better measures to provide a more accurate picture of the reality of child poverty and drive policies which transform lives rather than chasing moving lines. If we are to successfully end child poverty we must be able to measure it, understand what drives it and tackle its root causes 4 The current measures have short comings

RESTRICTED 5 But we recognise that to properly tackle child poverty, we need to be measuring the right things The Consultation ran from November 2012 to February 2013 Asked for responses on new measures of child poverty that would: be widely accepted by the public and experts as being a fair representation of those children that are growing up in poverty be methodologically robust and draw on the best data that is available. We ran 17 consultation events involving 409 people, including 89 children and young people We received 257 consultation responses from a range of organisations and individuals, including: Academics, including from the RSS themselves Children’s and parents’ organisations Think Tanks Local Authorities Frontline organisations and staff

RESTRICTED 6 At this stage we have identified some common themes : There are no perfect measures. Different measures are better for different purposes. Support for the measures of poverty in the Child Poverty Act Support for developing our understanding of poverty beyond those measures Need to be clear about what are the causes and consequences of poverty Value in looking at poverty now and life chances We should be driving real action to tackle child poverty  Need to differentiate between who is in poverty for a short time and who is stuck there Income should continue to be a key feature of any measures of child poverty We are working across government on the next steps - it is a complex issue and we’re not going to rush to a decision

RESTRICTED 7 To tackle poverty we must tackle its causes – key to this is understanding who is in poverty for a short time and who is stuck there Based on an extensive internal review of the evidence, as well as engaging with academics in the field, we have identified the drivers of entrenched poverty (i.e. in low income now and likely to stay in low income for longer) affecting children now: Within labour market context

RESTRICTED 8 And we must break the intergenerational cycle of poverty where poor children go on to be poor parents This extensive review of the evidence also identified the drivers of inter- generational poverty that impacts on a poor child’s future life chances: This diagram shows risks not destiny – not all children with these risk factors will go on to get low child educational outcomes or future low income. For example, at the most deprived schools in London greatly out-perform non-London schools in terms of achievements of pupils in receipt of Free School Meals.

RESTRICTED 9 Importance of identifying the drivers of child poverty It is not only the development of new measures of child poverty that rely on a clear understanding of its drivers. These drivers will also be crucial for developing the new Child Poverty Strategy, which is due to be published in spring 2014 to cover 2014 to They will in particular play a key role in the consultation for the strategy, which we plan to launch later in the year.

Next Steps 10 1.We will put in place a Strategy that tackles the root causes of child poverty. We will be consulting on this later in the year. 2.We need measures that drive the right action to tackle poverty, targeting those most in need of support.  We are grateful to the RSS and others in the statistical community for their advice so far, and will continue to work with experts in the area. 3.We will be working with experts on any new measures and the new Strategy. We also want to work with children and young people, and frontline workers on how child poverty should be tackled. We want to make sure that we have the best evidence and the best ideas. 4.We will be taking account of the Social Mobility and Child Poverty Commission’s advice – their first report is due in autumn.