Memorandum submitted by Sue Middleton
I. Severe, and Persistent and Severe Childhood
Eliminating severe and persistent
and severe child poverty should be incorporated in to official
Data need to be collected that allow
official measures of severe poverty, and of its persistence, to
be published so that the effects of policies can be properly monitored.
The Social Fund needs to be urgently
Attention needs to be given to ensuring
that families claim their full benefit entitlements.
The operation of benefit sanctions
in families with children needs urgent investigation.
The extent to which families take-up
their entitlement to Tax Credits and other benefits remains an
issue of concern and needs continued monitoring, as well as initiatives
to improve take-up.
Out of work benefits must be sufficient
to ensure that children in households who receive these benefits
do not experience severe poverty.
Ongoing monitoring is required to
ensure that policy initiatives to assist working parents are sufficient
to protect their children from (severe) poverty, particularly
in households where only one worker is available.
It needs to be accepted that work
will not be an option for some parents at some points in time,
and policy should protect children in these families from the
experience of severe poverty. (Section 1.3.2)
Change in children's lives, in terms
of living with adults who move from work to no-work or vice versa,
from receipt of out of work benefits to non-receipt and vice versa,
seem particularly associated with the experience of persistent
and severe poverty.
The best protection would be to reduce
the number of transitions from work to benefits through policies
to assist job retention, but a more dynamic tax and benefits system
is needed that takes account of the dynamics of the flexible labour
market, and does not catapult children in households who make
these transitions into persistent and severe poverty. (Section
Changes in the type of family in
which children live, particularly from living with a couple to
living with a lone parent, are also associated with an increased
risk of persistent and severe poverty. The take-up of benefits
needs to be promoted, particularly at the point in time when families
are making these transitions, but above all there is a need to
ensure that families in transition have adequate incomes. (Section
II. Social Exclusion and Poverty
All children should have access to
social activities and local services and these services must be
distributed (redistributed) equitably. Whilst school resources
are apparently distributed equitably, there is a policy debate
to be had about whether educational resources should be redistributed
to children in the poorest areas. (Section 1.4.1)
Policy is right to make improvements
in housing quality a priority for children. The poor quality of
the neighbourhoods in which severely poor children live also suggests
that the policy of targeting specific localities is correct. However,
many of these policies and programmes are time and cash-limited.
Consideration needs to be given to bringing housing and neighbourhood
regeneration initiatives into mainstream funding. (Section 1.4.2)
Further efforts may be needed to
assist the families of poor children in accessing financial services,
such as bank accounts.
Progress needs to be made in assisting
poor families to avoid going into debt, particularly to expensive
lenders. This, suggests again, the urgent need for a review of
the Social Fund.
Flexible savings plans are required
which families on low incomes can pay into in "good"
years and take payment holidays from in bad years without penalties.
Policy attention would be better
focused on assisting families to escape from and then avoid, debt
rather than having unrealistic expectations about the capacity
of families on low income to asset building implied by "Assessed
Based Welfare" proposals.
All children should be taught in
school about managing money and financial services. (Section 1.4.3)
III. Measurement of Poverty and Social Exclusion
Policy needs to be concerned about
the impact of poverty on children's current lives as children,
not just with of the effect it may have on children's later lives
Poverty measures which incorporate
material deprivation should be collected, not just in annual cross-sectional
surveys, but also over time.
New poverty indicators need to be
child-centred and developed in consultation with children themselves.
Social exclusion measures specifically
for children are also required, and these should also be developed
by and with children.
There is a need for a new survey
of children in families, rather than families with children, which
can follow children's circumstances over time and produce data
relatively quickly. This should collect as much data as possible
from children themselves.
A large scale national survey of
the circumstances of children from ethnic minority backgrounds
is urgently required, to ensure that the policies in place to
remedy childhood poverty in general are appropriate to the varied
needs and circumstances of these children.
Policy should not focus exclusively
on children whose circumstances can be easily measured. Resources
should be directed to assessing the size and nature of the problems
experienced by particularly vulnerable groups of children, such
as the children of asylum seekers and refugees, and those who
The multiple manifestations and dimensions
of childhood poverty and social exclusion and their inter-relationships
must be measured in the same survey. (Section 2.1)
IV. Adequacy Standards
Although a relative income measure
of poverty will, and should, remain important in measuring childhood
poverty, there are a number of difficulties in relying on relative
income measures of childhood poverty. They are arbitrary, provide
a "moving target", (arguably) under-estimate childhood
poverty, assume that poverty is equally distributed within households,
and cannot describe what poverty (and social exclusion) means
in children's lives (Section 2.2).
As a result, there is an urgent need
for agreement on levels of income that are adequate to keep children
(and adults) out of poverty. In other words, adequacy standards
or minimum income standards need to be established that can command
widespread agreement and support both by government, the academic
community, pressure groups, and the general public as a whole.
These standards could solve many of the problems with relative
income measures and would provide a clear and easily comprehensible
definition of poverty. (Section 2.3)
This memorandum is in response to the House
of Commons Work and Pensions Select Committee call for evidence
to assist it in its enquiry into Child Poverty. The author is
pleased to respond and will be happy to supply further information
The government is to be applauded for its commitment
to end child poverty "within a generation" and the contents
of this note should be seen in this context. Although progress
has undoubtedly been made, much remains to be done, not least
in capturing public opinion and support for the required policy
The memorandum is in two parts: the first summarises
findings from recent research undertaken by the author and colleagues
at the Centre for Research in Social Policy for Save the Children-UK,
to explore the circumstances of children in the most severe poverty
The second part focuses on the definition and measurement of childhood
poverty and, in particular, the rationale for "Adequacy"
or "Minimum Income" Standards.
1. FINDINGS AND
This research, funded by Save the ChildrenUK,
was completed in early 2003 and published on 2 September 2003.
It is based on secondary analysis of two nationally representative
datasets: the Poverty and Social Exclusion Survey of Britain (1999),
and the British Household Panel Survey (1991-99). Further details
of these datasets (and their limitations), and of the methodology
used in the analysis can be found in Annex 1 to this memorandum.
Although the data are somewhat out of date in
policy terms, their advantage is that they provide a baseline
against which policy success can be measured in later analyses.
But, more importantly, they provide clear indications of whether
policy thinking was and is on the right lines, and unique insights
into a range of poverty and social exclusion experiences among
children which are not, unfortunately, available from more recent
The rationale for the research was that, despite
the recent explosion of research on child poverty, little seemed
to be known about the poorest children in Britain. Earlier research
had suggested that some 300,000 of the poorest children in Britain
had actually become worse off as a result of government reforms
aimed at reducing childhood poverty.
So, our research aimed to answer the following questions about
Britain's Poorest Children:
Who are they and what are their family
Are they similar to poor children
as a whole or are they different and, if so, in what ways?
How long do they remain in severe
poverty? Is severe poverty a temporary phenomenon or more long
lasting in a child's life? And, if they do escape from severe
poverty do they escape poverty completely or simply remain in
a poverty which is less severe?
Do these children experience "social
exclusion" differently or to a greater extent than other
childrenpoor and not poor?
It was felt that the answers to these questions
would throw light on whether current anti-poverty policies are
appropriate for the poorest children or if different policy solutions
1.2 Aims of the Research
To take a child-focussed approach
as far as possible, making the child the unit of analysis so that
the investigation could consider children in families, rather
than families with children.
To move away from a purely income
based approach to defining and measuring poverty and severe poverty,
and begin to explore new definitions and measurements that could
incorporate material deprivation.
To develop our understanding of what
social exclusion means in children's lives. Too often it is assumed
that social exclusion means the same for children as for adults.
To explore if, and to what extent,
poverty and social exclusion coincide in children's lives. Are
children who are poor the same children as are socially excluded
or are they different groups? Very little is known in this area
because indicators of poverty and social exclusion are rarely
collected in the same surveys.
To explore these issues over time,
in particular in relation to severe poverty in childhood.
1.3 Findings and Policy Implications: Severe,
and Persistent and Severe Poverty
1.3.1 The extent of
severe and persistent poverty
In 1999 8% of children were severely poor
in that they were materially deprived, their parents were materially
deprived and their household income was below 40% of median.
Analysing data over time, over a five year period
of childhood in the 1990s, 9% of children experienced persistent
and severe poverty, that is, they were poor for at least three
out of five years and had at least one year in severe poverty
Table 1 Extent of Persistent and Severe
|Persistent and Sever||9
|Short-term and Severe||4
The proportions shown in Table 1 are likely to be under-estimates
of the proportions of children who experience poverty during their
childhood because we are measuring only a five year period so
that, for some of these children, poverty will have begun before
the five year period in which they were studied, and may or may
not continue beyond the five years.
Within the context of target-driven policies, such as the
reduction of child poverty by one-quarter by 2004, there is a
temptation to focus on those who are easiest to help, that is,
those children who are closest to the poverty line and, arguably,
easiest to raise above it. Yet if this leaves a group of children
behind who are experiencing the most severe poverty, humanitarian
concerns would suggest that different policy solutions are required.
If child poverty is to be eradicated, it would seem essential
to maintain a focus on dealing with children who are facing the
most difficult circumstances and to ensure that policy interventions
benefit this group. Logically, therefore, eliminating severe
poverty should be incorporated in official targets. Data need
to be collected that allow official measures of severe poverty
and of its persistence to be published so that the effects
of policies on this group of children can be monitored.
1.3.2. Severe Poverty and Receipt of Income Support (IS)
and Job Seeker's Allowance (JSA)
Almost nine in 10 children who were in severe poverty in
1999 (87%) were in households that were in receipt of IS or JSA
compared with only just over one quarter of those who were in
non-severe poverty (27%) and only 3% of children not in poverty.
Yet the average household income of children defined as severely
poor in this analysis was well below Income Support and
JSA levels. This may seem illogical at first sighthow can
children in households in receipt of benefits have incomes below
benefit levels? There are a number of possible explanations, each
of which has policy implications.
Deductions of benefit to repay, for example, social
fund loans. Other research undertaken in CRSP has also noted the
effect on household incomes of such deductions.
This finding (and later evidence in this note about debt, see
Section 1.4.3), suggests that there is a need for an urgent
Review of the Social Fund.
Non take-up and under-claiming. For those children
who were severely poor but not in benefit households, it may be
that their parents had not taken-up their entitlement or, if they
were on benefit, had not received their full entitlement for reasons
other than deductions at source.
Attention needs to be given to ensuring that
families claim their (full) benefit entitlements.
Sanctions. It may be that some of these children
were in households that had been subjected to reductions in benefit
because of non-compliance with regulations. The operation of
sanctions in families with children needs urgent investigation.
It cannot be right that children should suffer for the actions
of their parents.
Low wages. Another possible explanation for the
13% of children in severe poverty not on benefits is that their
households were receiving very low wagesand not receiving
Working Families Tax Credit. This may well have been assisted
by the reforms to, and greater generosity of, the tax credit system,
but take-up remains an issue and continued monitoring is required.
Adequacy of benefits. Although benefits for children
whose parents are not in work have been increased significantly
since 1999, it is unclear whether these increases, and the much
smaller increases for adults (parents) who are out of work, have
been sufficient to keep children out of the combination of material
deprivation and income poverty that this measure of severe poverty
represents. There is no conclusive evidence to suggest that benefit
dependency/work incentives are extensive serious problems on a
national scale (and see further below, Section 1.3.3). Out
of work benefits must be sufficient to ensure that children in
these household do not experience severe poverty.
1.3.3 Severe Poverty and Work
Central to the government's policy reduction policies is
the view that having parents in paid work is the best protection
against poverty for children. The evidence seems to suggest that,
in 1999, having working adults in the household did seem to protect
children from poverty (Figure 1). More than nine in 10 children
who were not in poverty had at least one full-time worker in the
household and children in households with no working adult accounted
for more than four-fifths of children in severe poverty. However,
work by no means always protected children from poverty. Almost
one in five children in severe poverty had at least one adult
in the household who was in some form of paid employment and more
than three-quarters of children who were in poverty that was not
Changes to the Tax Credit system and the impact of the minimum
wage may have improved the situation of children in households
with working adults since 1999, but this needs to be monitored
to ensure that work does protect children from poverty. Consideration
also needs to be given to the impact of policy on households where
there is only one worker possible, for example in lone parent
families, but particularly in families where work is not an option.
Further analysis revealed that, for example, many severely poor
children lived in households where at least one adult is sick
or disabled. For many of these parents work is unlikely to be
a realistic option, not least because of the additional problems
of combining work with caring for a family for parents who are
Ongoing monitoring is required to ensure that policy initiatives
to assist working parents are sufficient to protect children from
(severe) poverty, particularly in households where only one
worker is available.
There are a number of reasons why work may not be an option
for some parents at some point in time and policy should protect
their children from the experience of severe poverty.
1.3.3 Poverty, Work and Benefits
The analysis of changes in children's circumstances over
a five year period has begun to suggest the particular difficulties
that are caused in households where parents move between work
and benefits. First, Figure 2 shows the proportions of children
who were in persistent and severe poverty according to the working
status of their households during the five year period. Whilst
almost one in five children who experienced persistent and severe
poverty were in households that had no workers in any of the five
years (19%), far more were in households that had moved between
having someone and no-one in work (65%). Indeed, the largest proportion
of children in persistent and severe poverty were in households
which had experienced at least two changes in either direction,
between having at least one adult in work and having no-one in
work (29 per cent). It seems that, far from being "work-shy"
the parents of children who experienced persistent and severe
poverty had attempted to move into work but had failed to sustain
A similar picture emerged from an examination of how the
households of children in persistent and severe poverty moved
between being in receipt of Income Support or Jobseeker's Allowance
and not receiving these benefits (Figure 3). Whilst 29% of children
who experienced persistent and severe poverty were in households
that were receiving benefits in all five years, the majority were
in households that moved from not receiving benefits to receiving
them (18%), from non-receipt to receipt (23%) or experienced two
or more such changes (which could have occurred in either direction)
(16%). Again, it seems that, far from widespread welfare dependency,
parents were attempting to move from benefits but were failing
to sustain such moves.
Whilst these data are from the 1990s, some early evidence
from longitudinal analysis of the Families and Children Study
suggests that such movements may still be problematic.
It seems that the worst forms of childhood poverty may be
associated more with changes in children's lives, in terms of
the experience of benefits and work, than with stability. There
is a need to increase protection for children at times when their
household are making these transitions, both when households move
from benefits into work and when they move from work to
benefits. Tax creditsand particularly the Child Tax Creditwill
have made some impact on the transition from benefits to work
and, because of its portability, from work to benefits (although
the speed with which higher/maximum rates of Child Credit are
paid once families move onto benefits needs to be monitored).
But more may need to be done, particularly through policy initiatives
to protect children in families who are making these transitions.
Obviously the best protection would be to reduce the number of
transitions from work to benefits through policies to assist
job retention. This is a relatively recent focus of policy
concern, although some developments are in hand, for example,
the Employment Retention and Advancement Demonstration Project,
but more clearly needs to be done.
In an economy whose strength is said to lie in the flexibility
of its labour force, where workers have been told that they can
no longer expect a job for life but must be prepared to move from
job to job, people will inevitably continue to make these transitions
between work and, for most, short periods of no work. The impact
of such movements is inevitably greatest on those workers with
the lowest skills and who command the lowest wages. There is a
need for a more dynamic tax and benefits system that takes
account of the dynamics of the flexible labour market and does
not catapult children in households who make these transitions,
into persistent and severe poverty.
Our analysis of how children's circumstances changed over
time also examined the stability of children's family lives, in
terms of whether they lived with a lone parent or couple family
throughout the five year period, or whether they moved from one
family type to another. As might be anticipated, relatively large
proportions of children who had experienced persistent and severe
poverty had lived with a lone parent throughout the five years
(24%), although a larger proportion had lived in a couple household
throughout the five years (47%). But almost three in 10 children
in persistent and severe poverty had experienced a change between
living with a lone parent, living with a couple or living independently
Much policy concern has focused on poverty among children
in lone parent families. Two factors need to be recognised: first,
because of their relative proportions in the population, poverty
and, as has been suggested here, persistent and severe poverty
is most prevalent among children who live in couple families;
secondly, policy should recognise that lone parents re-partner
and couples become lone parents and that children seem to be at
particular at risk of severe poverty at these times of transition.
The take up of benefits needs to be promoted particularly
at the point in time when families are making these transitions
but above all, and yet again, there is a need to ensure that
these families in transition have adequate incomesparticularly
benefits to ensure that they can protect their children from
1.4 Social Exclusion in Childhood
Whilst the meaning of social exclusion in adulthood continues
to be hotly contested and debated, almost nothing has been written
or said about its meaning in relation to children. Yet the indicators
of disadvantage in childhood in Opportunity for All go far beyond
measures of income poverty and assume that these indicators are
measuring something that, whilst they may be associated with poverty,
are somehow different. There are two main problems here; first,
there is no commonly accepted definition of social exclusion in
childhood and, secondly, the association between poverty and these
other indicators is assumed, rather than measured, because data
about poverty and possible indicators of social exclusion are
rarely collected in the same survey. What is clear is that definitions
of social exclusion in childhood cannot be assumed to be the same
as for adults, and that some attempt needs to be made to define
and measure social exclusion in childhood.
Figure 4 shows how we attempted to operationalise possible
dimensions of social exclusion in childhood in our analysis and
the indicators that were used under each dimension. The focus
was on three potential aspects of exclusion as it might affect
children. First, there is the direct exclusion that children might
experience in terms of their own experiences. It is known that
parents go to great lengths in their attempts to protect their
children from these direct exclusion experiences (and, indeed,
from the effects of low income).
But there are a second set of potential exclusionary experiences
from which parents will be unable to protect their childrenthose
that affect the whole householdsuch as those listed in
Figure 4. Finally, parents may experience their own individual
level exclusion which may also impact on their children, if less
directly, through the stress that these experiences bring.
Two points need to be made here: the manifestations of social
exclusion identified in our analysis are by no means the last
word on the subject. Rather, they are a first attempt at exploring
the possible manifestations of social exclusion in childhood,
about which much more work is required. Secondly, if and how these
three dimensions interact with each other was beyond the scope
of this project. We were concerned to investigate if and how each
of the manifestations interact with childhood poverty. Further
research is needed to see whether the dimensions themselves are
associated with each otherthat is, to what extent do they
appear in the same households? However, it must be emphasised
that it is my view that compiling a single index of poverty and
social exclusion in childhood is the search for the "holy
grail". Each of these manifestations and dimensions will
be experienced differently and at different times and to different
extents by children in poverty. Each will be of greater or lesser
importance to individual children: is lacking social activities
more or less important than being bullied in school?; is lacking
adequate local services more or less important than living in
inadequate housing? To simply count the presence of these manifestations
and dimensions in a child's life would be overly simplistic and
could result in a distorted view of the circumstances of Britain's
The full report of the research contains details of analysis
of all these manifestations and the extent to which they overlap
with material poverty. This paper focuses on just a small number
from each dimension as examples; the point is that such measures
need to be included in official government surveys so that it
is possible to identify whether children who are removed from
poverty are also removed from experiencing these manifestations
1.4.1 Children's Experiences of Exclusion and Poverty
Figure 5 compares the experiences, in 1999, of severely poor,
non-severely poor and non-poor children in terms of their exclusion
from social activities, local services and school resources. Details
of these measures are included in the report. The chart shows
the average proportion of children in each poverty group who were
excluded on these dimensions. There is a clear association between
poverty and exclusion from social activities, such as having friends
round for tea or a snack once a fortnight, going swimming at least
once a month, because parents could not afford them. One quarter
of children in severe poverty were excluded from social activities
because their parents could not afford them, compared with only
7% of those in non-severe poverty and only 2% of those not in
poverty. The same patternif less extremewas seen
for exclusion from a range of publicly or privately provided local
services because they were either unavailable or could not be
afforded. It is encouraging that publicly provided services, such
as health and education, were available to almost all children
(although their adequacy has yet to be investigated) but, again,
it was leisure activities and services that had to be paid for
that were a problem. For example, severely poor children were
particularly likely to be excluded from youth clubs and sports
and play facilities, that is, places where children and young
people can meet and play or socialise safely.
More encouragingly, there was almost no difference in the
proportions of children who had experienced school resource problems
according to poverty status, although it is worrying that more
than one in eight children had experienced problems such as teacher
and book shortages and inadequate repair and maintenance.
Greater levels of exclusion among children who were poor
and, particularly, children who were severely poor were seen on
almost all dimensions of children's exclusion.
All children should have access to social activities and
local services and these services must be distributed or redistributed
equitably. Whilst the fact that school resources are apparently
distributed equitably is encouraging, there is a policy debate
to be had about whether educational resources should be redistributed
to children in the poorest areas. There is, of course, a counter
argument that this would only encourage wealthier parents to opt-out
in greater numbers from the state education system and this must
be considered. Nevertheless the debate about redistribution of
resources is one that needs to be had.
1.4.2 Household Exclusion and Childhood Poverty
In terms of experiencing housing problems, such as shortage
of space, damp, leaking roofs and so on, children in severe poverty
were only slightly more likely than those in non-severe poverty
to experience these problems, but both groups were much more likely
than children not in poverty to have housing problems (Figure
6). For problems in the local area such as graffiti, crime, traffic
and noise, the pattern was, again, clearly associated with poverty
and poverty severity. One-third of severely poor children experienced
neighbourhood problems, compared with one fifth of non severely
poor children, and only just over one in 10 children who were
Local area and housing problems were clearly associated with
childhood poverty. Housing quality is clearly vital for a child's
well-being and is the only environmental indicator specifically
for children and young people in Opportunity for All.
These findings suggest that policy is right to make improvements
in housing quality a priority for children. The poor quality of
the neighbourhoods in which severely poor children lived also
suggests that the policy of targeting specific localities is correct.
However, many of these policies and programmes are time and cash-limited
and whether improvements in housing and area quality will be sustained
once funding is removed is open to question. Consideration needs
to be given to bringing housing and neighbourhood regeneration
initiatives into mainstream funding.
1.4.3 Financial Exclusion and Childhood Poverty
Clear associations also emerged between childhood poverty
and financial exclusion.
Bank accounts, debts and borrowing
More than two fifths of children in severe poverty in 1999
(44%) were in households where no adult had a bank account compared
with only 1% of children not in poverty. Almost two-thirds of
children in severe poverty (65%) were in households that had been
seriously behind in the previous 12 months in paying bills for
utilities, housing, loans, and credit cards compared with only
7% of children not in poverty. Levels of debt were also high for
children in non-severe poverty at 45%. Finally, well-over half
of severely poor children (56%) lived in households that had borrowed
money from sources other than a bank or building society in the
previous 12 months, such as money lenders or family and friends.
This compares with just 4% of children not in poverty.
Types of debt
Investigation of the type of debt that parents had also showed
significant variations according to poverty status (Figure 7).
Whereas the parents of children not in poverty were more likely
to have personal loans from banks and building societies and particularly,
to have credit card debts, mail order debts were far more prevalent
among the parents of children in poverty, particularly those in
persistent poverty only. In terms of debts to the Social Fund,
13% of children in persistent poverty only had parents who had
debts to the social fund and only 4% of children whose poverty
was persistent and severe. This paper has suggested earlier that
one of the possible reasons why children in households on benefit
were receiving incomes below income support levels might be that
deductions were being made from the family's benefits at source
to repay debts to the social fund. Therefore, these low levels
of social fund debts among the most seriously poor children are
somewhat surprising and must raise questions about whether the
Social Fund is genuinely assisting the government in meeting its
poverty targets. It seems likely that many of the poorest families
prefer to "borrow" money through purchasing from mail
order catalogues, which means they continue to receive their full
benefit and can maintain least some control over whether they
make a repayment in a particular week.
Ability to save
The patterns of parents ability to save in each year of a
five year period were as might be expected; the parents of children
in the poorest groups were far more likely not to have been able
to save in any of the five years, and the parents of children
who had not experienced poverty had been able to save at some
point (Figure 8). However, even among children in persistent and
severe poverty two-fifths of their parents had been able to save
in at least one of the five years. Further analysis (results not
shown) also revealed that when the parents of persistently and
severely poor children did manage to save, they did so at quite
high levels, averaging more than £50 per month.
It is worth considering together the policy implications
of all these findings about financial exclusion and childhood
poverty. First, in 1999 there was clearly a need to assist
the families of poor children in accessing financial services,
such as bank accounts. There is some evidence that government
interventions in this area have had some success,
but further monitoring is required.
Progress needs to be made in assisting poor families to avoid
going into debt, particularly to expensive lenders. Whilst research
evidence suggests that families on low incomes manage their money
very well and seek to avoid debt,
lengthy periods on low income currently make debt unavoidable
for many. This finding, and those relating to the type of debt
that parents had, again shows the urgent need for a review
of the Social Fund.
There is also a need for flexible savings plans. The
current proposal for the Savings Gateway would require people
to commit savings for five years in order to receive the government's
contribution. Our evidence suggests that five years is far too
long. The fact that parents do save when they can suggests the
need for savings plans which families can pay into in "good"
years and take payment holidays from in bad years without penalties.
It is unrealistic to expect low-income families, prone to spells
of (severe) poverty, to save for five years rather than spending
money on the immediate needs of their children.
Some comment is also necessary here about proposals for Asset
Based Welfare. However desirable it might be for families to build
up financial assets in "good" times so that they can
protect themselves from future financial hardship, it is clearly
unrealistic to expect poor families who are experiencing severe
financial hardship and who are often in debt to continue to build
up such assets. Policy attention would be better focused on
assisting families to escape from, and then avoid, debt, rather
than having unrealistic expectations about "asset building".
The experience of the very low levels of take-up of stakeholder
pensions provides further supportive evidence for this recommendation.
Finally, given the relative lack of access to financial services
such as bank accounts in the homes of severely poor children and
other findings in the report about financial exclusion among the
most severely poor, it would seem sensible to ensure that all
children are taught in school about managing money and financial
2. Measuring Childhood Poverty and Social Exclusion
This final section draws out some of the implications of
research for how childhood poverty and social exclusion might
better be measured and defined.
2.1 Recommendations for Data Collection
There is a need for poverty measures which incorporate
material deprivation to be collected, not just in annual cross-sectional
surveys, as the government is currently considering, but also
over time so that changes in children's circumstances can be properly
understood. Whilst the Families and Children's Study has made
a start in this area, too many of its indicators are of adult
or household level deprivation, rather than direct indicators
of child deprivation. This must also be borne in mind in considering
indicators of childhood deprivation to be included in the Family
Resources Survey. New poverty indicators need to be child-centred
and developed in consultation with children themselves.
Both of the surveys analysed for this report have also shown
the immense potential in developing social exclusion measures
specifically for children and these, too, need to be developed
by and with children themselves.
Our analysis of the impact of poverty on children's lives
has also emphasised that we should be concerned about poverty
in childhood, not just because of the effect it may have on children's
later lives as adults, but because of its impact on children's
current lives as children. This is why there is a need for
a new survey of children in families, rather than families
with children, which can follow children's circumstances over
time and produce data relatively quickly (the Millennium Birth
Cohort Study will be invaluable but, by definition, it will be
2016 before it is possible to gain even an initial picture of
childhood). A split-age study would be the methodology proposed.
This would take representative samples of children aged less than
one year, five years old, 10 years old and 15 years old and follow
each child annually, for five years in the first instance, incorporating
a range of measures of children's lifestyles and living standards.
A complete picture of childhood would then be available after
five years. The survey should collect as much data as possible
from children themselves as soon as they are old enough, but would
obviously need to collect information about the household's financial
circumstances, amongst other things, from parents. This is not
to say that children's experiences can or should be divorced from
those of their families, rather that, if the aim is to understand
how childhood poverty and social exclusion might best be remedied,
this is best understood from children's perspectives.
There is a group of children about whom our research and,
indeed, research in general has been able to provide little evidence
to date. Children from ethnic minority backgrounds usually appear
in relatively small numbers in nationally representative surveys
so that no analysis can be undertaken of the circumstances of
children from different ethnic minority backgrounds. In our analysis,
for example, we were only able to distinguish white from non-white
children, which completely ignores the diversity of cultures and
experiences among ethnic minority children. There is evidence,
for example, that Pakistani/Bangladeshi children are amongst the
poorest in Britain in terms of family income142. A large scale
national survey of the circumstances of children from ethnic minority
backgrounds is urgently required to ensure that the policies
in place to remedy childhood poverty in general are appropriate
to the particular needs and circumstances of these children.
There are also a number of significant gaps in the evidence
that is available about children and their experiences of poverty.
First, as with all surveys, the data analysed in this report exclude
those who are likely to be the very poorest and most deprived
children; children of asylum seekers and refugees, those who are
homeless or living in temporary accommodation, traveller's children.
Policy should not focus only on those whose circumstances can
be easily measured and resources should be directed to assessing
the size and nature of the problems experienced by these particularly
vulnerable groups of children.
The research evidence summarised in this note has suggested
that childhood poverty has multiple manifestations and that children
experience social exclusion in a number of dimensions. We need
to understand more about these manifestations and dimensions and,
particularly about their inter-relationships, which means that
they must be measured in the same survey. Currently, the
indicators in Opportunity for All are not measured in this way
and, therefore, lack this understanding.
A relative income measure of poverty will, and should, remain
important in measuring childhood poverty, not least because it
is the only current measure that allows a comparison of children's
circumstances over time and internationally. For example, the
government's commitments to the European Union require that a
measure of relative income poverty be included in the National
Action Plan for Social Inclusion. Nevertheless, it is worth rehearsing
briefly some of the difficulties of relying on relative income
measures in measuring childhood poverty, since doing so provides
indications of the direction in which childhood poverty measurement
needs to go.
Relative income measures:
Are arbitrary. There is no rational, scientific justification
underpinning the selection of 60% contemporary median equivalised
household income" as a poverty line. There is no understanding
of what standard of living this level of income does or should
Are a moving target. As median income increases, so
does the level of income represented by"60% of the contemporary
median. This can lead to some strange results in terms of the
proportions of children (and adults) identified as being in poverty.
For example, in Ireland in the 1990s, during a time of rapid economic
growth, levels of poverty increased as increases in the incomes
of those towards the bottom of the income distribution were smaller
than those towards the top of the distribution. This is one reason
why the proportion of children in poverty in the UK has not fallen
as quickly as might have been anticipated. Eventually, this may
lead to a failure of public confidence in the measure, which would
compound the already difficult task of convincing some sections
of the population that childhood poverty in the UK is a serious
and urgent problem.
Under-estimate childhood poverty? This argument is
technical, relating to the equivalence scales that are used to
make sure that the incomes of households with different numbers
and ages of children can be compared. At its simplest, a family
of two adults and four children with an income of £200 per
week will be worse off than a family of two adults and two children
with an income of £200 per week because income has to meet
the needs of more people in the first than in the second family.
Equivalence scales provide values for the proportions of income
assumed to be consumed by adults and children of differing ages.
Yet if these values are wrong, for example, if they under-estimate
the proportion of family income required to meet the needs of
children (as I would contend is the case with all commonly used
equivalence scales), then the proportions of children measured
as being in poverty will be under-estimates.
Assume that poverty is equally distributed within households.
Relative income measures assume that if the household is poor
then each member of that household will also be poor. Yet research
evidence clearly shows that the parents of children in poor households
go to great lengths to protect their children from the effects
of poverty. Women
within households are disproportionately deprived, or deprive
themselves of, resources in the interests of the remainder of
the family. It is clearly important for policy to understand how
resources are allocated within households.
Cannot describe what poverty (and social exclusion) means
in children's lives. What is it that income poor children
go without that non-poor children do not go without? The evidence
presented above clearly shows the added understanding of material
disadvantage and social exclusion that can be gained from moving
beyond relative income measures of poverty.
2.3 THE NEED
Whilst the relative income measure of poverty will remain
important, its limitations described above lead to the conclusion
that there is an urgent need for agreement on levels of income
that are adequate to keep children (and adults) out of poverty.
In other words, adequacy standards or minimum income standards
need to be established that can command widespread agreement and
support both by government, the academic community, pressure groups,
and the general public as a whole. These standards could solve
many of the problems with relative income measures outlined above
and would provide a clear and easily comprehensible definition
Despite previous recommendations from a range of experts
and academics, the government has, to date, resisted this proposal
on the grounds that different methods of setting adequacy standards
produce different results, and that it would be impossible to
produce standards that could be adjusted to take account of changing
needs over time. There are a number of points that can be made
1. As described above, the extent of childhood poverty
captured using current relative income measures already varies
according to the equivalence scale used and has the added disadvantage
of a poverty line subject to the vagaries of fluctuating incomes
at the national level.
2. The most commonly used equivalence scale in the UK,
the McClements scale, has not been amended in many years to take
account of changes that may have occurred in the relative needs
of adults and children within households. In other words, poverty
measurement is currently based on an out of date measure.
3. Although different methods of setting adequacy standards
do produce different results, this is usually because of differences
in the items taken into account, rather than differences in the
amounts allowed for particular budget areas. In any event, this
is not a reason to reject their potential, which is already accepted
in many European countries. Rather, the results produced using
the different methods can be evaluated and triangulated.
4. Adequacy standards that have been set in consultation
with, and using the expertise of, ordinary people are more likely
to command the support of the general public for policies to abolish
poverty than are measures such of "60% of median". The
general public has no idea of the actual monetary amount represented
by this figure, whereas adequacy or minimum income standards that
provide clear monetary amounts of weekly income, underpinned by
the list of goods and services that could be bought with these
amounts, would be much better understood.
5. Adequacy standards can be uprated with prices annually
and can be revisited every five years or so to update them to
take account of changing needs and priorities. The original standard
could be retained and used in a similar fashion to the absolute
measure of income poverty currently reported in government statistics.
The revised adequacy standard would at least ensure that poverty
was being judged by the standards of the time, irrespective of
fluctuations in income caused by changes in the economy or out
of date assumptions about the relative needs of adults and children
within family budgets as is currently the case.
6. Properly developed adequacy standards can take into
account not simply the needs of children and adults for goods
and services that have to be paid for from the family's income,
but also the minimum level of adequate, publicly provided services
to which people should have access. They can also incorporate
other dimensions of exclusion, such as adequate housing and neighbourhood.
They can, therefore, increase accountability of service providers
at both national and local levels.
7. It may be that the Government is concerned that adequacy
or minimum income standards would show that levels of in-work
and/or out-of-work benefits are insufficient to lift particular
groups of children or households above these new poverty lines.
Yet there is already concern that existing poverty reduction targets
will not be met using measures over which the government does
not complete control and which may not respond directly to increases
in financial support. It would be in the Government's own interests
to have other measures of poverty, in addition to the relative
income measure, against which their progress can be measured.
Further, the Government has already made the crucial and brave
step of committing itself to abolishing child poverty within a
generation. It is surely in their interests, as well as the interests
of the nation as a whole, that everyone is clear about what we
are trying to abolish and the standards to which we are aspiring
for our children. Such a clear understanding could only assist
the Government in its ambitions by harnessing public support.
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