Memorandum submitted by NCH (CP 13)
INTRODUCTION
NCH, the children's charity, is the largest
United Kingdom voluntary sector provider of services to children,
young people and families. NCH runs over 550 projects throughout
the United Kingdom working with over 100,000 people every year—many
of them living in or near poverty. We are one of the main providers
of the Sure Start initiative and also run many Family Centres
in disadvantaged areas. We are well aware from our practice of
the detrimental impact that poverty has on children—adversely
affecting their physical, psychological and emotional development.
The government's announcement to abolish child
poverty in a generation has generated widespread debate on how
this can be achieved among children's charities and elsewhere.
We welcome the decision by the House of Commons Work and Pensions
Select Committee to set up an inquiry into child poverty in the
United Kingdom and the effectiveness of the Government's policies
to eradicate it.
THE GOVERNMENT'S
ANTI-POVERTY
STRATEGY
NCH welcomes and applauds the Government's ambitious
aim to eradicate child poverty in the UK by 2020, and the targets
to reduce it by a quarter by 2004 and halve it by 2020. The increase
in income inequality since 1976 saw the UK move from one of the
more equal developed societies to one of the most unequal in the
1990s. By 1997, poverty in some areas of the country was at levels
not seen since the 1930s. Statistics show that by the mid-1990s
one in five families had no adult in work, with figures for 1997
revealing that 4.4 million children were living in poverty—a
scandalous statistic for the fourth-largest economy in the world.
We believe that the start made by the Government
to eradicate child poverty has been promising. Since 1997, child
poverty levels have reduced by 500,000, but a lot more will have
to be done if the Government is to meet their goal. Other factors,
such as a change in economic performance or a halt to employment
growth could make the Government's task much harder. Devolution
has also added to the complexity of achieving this goal. The devolved
institutions have the freedom to implement their own anti-poverty
policies and are not bound to follow Westminster. However, tax
and benefit powers, a powerful tool in any poverty reduction packages
do remain a reserved power.
The Government clearly identifies work and skills
as keys to breaking the poverty cycle and increasing aspirations.
The Chancellor has revolutionised the tax and benefit system—doing
away with its outdated rigidity and complementing reforms with
the New Deal and the National Minimum Wage. He has also instituted
the Savings Gateway to increase the incentives for those on low-incomes
to save, while the forthcoming Child Trust Fund will give all
young people, regardless of background, a financial springboard
when entering adulthood.
In the long term, raising aspirations and giving
all children and young people the opportunity to achieve is just
as crucial and should hold equal policy importance and this has
been given a much needed boost with the extra investment in education
and health services. This is a policy area that could determine
whether the Government succeeds or fails in eradicating child
poverty by 2020.
FINANCIAL SUPPORT
We welcome the record increases in Child Benefit
with the rate for the first child being 25% higher in real terms
than in 1997, while its universal nature has been maintained.
The tax credits system has increased the incentive to work by
reducing the poverty trap—giving a substantial boost to
the incomes of the poorest working families. The Working Tax Credit
supports those in work, but on low incomes, while the Child Tax
Credit helps parents raise their children whether they are in
work or not.
We support the decision to double Child Tax
Credit for the first year of a child's life—as many low
income families feel a particular financial strain during this
time and also to give a higher Child Tax Credit rate to parents
with disabled children.
We support the broad appeal of the Child Tax
Credits which is available to nine out of ten families with children.
Having all families in the same system means that poorer families
do not suffer any stigma when they claim this tax credit. In addition,
the decision to transfer payment to the main carer, rather than
the main earner, is welcomed. The introduction of the Child Tax
Credit and increases to Child Benefit now gives families earning
less than £13,000 with one child £2,825, with two children
£4,830 and three children £6,835.[147]
On a whole, financial support for families has significantly increased
for those on lower incomes. On average, families with children
are £1,200 a year better off, whilst the poorest 20% of the
population are, on average £2,500 a year better off in real
terms.
Tax credits, albeit with a few introductory
problems, have significantly contributed to helping families on
low incomes, but a high take-up rate is required if this policy
is to succeed. A low take-up rate could make it harder for the
Government to reduce child poverty, especially if employment growth
slows or ceases. The introduction of tax credits has put a greater
responsibility on claimants. They have to record the hours worked,
earnings and any changes to childcare costs in order to ensure
that they are not receiving an underpayment. We see this as a
responsibility of the employer as well as the employee.
The Government has introduced many changes to
those on low incomes with regards to tax and benefits. We are
concerned that more changes in the near future will lead to confusion.
The Government should concentrate on maximising the take-up of
tax credits and not look to alter the system further.
The Government has also increased the incomes
of the very poorest families. Income Support and Job Seekers Allowance
awards for children under 11 have doubled and the disabled child
premium has increased by 70% in real terms.[148]
However, in some cases parents are unable to work due to an illness
or disability. Whilst there has been an increase in the level
of benefits to such families, their children need more support.
For example, when working with young carers we regularly hear
about how they often miss school due to the responsibilities of
looking after their disabled parent(s). Without support there
is a high probability that many young carers will fail to fulfil
their academic potential and in some cases drop out of school
altogether. This increases the risk of young carers entering adulthood
in poverty and living on low incomes—an issue that the Government
must address.
We are particularly concerned about the number
of workless households in the UK and the Government needs to make
it a priority to address their needs. Making childcare more accessible
or increasing the incentive to study or undertake training will
increase their chances of moving out of poverty, and the value
of out-of-work benefits will also need to rise.
Furthermore, due to the intermittent employment
nature of those on low incomes we see it as a priority to make
support available to them to reduce their chances of falling into
poverty. This may include looking at whether money from the Savings
Gateway could be accessed or the savings limit for households
when applying for tax credits could be increased giving a greater
incentive to save when in work. Above all, we believe the Social
Fund urgently requires reform to better assist those living in
hardship.
We support the introduction of the Child Trust
Fund and await details of its implementation with interest. It
is vital that the most vulnerable children, such as those in care,
are not disadvantaged in any way. Given the decision by the Chancellor
that children born from September 2002 are to be entitled to benefit
from the Child Trust Fund we believe that children's charities
have an important role to play in ensuring a high take-up rate.
In relation to the impact of the Child Trust Fund it is worth
noting that the benefits will not come to fruition until around
the Government's target date to eradicate child poverty.
If the Government is to meet its poverty reduction
targets it will need to significantly increase spending on benefits
for poorer families. We see a strong case for more financial support
during the early years of a child's life. This could be done by
extending the higher rate Child Tax Credit beyond the first year
or through a top-up rate on Child Benefit until the child is three.
This would give parents a choice of whether to use the extra money
to pay for childcare or to stay at home by reducing their hours
of work.
WORK
The Government sees getting parents into work
as the main solution to child poverty. There is no doubt that
tax credits give parents a greater financial incentive to enter
into employment. Nonetheless we believe that the Government should
ensure that parents are not substantially disadvantaged if they
wish to spend time with their child or children during their early
years. This was also outlined in the Labour Party's 2001 manifesto
which stated "Many parents, especially mothers, want to
work reduced hours when they do go back to work."[149]
However, there is growing evidence that parents,
especially lone parents, would like to work less in order to spend
more time with their children, but are not able to do so. Recent
research by Professor Dex for the Joseph Rowntree Foundation found
that "the preferences expressed by many mothers run counter
to the direction of government "welfare to work" policies
since they would prefer to do less, not more, work while their
children are young."[150]
This is an issue that the Government must address. At present
any reduction in working hours will affect them financially.
We welcome the introduction of workplace legislation
to enable flexible working, but we question how applicable such
legislation is to the kind of employment undertaken by low income
workers.
In addition, we suggest that public sector employers,
such as local authorities, should lead by example and promote
flexible working arrangements for all employees. In some disadvantaged
areas, local authorities are often the main employers, so this
could make a major difference.
Furthermore, for those parents who are in employment
but on low incomes we are of the view that gaining new skills
and knowledge whilst in employment is vital. There is no longer
such a thing as "job for life" and workers need to acquire
transferable skills and engage in life-long learning in order
to reduce the chances of them returning into or near poverty.
The Government should examine the incentives and ability for employees
on low income to access and take-up courses.
There have been calls for the tax credit scheme
to be more flexible to reflect the intermittent employment nature
of those in low paid jobs. However, we believe that this may actually
add to confusion and that this should not be a priority for the
Government at this current time.
SURE START
As one of the main providers of Sure Start schemes
we are well aware of the challenges families living in poverty
have to face. From our experience Sure Start is an effective driver
to break the poverty cycle. It gives parents in disadvantaged
areas access to the help and advice they need from pregnancy to
birth and beyond. At present, Sure Start covers 40,000 children
under the age of four, about a third of the age group living in
poverty. We are pleased that the government has committed funding
to this initiative until 2013 as we see Sure Start, along with
Children's Centres, as services that are key to reducing the child
poverty.
Sure Start has had a significant impact in addressing
the issues and concerns of parents from disadvantaged areas and
their children. However, it is also highlighting problems in other
areas of service provision. For example, NCH Sure Start managers
have identified adult mental health problems as a major issue,
but find it difficult to access mental health services on behalf
of their service users. In addition, other issues such as housing
problems and benefits claims are also being dealt with by Sure
Start workers because these are needs that parents bring for which
other forms of support seem often to be lacking.
There are many parents living in or near poverty
who are excluded from Sure Start support because of its targeted
area approach. Pockets of deprivation surrounded by more affluent
areas have undoubtedly often missed out. 700,000 children (23%
of rural children) live in poverty in the countryside—representing
18% of all poor children, but there are only 15 Sure Start programmes
covering rural areas.
CHILDCARE
Accessible, high quality, affordable childcare
provision will need to be significantly increased if work is to
be a viable option for families living in poverty. We endorse
the Government's National Childcare Strategy, launched in 1998
and the commitment to increase the number of childcare places.
Research shows that there is considerable demand for good quality,
convenient, reliable and affordable childcare with research pointing
to 63% of non-working mothers and 78% of non-working lone mothers
stating they would work or study if they had access to it.[151]
Whilst the Government has made progress in expanding
childcare places the cost of childcare is still too expensive
for many mothers. There are regional variations to childcare costs,
but this is something the Childcare Tax Credit does not take into
account. The Childcare Tax Credit is helping parents meet childcare
costs, but research by the Daycare Trust has revealed that "the
childcare tax credit contributes to less than a third of the cost
of an average nursery place."[152]
This is not much of an incentive for workless households with
children to enter the labour market.
In addition, there is a need for more wrap-around
care as many low-paid jobs go beyond the traditional nine to five
working day. This is particularly the case for parents doing shift
work, those who start early in the morning or who work during
the evening or at weekends. It is important that childcare provision
is available to meet their needs.
We strongly support the recommendation in the
House of Commons Work and Pensions Select Committee on Childcare
for Working Parents report that called for Children's Centres
to be expanded to the 30% most deprived wards, with the aim to
establish Children's Centres in all areas.[153]
Failure to address the issues surrounding childcare will make
achieving the child poverty targets significantly difficult.
ACCESS TO
KEY SERVICES
Access to key services such as education, health
and housing to families living in poverty are key components to
breaking the cycle of deprivation. Children who are born in poverty
are at risk of staying poor, as well as having a higher risk of
illnesses. We welcome initiatives such as breakfast clubs and
after-school clubs and the benefits such initiatives bring. We
believe that breakfast clubs should be available in every primary
school.
Raising educational attainment for all children
is clearly crucial to breaking the cycle of poverty. The government
has invested record amounts in the education system but whilst
standards have improved, the record on inclusion is more questionable.
Policies such as reducing class size have had a positive impact,
but only in the schools that were over-subscribed and not the
inner city schools with a lower intake. However, the flagship
Excellence in Cities initiative is showing signs of improving
the attainment of those from disadvantaged backgrounds, but this
initiative needs to be extended more widely and sustained in the
long term. We welcome the decision to roll out Educational Maintenance
Allowances, but we believe that more still needs to be done at
an earlier stage to reduce the educational barriers faced by the
most disadvantaged children and young people.
Children living in poverty are more likely to
suffer from ill-health so the Government needs to tackle the health
inequalities that exist and improve access to health care for
those living in disadvantaged areas. The National Framework for
Children is a step in the right direction, making children's health
needs a priority, but it must be implemented fully and effectively.
We also welcome the emphasis in the Every Child Matters Green
Paper to ensuring that every child receives the help they need,
but note that significant resources will be required to make this
a reality.
CROSS-GOVERNMENT
APPROACH
For the Government to eradicate child poverty
by 2020 there needs to be a concerted effort toward this goal
by all government departments. However, some departmental initiatives
seem to contradict the aim to eradicate child poverty. For example,
to tackle school truancy fixed penalty notices and the threat
of prison to parents have or are being introduced, but there has
been very little emphasis on understanding why children truant
and on tackling the underlying causes. A child may truant because
of bullying or because of caring responsibilities or other problems
at home. In such cases, issuing fines or the threat of jail could
be totally counterproductive and result in school disaffection
and a reduction in educational attainment.
Similarly, measures such as making it easier
to evict anti-social tenants or to reduce housing benefits—as
currently proposed by the government—will only lead to the
problem being displaced and push the poorest in society into further
hardship. Such measures contradict the Government's aim to eradicate
child poverty. Instead, resources should be targeted to help and
support such families and give them opportunities to address their
problems, such as counselling, drug treatment or help getting
onto the New Deal.
George McNamara
NCH
11 September 2003
147 Budget 2003, Table 5.1: Levels of support for
families from April 2003, HM Treasury HC 500. Back
148
Speech by Dawn Primarolo MP to the CPAG, September 2003. Back
149
Labour Party 2001 Manifesto, page 28 (2002). Back
150
Dex, S Work and family life in the 21st century (2003)News Release,
Joseph Rowntree Foundation. Back
151
Woodland, S Miller, M and Tipping, S (2002) Repeat Study of Parents'
Demand for Childcare, DfES 348. Back
152
Cost of childcare soars, BBC online, 6 February, 2002 http://news.bbc.co.uk/1/low/education/1802303. Back
153
House of Commons Department of Work and Pensions Select Committee
Report, page 23, 5th Report, Session 2002-03. Back
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