75.     Subsection (3) requires the Secretary of State, as soon as reasonably practicable after the end of the target year, to lay before Parliament a report on the progress made in implementing the most recent UK strategy.

76.     Subsection (4) provides that a report must describe: the measures taken by the Secretary of State in accordance with the most recent strategy; the measures taken by the devolved administrations in accordance with their strategies; and the effect of all those measures on progress towards the targets set in clauses 2 to 5 and the aim of ensuring as far as possible that children in the UK are not affected by socio-economic disadvantage.

77.     Subsection (5) provides that if the measures in the most recent UK strategy have not been implemented in full the annual report must set out the reasons why.

78.     Subsection (6) states that before preparing an annual report the Secretary of State must consult the devolved administrations.

Clause 14: Statement required in relation to target year

79.     Clause 14 requires the Secretary of State to include a statement in the report under clause 13(3). Subsection (1) provides that this statement must describe whether the targets in clauses 2 to 5 have been met.

80.     Subsection (2) requires the statement to be based on statistics officially classified as National Statistics. In practice this means that the statistics will be taken from the Department of Work and Pensions’ Households Below Average Income data set, derived from its Family Resources Survey, and the Understanding Society survey undertaken by the University of Essex on behalf of the Economic and Social Research Council.

81.     Subsection (3) provides that the percentages given in the statement will determine whether the targets in clauses 2 to 5 have been met in relation to the target year.

82.     Subsection (4) requires that if any of the targets in clauses 2 to 5 has not been met the report under clause 13(3) must give reasons for this.

Clause 15: Economic and fiscal circumstances

83.     Clause 15(1) requires the matters mentioned in subsection (2) to be taken into account by the Secretary of State when preparing a UK strategy, and by the Commission when considering any advice to be given to the Secretary of State or the devolved administrations. The intention is to require the Commission and UK, Scottish and Northern Ireland Ministers to have regard to budgetary constraints and value for money in developing and advising on the strategies.

84.     Subsection (2) provides that the matters that must be taken into account are economic circumstances and the likely impact of any measure on the economy (subsection (2)(a)) and fiscal circumstances and the likely impact of implementing any proposed measure on taxation, public spending and public borrowing (subsection (2)(b)).

85.     Subsection (3) sets out the matters that the Scottish Ministers and the relevant Northern Ireland department must have regard to in preparing their strategies. The matters that must be taken into account are the resources that are or may be available to them (subsection (3)(a)) and the effect of the implementation of any proposed strategy on those resources (subsection(3)(b)).

Clause 16: Continuing effect of targets after target year

86.     Clause 16 introduces Schedule 2, which contains provision regarding the continuing effect of the targets after the target year.

Clause 17: Interpretation of Part 1

87.     Clause 17 provides definitions for the purposes of Part 1 of the Bill.

Part 2 - DUTIES OF LOCAL AUTHORITIES AND OTHER BODIES IN ENGLAND (Clauses 18 to 24)

Clause 18: Responsible local authorities

88.     Clause 18 sets out which local authorities will be “responsible local authorities” for the purposes of Part 2 of the Bill. They are upper-tier authorities or those with upper-tier responsibilities as well as London boroughs, the City of London and the Council of the Isles of Scilly.

Clause 19: Partner authorities

89.     Clause 19 lists public bodies and persons who will be “partner authorities” in relation to responsible local authorities for the purposes of Part 2. Some of these bodies are also listed as partner authorities for the purposes of Chapter 1 of Part 5 of the Local Government and Public Involvement in Health Act 2007.

90.     Subsection (3)(a) covers Jobcentre Plus by referring to the Secretary of State in relation to his functions under section 2 of the Employment and Training Act 1973. Subsection (3)(b) covers the Probation Services by referring to the Secretary of State in relation to his functions under sections 2 and 3 of the Offender Management Act 2007.

91.     Subsection (4) provides that the Secretary of State’s functions under Part 2 of this Bill as a partner authority, in relation to subsection (3)(b), are functions which can be performed through arrangements for the provision of probation services under section 3 of the Offender Management Act 2007. This means that they are included in the functions that are to be discharged under arrangements made under section 3 of that Act.

92.     Subsection (6) provides that the Secretary of State may, by order, amend the list of partner authorities by adding any person with functions of a public nature, removing any person, or by adding or removing references to the Secretary of State’s functions under subsection (3). The order will be subject to the negative resolution procedure. Subsection (7) provides that before making such an order, the Secretary of State must consult such representatives of local government and such other persons as he thinks fit.

Clause 20: Co-operation to reduce child poverty in local area

93.     Clause 20 (subsection (1)) imposes a duty on each responsible local authority to make arrangements to promote co-operation between the authority, each of its partner authorities, and such other persons or bodies as the authority considers appropriate. Subsection (2) provides that the purpose of these arrangements is to reduce, and mitigate the effects of, child poverty in the local authority’s area. Subsection (3)      places a duty on the partner authorities to co-operate with the local authority. The clause also enables the local authority to involve other persons or bodies, for example from the private and voluntary sectors, in the arrangements; however these persons or bodies are not under a duty to co-operate.

94.     Subsection (4) provides that the responsible local authority and its partner authorities must have regard to guidance issued by the Secretary of State. This guidance is intended to cover the arrangements that responsible local authorities should put in place. It is expected that responsible local authorities and partner authorities will use existing partnerships, such as Local Strategic Partnerships, rather than setting up new arrangements.

95.     Subsections (5) and (6) provide powers for responsible local authorities and their partner authorities to provide staff, goods, services, accommodation or other resources and to pool budgets in support of the arrangements made under this section.

Clause 21: Local child poverty needs assessment

96.     Clause 21 requires a responsible local authority, as part of the arrangements to co-operate made under clause 20, to prepare and publish an assessment of the needs of children living in poverty its area. Partner authorities must co-operate with the local authority in preparing a needs assessment.

97.     Subsection (2) gives the Secretary of State the power to make regulations about local child poverty needs assessments. Subsection (3) sets out the things that the regulations can make provision about. The intention is that the regulations will set out those matters which a responsible local authority must consider in its child poverty needs assessment, while giving the authority flexibility to consider other matters that it considers appropriate.

98.     Subsection (4) requires the responsible local authority and each partner authority to have regard to any guidance that the Secretary of State gives to them about how they should exercise their functions under this clause.

Clause 22: Joint child poverty strategy for local area

99.     Clause 22 requires the arrangements to co-operate made by a responsible local authority under clause 20 to include arrangements to prepare a joint child poverty strategy in relation to the authority’s area and to modify it in accordance with the provisions in this clause. Subsection (2) requires that the strategy must set out the measures that the authority and each partner authority propose to take for the purpose of reducing, and mitigating the effects of, child poverty in the responsible local authority’s area.

100.     Subsection (3) provides that some of these measures must relate to matters identified in a local child poverty needs assessment carried out by the authority under clause 21. The strategy can also include other measures relating to matters that the responsible local authority or a partner authority considers relevant to tackling child poverty in their area.

101.     Subsection (4) provides that the responsible local authority may modify the strategy. When revising the local child poverty needs assessment the responsible local authority must consider whether any modification of the strategy is required (subsection (5)).

102.     Subsection (6) requires the responsible local authority to consult such children, or organisations working with or representing children, as the authority thinks fit when preparing or modifying the strategy. It may also consult such other persons or bodies as it thinks fit.

103.     Subsection (7) provides a power for the Secretary of State to issue guidance, which the responsible local authority and each of its partner authorities must have regard to when exercising functions under this clause.

104.     Subsection (8) provides that the responsible local authority and each partner authority must have regard to the joint child poverty strategy in exercising their functions.

Clause 23: Sustainable community strategy

105.     Clause 23 amends section 4 of the Local Government Act 2000, which concerns the preparation of strategies for promoting well-being. The effect of the amendment is that local authorities will be required to take account of the local child poverty needs assessment, the joint child poverty strategy and other arrangements they have made to tackle child poverty in their area when preparing their sustainable community strategy.

106.     This is to ensure that measures to reduce, and mitigate the effects of, child poverty are reflected in the wider planning of local authorities.

Clause 24: Meaning of “child poverty” in Part 2

107.     Clause 24 defines “child poverty” for the purposes of Part 2 of the Bill.

108.     Subsection (2) states that a child is considered to be in poverty if the child experiences socio-economic disadvantage.

109.     Subsection (3) makes it clear children whose families fall within the relevant income groups for the purposes of clauses 2 to 4 are to be regarded as experiencing socio-economic disadvantage.

Part 3 - GENERAL (Clauses 25 to 30)

110.     Clauses 25 to 30 contain general provisions including those related to the exercise of powers to make orders and regulations; financial provisions; extent; commencement and the short title of the Bill.

Clause 25: General Interpretation

111.     Clause 25 includes a definition of “child” for the purposes of the Bill. In effect, “child” has the same meaning as “child” or “qualifying young person” for the purposes of assessing eligibility for child benefit, but actual entitlement to child benefit does not need to be proven in order to come within this definition. Section 142 of the Social Security Contributions and Benefits Act 1992 and regulations made under that Act (and similarly, for Northern Ireland, section 138 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992) set out who is eligible for child benefit.

Schedule 1: The Child Poverty Commission

112.     Schedule 1 sets out the details of the structure and membership of the Commission, including terms of office, staff and facilities.

113.     Paragraph 1 enables the Secretary of State to appoint a chair and such other members as he may determine. In addition, it requires Scotland, Wales and Northern Ireland each to appoint a representative member to the Commission.

114.     Paragraph 4 provides that the Secretary of State must consent to the terms of any appointment made to the Commission by a devolved administration.

115.     Paragraph 10 enables the Secretary of State to pay members of the Commission, or the organisations they work for.

116.     Paragraph 16 states that the Commission must comply with a request for advice made by the Secretary of State under clause 9, or by the Scottish Ministers or the relevant Northern Ireland department under clause 12. The Commission’s advice must contain reasons for that advice. The advice must be published as soon as reasonably practicable after it has been given.

117.     The effect of paragraph 17 is to make the administrative records of the Commission public records for the purposes of the Public Records Act 1958.

118.     Paragraph 18 amends Schedule 2 to the Parliamentary Commissioner Act 1967 to add the Commission to the list of bodies which are subject to investigation by the Parliamentary Commissioner for Administration in the event of maladministration.

119.     The effect of paragraph 19 is that members of the Commission are disqualified from membership of the House of Commons and the Northern Ireland Assembly.

Schedule 2: Continuing effect of targets after target year

120.     Schedule 2 places a duty on the Secretary of State to ensure that the targets, once met, are met in later financial years, and confers powers on the Secretary of State to make regulations about how the targets will apply after the target year if they are not met in that year or in any later year which is a renewed target year under the Schedule. Scrutiny will be by the affirmative resolution procedure.

121.     Paragraph 2 imposes a duty on the Secretary of State to ensure that the targets are met in any financial year immediately following a year in which the report under clause 13(3) (in relation to the target year) or statement under paragraph 8 of the Schedule (in relation to a renewed target year) is published.

122.     Paragraph 3 imposes a duty on the Secretary of State to make regulations about how the targets will be met after the end of the target year if the targets are not met in relation to the target year or any renewed target year. The regulations must be made as soon as is reasonably practicable after the final report (under clause 13(3)) or statement (under paragraph 8 of Schedule 2) is laid before Parliament (paragraph 4). These regulations must: set a new target year; require the Secretary of State, the Scottish Ministers and relevant Northern Ireland department to publish further strategies; require the Secretary of State, the Scottish Ministers and relevant Northern Ireland department, when preparing strategies, to consult the persons and bodies with whom they are required to consult under clauses 9 and 12; and require the Secretary of State to publish annual reports on the implementation of the strategies.

123.     Paragraph 5 provides that regulations made under paragraph 3 may include provision conferring or imposing functions on the Commission after the target year.

124.     Paragraph 6(a) to (d) provides that regulations made under paragraph 3 may include provision relating to: UK, Scottish and Northern Ireland strategies, and consultation on the strategies; reports; and the Commission providing further advice to the Secretary of State, the Scottish Ministers or the relevant Northern Ireland department.

125.     Paragraph 7 provides that the matters listed in clause 15(2) must be taken into account by the Secretary of State, and the matters listed in clause 15(3) must be taken into account by the devolved administrations, when preparing any strategy under regulations made under paragraph 3. The matters listed in clause 15(2) must also be taken into account by the Commission when considering any advice to be given under such regulations.

126.     Paragraph 8 requires the Secretary of State to publish a statement in relation to each renewed target year, stating whether the targets have been met in relation to that year and, if not, explaining why not.

127.     Paragraph 9(1)(a) provides that regulations may amend the target percentage and base year of the absolute low income target in its application to any financial year later than the target year. This provision is required for the purposes of measuring absolute low income because in order for it to remain an accurate measure, it will be necessary to reset the current baseline of 2010-2011 at regular intervals. This regulation-making power will be subject to the affirmative resolution procedure.

128.     Alternatively, paragraph 9(1)(b) provides that regulations may make provision to repeal clause 4 (the absolute low income target), and the reference to this target in clause 24(3)(a). This power is subject to the affirmative resolution procedure. If the necessary growth in incomes has been achieved by 2020, it may be decided that it is not necessary to establish a new absolute low income target.

129.     Paragraph 9(2) makes it clear that paragraph 9(1)(b) is not intended to have effect in relation to financial years before the regulations are made.

FINANCIAL EFFECTS OF THE BILL

130.     The Bill does not specify exactly how the eradication of child poverty is to be achieved. It does not anticipate future decisions on public expenditure. Therefore it is not possible fully to quantify the wider costs that may result from the Bill. The legislation has the effect of requiring Ministers to consider a wide range of interventions through public services and the contribution of broader policy areas. The Government believes this to be a more cost-effective and sustainable route than increasing tax credits and benefits, which has been the basis of costings by the Institute for Fiscal Studies (IFS). The IFS gives a likely (upper) estimate of the financial costs of reducing child poverty of around £19 billion in 2020. ²

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2   Micro-simulating child poverty in 2010 and 2020, Brewer, Brown and Sutherland, The Institute for Fiscal Studies, February 2009.

131.     It is nearly impossible to quantify the financial benefits of eradicating child poverty. Growing up in poverty can damage cognitive, social and emotional development, which are all determinants of future outcomes for a child. The Joseph Rowntree Foundation estimates that child poverty costs at least £25 billion a year in Britain, and that £17 billion could accrue to the Exchequer if child poverty were eradicated. ³ However, this is a possible under-estimate of the true benefit. There are other benefits associated with the eradication of child poverty which are difficult to quantify such as equity, reducing hardship, deprivation and exclusion and breaking the intergenerational poverty link.

132.     There is likely to be a small increase in public sector administrative costs as a result of this Bill, estimated at an annualised average of £7,260,000 in 2008/9 prices. The Bill establishes the Child Poverty Commission, which will be supported by a secretariat at an estimated annualised cost of £140,000. The Government estimates that the annualised cost of producing a child poverty strategy every three years will be £780,000. Requiring the Secretary of State to publish a report on progress against its strategy and the targets in every year to 2020 will have an estimated annual cost of £110,000. Finally, the duty on local authorities to work together with their partners to tackle child poverty and set out the contribution that they make in their local area, including the preparation of a child poverty needs assessment, is estimated to have an annualised cost of £6,080,000.

EFFECTS OF THE BILL ON PUBLIC SECTOR MANPOWER

133.     Duties on local authorities resulting from the measures in this Bill may require an additional policy officer in every Local Authority in England only.

SUMMARY OF THE IMPACT ASSESSMENT

134.     The impact assessment for the Bill analyses the costs and potential benefits of the proposals and assesses their possible impact on race, gender and disability equality. On balance the impact assessment finds the evidence points towards an economic case for tackling child poverty, as set out in the Bill. Copies are available for Members in the Vote Office. It is also available online at:

EUROPEAN CONVENTION ON HUMAN RIGHTS

135.     Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement before second reading about the compatibility of the provisions of the Bill with the European Convention on Human Rights (as defined by section 1 of that Act). The Financial Secretary to the Treasury, Stephen Timms, has made the following statement:

136.     “In my view, the provisions of the Child Poverty Bill are compatible with the Convention rights.”

Part 1 National targets, strategies and reports

Clauses 1 to 6 - Targets relating to child poverty

137.     It could be argued that these provisions engage Article 14, in connection with Article 8 and Article 1 of Protocol 1. This is because the income targets apply only to children in “qualifying households”, a term which will be defined in regulations and will be based on the criteria used to collect the data by which the indicators are measured. This data is collected using a set of procedures and instructions which allow the greatest coverage of the target population within practical constraints. The surveys necessarily exclude certain persons, for example, children who live in communal accommodation, such as a children’s home. Although no children will be excluded from the surveys simply on the basis of their status, for some groups the likelihood of them being excluded is higher than for some other groups because they are less likely to live in accommodation with a postcode (for example, the children of Gypsy and Roma families). Therefore there could be issues of indirect discrimination.

138.     The Government does not consider that these clauses in the Bill are incompatible with Article 14. Article 14 requires a link to another substantive Convention right. The Government considers that the link to Article 8 and Article 1 of Protocol 1 is too tenuous.

139.     The high level nature of its provisions means that nothing in the Bill directly affects the rights of individuals: it informs the policy behind the exercise of existing functions that might impact on child poverty, and provides a framework by which other concrete action, for example, changes in relation to social security benefits or tax, may take place and be evaluated. Any specific initiatives or legislation taken to implement the policy of alleviating child poverty, for example changes to benefits or tax, would require further legislation which would itself need to be compliant with Convention rights.

140.     Even if it could be shown that provisions of the Bill are within the scope of Article 8 or Article 1 Protocol 1, the Government considers that the clauses setting out the targets do not breach Article 14, because “qualifying households” is to be defined in regulations. Therefore the Bill itself does not exclude anyone from the indicators and the power to make regulations will be exercised in a way that is compatible with Convention rights. Furthermore, by including a duty to prepare and publish a strategy in relation to all children in the UK the Bill goes further than setting targets in relation to children in qualifying households. There is nothing in the Bill which requires those strategies to exclude children who are not caught by the targets.

141.     The Government further considers that it is justifiable and proportionate to set targets by reference to a definition of “qualifying household” which might exclude a very small minority of children for the purposes of measurement of the targets. Legislation which imposes a target relating to the reduction of child poverty must contain some means of measuring whether that target has been met. The indicators set out in the Bill will ensure that 99.5% of children in the UK are included in this measurement. To include more children in the indicators would involve an exercise that is more extensive than the existing census, which would be impracticable.

Clause 8: UK strategies

142.     Clause 8 provides that, in preparing the UK strategy, the Secretary of State must consider measures for the promotion and facilitation of the employment and skills of parents; the provision of financial support for children and their parents; health, education and social services; and housing, social inclusion and the natural and built environment. This might give rise to issues under Article 1 of Protocol 1 and Article 8.

143.     The Government considers that these Articles are not engaged by the strategy provisions. As explained above, nothing in the Bill directly affects the rights of individuals because there are no entitlements or benefits granted by the Bill itself. Furthermore, clause 8(3) gives the Secretary of State discretion to include such measures in the strategy, so the Bill does not require any of the measures listed to be set out in the strategy. A duty to consider measures cannot be said to engage a person’s Convention rights

144.     Issues could arise under Article 14 (combined with Article 8 or Article 1 of Protocol 1) in that clause 8(3) anticipates that there could be a difference in treatment between children who have relatively low living standards and adults, particularly childless adults, with similar living standards. The Government considers that Article 14 is not engaged because, as explained above, the provisions do not fall within the scope of Article 8 or Article 1 of Protocol 1. Even if it could be shown that the Bill will lead to a difference in treatment regarding any impact upon private or family life, or rights in relation to property, the Government is of the view that this can be justified because it is proportionate and in pursuance of a legitimate policy aim, namely the economic interests of the country and the need to make the best use of public funds.