Written evidence from Barnardo's
INTRODUCTION
Barnardo's recognises that the Government is
compelled to make significant reductions in public expenditure
and in doing so there is, inevitably, a potential to hit the poorest
hardest. So, we welcome the Coalition Government's efforts both
in the budget and the CSR announcement to limit the impact of
the cuts on poor families, But we argue that more could have been
done to protect the poorest by taking a different approach on
child benefit and by finding savings from other universal benefit.
Such action might have allowed the Government
to make some progress on alleviating child poverty. Trumpeting
that the Budget and the CSR will not make child poverty worse
is not sufficient when the coalition is committed to eradicate
child poverty by 2020. If significant progress toward that target
is not made in this Parliament then it may as well be forgotten.
The Government must now ensure that when budget
cuts are translated into service cuts by local authorities and
others that poor and vulnerable children are not disproportionately
affected. We are particularly anxious that investment in Sure
Start is sufficiently protected. The nature of the Government
guarantee in this respect is less than watertight.
UNIVERSAL BENEFITS
Being aware that the £11 billion spent
on child benefit could not be maintained but anxious to divert
the government from cutting child benefit for older children,
Barnardo's proposed the means testing of child benefit before
the Chancellor's announcement at his party conference.
But our recommendation was that child benefit
should, essentially, be absorbed into the child tax credit system
which takes account of family incomes. If implemented, our recommendations
would have saved £5.1 billion and would not have prompted
the shouts of unfair which have greeted the detail of the Chancellor's
proposal.
Had the Government at the same time made savings
to other universal benefits, including the winter fuel allowance
total additional annual savings of up to £1.4 billion could
have been made[61]
and used to reduce child poverty and protect investment in early
intervention. Will the Government look again at the potential
for realising greater savings from universal benefits to protect
services for the poorest families?
CHILD POVERTY
We noted that the Government ensured that child
poverty will not rise over the next two years thanks to the planned
increases in child tax credits. Although this is welcome, we are
concerned that it is based on analysis which excludes changes
such as cuts to housing benefit, which can account for 25% of
a poor family's income. Can the Government clarify how the
child poverty assessment was modelled and specifically which changes
have been excluded from the assessment?
We are further concerned that there was no indication
of what will happen to child poverty after 2013, and what the
likelihood is of the Government meeting the 2020 targets. Can
the Government confirm that it is still committed to and able
to meet the target to end child poverty by 2020 and what its strategy
is for this Parliament?
CHANGES TO
THE WELFARE
SYSTEM
Barnardo's is enthusiastically supportive of
the Government's plan to make work pay by introducing the Universal
Credit system over the next two Parliaments. It provides an opportunity
to reduce administrative complexities, bring benefits together
and allows a smoother transition from benefits to work. A high
earnings disregard along with a single taper will enable individuals
to undertake work for less than 16 hours a week and ensure that
working more hours pays more. Most of all, the proposals have
the potential to lift many thousands of children out of poverty.
Has the potential of these reforms to lift families out of
poverty been modelled? If so, what are the results of this analysis?
By contrast, we are concerned that the cuts
to working tax credit combined with increases to child tax credit
will weaken work incentives for poor families now. In particular,
the reduction in childcare support and the increase in the number
of hours couples need to work in order to qualify for working
tax credit threaten the incentive of families to take the first
steps into part time employment. Is this consistent with the
longer term goal of increasing employment amongst lone parents
and non-earning partners in couples? How does the Government square
the weakening of work incentives now whilst advocating stronger
work incentives in the future?
SURE START
Barnardo's was pleased to see that the Government
has shown a commitment to good quality, early years provision
by protecting the Sure Start budget and extending the 15 hour
entitlement to all disadvantaged two-year-olds.
It appears that current Sure Start investment
is to be part of the new Early Intervention Grant and it is unclear
to what extent it will be open to local authorities to spend current
Sure Start investment in different ways. Can the Government
confirm the extent to which the current investment in Sure Start
will be protected?
We welcome the expansion in the number of Sure
Start health visitors. However, there is still uncertainty as
to where the funding for this has been earmarked. Is funding
for Sure Start health visitors included in the Early Intervention
Grant allocation, or will it come from elsewhere?
We welcome the flexibilities that have been
introduced by pooling money available for early intervention and
preventative services into the new Early Intervention Grant, and
the introduction of community budgets. This flexibility will have
limited impact unless there are resources to back it up. The Early
Intervention Grant will be worth £2 billion by 2014-15, and
Sure Start revenue funding will constitute £1.55 billion.[62]
How much will the Early Intervention Grant be worth in 2011-12,
2012-13 and 2013-14?
Assuming that new health visitors are also funded
through this grant,[63]
we believe that a maximum of £240 million will be left for
all other early intervention programmes. We suspect this will
mean a significant reduction in investment in other areas of early
intervention and in the region of 15%. Can the government confirm
that?
November 2010
61 Scrapping winter fuel payments and free TV licences
and increasing Pension Credit to ensure that no poor households
lose out would save £1.4 billion; or alternatively taxing
winter fuel payments as income would save £200 million (IFS
Green Budget, February 2010). Back
62
This is the cash value of Sure Start revenue grants for 2010-11. Back
63
Based on the cost of hiring a full time health visitor averaging
£50,000 each, 4,200 health visitors will cost £210 million
per year. Back
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