Welfare Reform and Work Bill

Written evidence submitted by Professor Jonathan Bradshaw (WRW 14)

UNIVERSITY OF YORK

Social Policy Research Unit

EVIDENCE TO THE WELFARE REFORM AND WORK BILL COMMITTEE

CHILD POVERTY MEASUREMENT

Jonathan Bradshaw FBA, CBE [1]

Summary

This evidence presents arguments in favour of retaining the Child Poverty Act target measures.

1. There is no perfect measure of poverty – all measures are more or less flawed. That is why, in a process that has taken over a century, the UK eventually reached a consensus that a portfolio of measures was best. Poverty has always been used to describe a lack of material resources and child poverty as children living in households lacking material resources. The portfolio of official measures used in the UK was developed after the Thatcher government in the 1980s decided to replace the Low Income Statistics series which had been based on a threshold based on social assistance scales, with measures based on proportions of the mean , and later, median income. There was a lot of discussion between government statisticians and the academic community about – which threshold to use, median or means, before or after housing costs, equivalence scales, and so on. These exchanges resulted in the Households below average income series (HBAI) which has become a first class annual compendium of data on poverty produced by DWP statisticians. In the early 2000s a deprivation measure was added to the portfolio based on the experience of the Poverty and Social Exclusion Survey [2] .

2. In 2010 the Child Poverty Act adopted a selection of the portfolio of measures to establish four targets that had to be met by 2020 and a fifth was added later. These were:

i. The so-called relative measure: the percentage of children in households with incomes less than 60% of the contemporary median. The target was to reduce this to 10% by 2021.

ii. The so called absolute (I prefer "anchored") measure: the percentage of children in households with incomes less than 60% of the median, held constant at 2010-11 prices. The target was to reduce this to 5% by 2021.

iii. The low income and deprivation measure: the percentage of children in households with less than 70% of contemporary median income and lacking ‘necessities’ because they cannot afford them. There is a list of 12 necessities covering essential household and personal items, adequate personal space as well as access to leisure activities to achieve a reasonable standard of living. For example a washing machine in the household, a bedroom for each child of the opposite sex aged more than ten-years-old, school trips, a warm winter coat, a hobby and celebrations on special occasions. The target for 2021 was to achieve that only 5% of children would live in a household that was missing some of these necessities.

iv. Persistent low income is a measure of deprivation over time: the percentage of children in households with income less than 60% of contemporary median in three out of four years. The 2021 target was 7%.

v. Severe low income and material deprivation: the percentage of children in households with income less than 50% of the median and lacking necessities because they cannot afford them. This 2021 target was 0%.

3. This set of targets is not perfect. Some would argue that we need a measure of poverty gaps – how far below the threshold poor households are. But it has many qualities - combining relative and absolute thresholds, an overlapping low income and deprivation measure, a measure of persistent poverty and a severe low income and deprivation measure.

The HBAI statistics are extremely enlightening, giving a detailed breakdown of the rates and composition of the poor population, households, children and pensioners; before and after housing costs and using 50%, 60% and 70% of the median thresholds. I think we can claim that the UK is the world leader in national data on poverty and has influenced the approaches adopted by the European Commission, OECD, UNICEF and even the World Bank.

4. The Government has now published the Welfare Reform and Work Bill which will among other things amend the Child Poverty Act 2010 by removing the duty on the Secretary of State to meet UK wide targets and creating a new statutory duty to publish an annual report on children in workless households in England and on the educational attainment of children in England at the end of Key Stage 4. These two new statutory measures will each contain two measures, so there are to be four measures:

• Children in workless families

• Children in long term workless families

• Educational attainment for all children

• Educational attainment for disadvantaged children.

5. These are important indicators of child well-being. They were included in the DWP series Opportunity for All [3] which was established to monitor the child poverty strategy after 1999. This series covered not only income poverty, but also used indicators of children living in workless households, child health, educational attainment, and housing. In all, there were 24 indicators covering children and young people. Unfortunately, the series was abandoned after 2007. By then the indicators had all become Public Service Agreement (PSA) targets and many were incorporated into the UK National Action Plan for Social Inclusion reports that the UK had to produce every two years for the European Union. This was unfortunate, because the National Action Plan process was abandoned by the EU soon after.

6. Many of these indicators are used routinely in the series of books that we have produced on the well-being of children in the UK [4] , as well as in the new Office of National Statistics series on the well-being of children [5] .

7. But children in workless families and educational attainment are not measures of poverty. They are, of course associated with poverty – the risk of being poor is greater in workless families, but two thirds of poor children have a parent in employment. Poor children tend to have lower educational attainment on average, but many poor children don’t and some rich children do. If we want to measure lack of material resources we need to measure it more directly – as we have sought to do for over a century of social science research.

8. Indeed social scientists will continue to use the HBAI reports to monitor child poverty. If the government abandons the HBAI series, I am confident that it will be replicated by the academic community. The European Commission, OECD, the Luxembourg Income Study, UNICEF and UNDP will all continue to publish measures of poverty based on income and deprivation.

9. I am afraid that most social scientist in the UK, and observers around the world, will view these proposals as just - silly.

September 2015

---

[1] Emeritus Professor of Social Policy, University of York, Social Policy Research Unit, University of York, Heslington, York, YO1 5DD jonathan.bradshaw@york.ac.uk

[1] http://php.york.ac.uk/inst/spru/profiles/jrb.php

[2] Gordon, D., Adelman, L., Ashworth, K., Bradshaw, J., Levitas, R., Middleton, S., Pantazis, C., Patsios, D., Payne, S., Townsend, P. and Williams, J. (2000) Poverty and Social Exclusion in Britain, Joseph Rowntree Foundation: York

[3] DWP (2005) Opportunity for All : seventh annual report 2005 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/272193/6673.pdf

[4] Bradshaw, J. (ed) (2011) The well-being of children in the United Kingdom, Third Edition, Bristol: Policy Press.

[5] http://www.ons.gov.uk/ons/rel/wellbeing/measuring-national-well-being/exploring-the-well-being-of-children-in-the-uk--2014/rpt-measuring-national-wellbeing-children-uk-2014.html