Children in poverty: Measurement and targets – Report Summary

This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.

Author: Work and Pensions Committee

Related inquiry: Children in poverty: Measurement and targets

Date Published: 22 September 2021

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Summary

Children are more likely to be living in income poverty than adults. Even before coronavirus, child poverty was a growing concern—and there is clear evidence that families who were already in poverty before the pandemic have been acutely affected by it.

For that reason, we decided in January of this year to launch a wide-ranging inquiry to look at what more the Government could do to reduce the number of children growing up in poverty in the UK. This is a complex subject and so our work will be in several parts.

We have begun our review by investigating how child poverty can most accurately be measured and defined, and how the Department for Work and Pensions (DWP) should work with other parts of Government to reduce the numbers of children living in poverty.

Defining poverty

There is no single definition of poverty. Most contributors to our inquiry agreed that poverty is at least partly about not having enough material resources to meet minimum needs, once the cost of living is taken into account. The most common way of measuring this is by using income. Other methods are also used—in particular, measures of material deprivation, which ask families if they can afford certain goods, services or activities that are deemed essential.

Ministers told us that they are focused on an ‘absolute’ measure of poverty, which they consider to be a more useful metric, and more closely aligned with what most people think it is to be poor. We are concerned to see Ministers focusing on a single measure, rather than drawing on the rich information offered by DWP’s own set of income-based measures, which combines relative, ‘absolute’ and broader material deprivation statistics. We recommend that Ministers reaffirm their commitment to all four of DWP’s income-based poverty measures.

Consequences and causes of childhood poverty

As well as defining poverty in income terms, there are a broader set of related factors associated with poverty which are also measured. It is not always easy to separate the causes of income poverty from its consequences, especially when considered across generations. But what is clear is that poverty in childhood has significant consequences for children’s lived experiences now and for their outcomes later in life. Increases in child poverty are associated with increases in infant mortality.1

We heard that children living in disadvantaged neighbourhoods were much more likely to end up in care, and that income poverty is associated with poorer educational outcomes, higher infant mortality, mental health problems, obesity, chronic illness, and a much higher risk of death in early adulthood. Analysis shows that a third of the increase in infant mortality from 2014 to 2017 may be attributed to rising child poverty.2

In 2014, a DWP review concluded that parental worklessness and low earnings were key factors driving child poverty. DWP also said that low educational attainment was the main factor increasing the risk that a poor child grows up to become a poor adult. But DWP’s analysis also showed that childhood poverty itself increased the risk of poverty in adulthood because of its effect on educational attainment. Other witnesses told us that rising living costs, low pay, limited and insecure work and reforms to social security since 2010 were all factors driving recent trends in child poverty. Further changes to the labour market, reforms to social security and a growing proportion of children in poverty in working families, compounded by the effects of the pandemic, leads us to conclude that DWP now needs to look again at the evidence on child poverty. We recommend that DWP commissions a new review of the latest evidence on child income poverty, its definitions, its causes and its consequences.

Measuring child poverty

Poverty measurement is important because it translates abstract concepts and definitions into very concrete expressions of who is poor and who needs extra help. Doing this necessarily involves judgements about what to measure and how those measurements should be used. The Welfare Reform and Work Act 2016 placed a duty on the Secretary of State to measure indicators of worklessness and educational attainment alongside four income-based measures of poverty that were previously referred to in the Child Poverty Act 2010. The Government in 2016 argued that indicators of worklessness and educational attainment directed policy attention to the underlying causes of child poverty.

We think these indicators are useful as part of a wider measurement framework which assesses the causes and consequences of child income poverty, but they are not a substitute for measuring poverty itself. Nor do they measure the amount and quality of work, and the quality of support available to young families. We recommend that DWP should broaden the scope of its metrics, acknowledging that most children in poverty are in working families.

A single measurement framework

DWP’s key collections of poverty and wider social deprivation statistics, including worklessness and educational attainment, are all published separately. The Office for National Statistics also publishes its own statistics on household income. There is no consolidated publication or central webpage supported by a clear narrative setting out how all the measures link together. The current arrangements are a missed opportunity. DWP should develop and present a comprehensive poverty measurement framework which brings together core income measures of child poverty alongside wider deprivations including those related to education, health, family and work. It should continue to learn from recent international approaches to poverty measurement which draw on multidimensional techniques.

The Social Metrics Commission has devised its own framework for measuring poverty, intended to achieve a new political consensus. In 2019, DWP announced that it would publish “experimental” statistics based on the Social Metrics Commission’s measurement framework. This work was suspended following the start of the pandemic, which was understandable. But progress now seems to have ground to a halt. The Secretary of State told us that DWP was still deciding on its strategy. DWP needs to be clearer about its plans for poverty measurement.

Need for a child poverty strategy

The Welfare Reform and Work Act 2016 removed the requirement in the Child Poverty Act 2010 to publish a UK wide child poverty strategy. We heard strong views that the absence of a strategy has left the Government without a clear focus on tackling child poverty, with departments working in siloes and a lack of clear leadership.

The Secretary of State for Work and Pensions chairs a new Inter-Ministerial Group on measures to address the cost of living. That is a welcome development. But the work of that group cannot be a substitute for a meaningful strategy, given the scale of the challenge.

The Government must now commit to implementing a cross-departmental strategy for reducing child poverty, setting clear and measurable objectives which draw on the latest evidence.

Quality, timeliness and completeness of child poverty data

DWP publishes its statistics about households in low income a long time after the period to which they relate; for example, the first publication of data relevant to experiences during the pandemic will not be available until March 2022. The Department should make better use of the administrative data it holds about benefit claimants, as well as HMRC’s tax records, to produce closer to ‘real-time’ data on child poverty to inform its strategy and account for its performance. We were encouraged to hear that DWP is working with the Department for Health and Social Care to measure the longer-term impacts of the pandemic on families’ labour market and health outcomes. It should supplement this analysis by commissioning targeted research into the impacts of the pandemic on children living in low income families.

DWP also needs to collaborate more with other producers of income statistics in Government and with key academic partnerships to get the best evidence it can on child poverty. The quality of data that DWP collects through its key survey on poverty and income, the Family Resources Survey, has been limited by its sample size, reducing understanding of child poverty and solutions to it. We welcome DWP’s decision to increase the sample size of the Family Resources Survey, which will enable more detailed analysis of some families and their children in poverty, including ethnic minority families. But the increased sample size will not be enough to address the real dearth of data on children in families with no recourse to public funds. We recommend that DWP works with others in Government to address this gap in its understanding.

Other data gaps, including those on the extra costs of disability or unavoidable debt repayments, further reduce our understanding of which children and families are in poverty. To improve its measurement of income poverty, DWP should work with others, including the Office for National Statistics, to identify a list of inescapable household costs and define options for how data on these might be collected.