APPENDIX 1: CHILD POVERTY BILL
Memorandum by the Child Poverty Unit (joint unit
of the Department for Children, Schools and Families (DCSF), the
Department for Work and Pensions (DWP) and Her Majesty's Treasury
(HMT))
Introduction
1. This Memorandum identifies
the provisions in the Child Poverty Bill which confer powers to
make delegated legislation. For each power, or where appropriate,
group of powers, the memorandum explains:
- the purpose of the delegated power;
- why matters are to be left to delegated legislation;
- the way in which the power is expected to be
used; and
- the nature of, and justification for, the Parliamentary
procedures which apply.
2. The descriptions of the powers
are arranged in the order that the powers appear in the Bill.
The Delegation of Powers
3. In deciding whether subordinate
legislation is the appropriate vehicle for any particular provision,
the Government has had regard to the following considerations:
- the need to present substantive policy clearly
in primary legislation;
- the need to ensure flexibility to respond to
changing circumstances; and
- the difficulties associated with including detailed
and technical provision on the face of the Bill.
Background
4. An account of the policy initiatives
introduced to tackle child poverty can be found in Ending Child
Poverty: Everybody's Business[1],
which was published in March 2008. In December 2003, the Government
published Measuring Child Poverty[2]
which set out a framework for measuring child poverty based on
three measures: relative low income; absolute low income; and
combined low income and material deprivation. The Government currently
monitors child poverty against these three measures with a target
attached to the relative low income measure of halving the number
of children in poverty by 2010-11, on the way to eradicating child
poverty by 2020 (Public Service Agreement 9). Public Service Agreements
detail the aims and objectives of UK government departments for
a three-year period. There is, however, no statutory basis for
this target and no statutory duty on the Government to make progress
against any of the child poverty measures.
5. In January 2009, the Government
published the consultation document Ending Child Poverty: Making
It Happen.[3]
A summary of the consultation
responses is being published.
Overview of the Bill
6. The purpose of the Bill is
to define success in eradicating child poverty and create a framework
to drive and monitor progress at a national and local level. The
Bill is in three Parts which are summarised below:
Part 1 (clauses 1 - 17)
- Part 1 of the Bill sets out the duties of the
Secretary of State to ensure that four UK-wide income targets
relating to child poverty are met in relation to the target year
(currently the financial year beginning 1 April 2020). Clauses
2 to 5 describe these targets and clause 6 provides definitions
of the terms used in these clauses. Clause 16 introduces Schedule
2, which requires the Government to ensure that the targets, once
met, are met in later financial years, or to make provision about
how to meet them if the targets have not been met by the target
year or any later year.
- Clause 7 establishes the Child Poverty Commission
and outlines its functions. Details about the Commission are set
out in Schedule 1.
- Clause 8 places a duty on the Secretary of State
to prepare a UK-wide child poverty strategy and to update this
strategy within a three year period. Clauses 8 and 9 specify the
content of that strategy, the parties that must be consulted when
the strategy is being prepared and requires the Secretary of State
to have regard to any advice provided by the Commission relating
to the strategy.
- Under clause 13, the Secretary of State is also
required to report annually to Parliament on progress toward meeting
the targets in clauses 2 to 5 and in the implementation of the
strategy. Clause 14 requires that the final report must contain
a statement as to whether or not the targets have been met.
- Clauses 10 and 11 also require the Scottish Ministers
and the relevant Northern Ireland department to prepare child
poverty strategies, which must also be revised at three year intervals.
Clause 12 specifies who the devolved administrations must consult
and provides that they must have regard to the advice of the Commission
in preparing their respective strategies.
Part 2 (clauses 18 - 24)
- Part 2 makes provision requiring co-operation
at a local level to tackle child poverty. Clause 20 imposes a
duty on each responsible local authority to make arrangements
to promote co-operation between itself and its partner authorities
for the purpose of reducing, and mitigating the effects of, child
poverty in its area. As part of these arrangements, clause 21
requires the local authority to prepare and publish an assessment
of the needs of children living in poverty in its area.
- The responsible local authority is also required
in clause 22 to prepare a joint child poverty strategy, setting
out the measures that it and each of its partner authorities propose
to take to tackle child poverty in its area. In each case, local
authorities and their partners are required to have regard to
guidance issued by the Secretary of State.
- Clause 23 amends section 4 of the Local Government
Act 2000 to require responsible local authorities to take account
of their local child poverty needs assessment, their joint child
poverty strategy and other arrangements they have made to tackle
child poverty when preparing their Sustainable Community Strategy.
Part 3 (clauses 25 - 30)
- Part 3 contains general provisions.
Schedules
- Schedule 1 concerns the structure and functions
of the Commission.
- Schedule 2 contains provision regarding the continuing
effect of the targets after the target year.
Provisions for Delegated Legislation
7. This section covers the provisions
that contain powers to make regulations and orders. It is intended
that all of the delegated powers are to be exercised by the Secretary
of State by way of statutory instrument. The Government has considered
on a case by case basis the most appropriate procedure to be followed
when exercising delegated powers.
8. The Bill includes three delegated
powers that will be subject to the negative resolution procedure:
- a power in clause 4(3) to make
regulations prescribing the manner in which the absolute poverty
indicator is to be adjusted to reflect changes in the Retail Price
Index;
- a power in clause 19(6) to amend
by order the list of bodies considered partner authorities in
relation to a responsible local authority; and
- a power in clause 21(2) to make
regulations about local child poverty needs assessments.
9. The Government considers that
the remaining powers in the Bill to make delegated legislation
are of sufficient importance that they should be made subject
to the affirmative resolution procedure.
Part 1: National Targets, Strategies and Reports
10. Part 1 sets four child poverty
targets that must be achieved by 2020 and establishes an accountability
framework to drive progress at a national level towards this aim.
It provides powers for delegated legislation to be made on the
following matters:
- Clause 3: a power to specify in
regulations the circumstances in which a child would be regarded
as experiencing material deprivation in a particular financial
year, for the purposes of the combined low income and material
deprivation target (affirmative resolution procedure);
- Clause 4: a power to prescribe
the manner in which the absolute low income target is adjusted
to reflect changes in the Retail Price Index (negative resolution
procedure);
- Clause 5: a power to set in regulations
a target percentage relating to persistent poverty (affirmative
resolution procedure); a power to substitute a different persistent
poverty target (affirmative resolution procedure);
- Clause 6: a power to enable provision
to be made in regulations about a number of technical definitions
underpinning the child poverty targets in clauses 2 to 5 (affirmative
resolution procedure);
- Clause 7: a power to abolish the
Commission by order, at any point after the end of the target
year (affirmative resolution procedure).
11. The provisions which include
delegated powers are described in detail below.
Clause 3: The combined low income and material
deprivation target
Powers conferred on: Secretary of State
Powers exercised by: regulations made by statutory
instrument
Parliamentary procedure: affirmative resolution
procedure
12. Clause 3 sets the combined
low income and material deprivation target. The target is that,
by the end of the financial year beginning 1 April 2020, less
than 5% of children who live in qualifying households live in
households which have an equivalised net income below 70% of median
equivalised household income and experience material deprivation.
This target focuses on those children who live in households that
experience both a low income and a low standard of living, meaning
that they are experiencing the effects of living in poverty.
13. Subsection (3) imposes a duty
to make regulations setting out the circumstances in which a child
would be regarded as experiencing material deprivation in a particular
year. These circumstances might include the household in which
the child lives being unable to afford particular goods or services.
14. The regulation-making power
will enable the Government to establish what is meant by 'material
deprivation' and to update this definition over time to ensure
that the combined low income and material deprivation target continues
to reflect contemporary living standards. Experts consulted by
the Child Poverty Unit have advised that such adjustments may
be needed. The Government believes that because of the sensitivity
around the setting and amending of the measurement details of
this child poverty measure, exercise of these powers should be
subject to the affirmative resolution procedure.
Clause 4: The absolute low income target
Powers conferred on: Secretary of State
Powers exercised by: regulations made by statutory
instrument
Parliamentary procedure: affirmative resolution
procedure and negative resolution procedure
15. Clause 4 sets the absolute
low income target. The target is that less than 5% of children
living in qualifying households live in households that have an
equivalised net income for the financial year below 60% of median
income in the financial year beginning 1 April 2010, uprated annually
in line with inflation. Many respondents to the consultation Ending
Child Poverty: Making it Happen indicated that it was important
for the Bill to include an absolute low income target.
16. Subsection (3) provides
a regulation-making power to set the calculation for uprating
the base amount annually, taking into account changes in prices,
as measured by the Retail Price Index. The provisions of these
regulations involve a level of technical detail that the Government
believes is not appropriate to set out in the Bill. As this power
is uncontroversial, the intention is that it should be subject
to the negative resolution procedure.
Clause 5: The persistent poverty
target
Powers conferred on: Secretary of State
Powers exercised by: regulations made by statutory
instrument
Parliamentary procedure: affirmative resolution
procedure
17. Clause 5 sets the persistent
poverty target. This target relates to the percentage of children
living in households whose equivalised net income has been less
than 60% of median equivalised net household income for at least
three out of the past four years. The target is included because
longer periods in poverty can have a significant detrimental impact
on children's experiences and life chances. Research shows that
children who live in persistent poverty are likely to be at risk
of worse outcomes than those who live in temporary poverty, for
example, being suspended or expelled from school (11% compared
to 6%) or living in bad housing (48% compared to 33%).[4]
18. Subsection (3) provides for
the target percentage to be set by regulations which must be made
before 2015. The target level cannot be set in primary legislation
because the required data is not yet available.[5]
The Government expects that sufficient data will be available
before 2015.
19. Subsection (5) provides that
instead of exercising the regulation-making power provided in
subsection (3), to set a target percentage relating to persistent
poverty, the Secretary of State may instead substitute a different
persistent poverty target. This power may be necessary if, for
example, evidence emerges that a new target would be a more reliable
measure of persistent poverty. Regulations made under this power
may only be made before 2015 and with the consent of the Commission
(subsection (6)).
20. Recognising the sensitivities
of setting the target percentage, or amending the persistent poverty
target, the Government considers it appropriate that these powers
should be subject to the affirmative resolution procedure.
Clause 6: Interpretation of terms used in relation
to targets
Powers conferred on: Secretary of State
Powers exercised by: regulations made by statutory
instrument
Parliamentary procedure: affirmative resolution
procedure
21. Clause 6 enables provision
to be made for a number of technical terms underpinning the child
poverty targets in clauses 2 to 5 to be defined in regulations.
22. The child poverty targets
are defined in the Bill in such a way that success can be measured
by Government analysis of statistical surveys. Currently, data
for the relative low income, combined low income and material
deprivation, and absolute poverty targets is taken from the Households
Below Average Income dataset that is derived from the Department
for Work and Pensions' Family Resources Survey. The Family Resources
Survey collects income data from a representative sample of UK
households each year. Data relating to the persistent poverty
target will be derived from a new survey Understanding Society
to be undertaken by the University of Essex on behalf of the Economic
and Social Research Council. This survey will work on a similar
basis to the current survey used to measure persistent poverty,
the British Household Panel Survey, which follows the same households
over a number of years.
23. If survey methodologies improve
with regard to measuring income and poverty for children, and
these improvements are incorporated into these surveys, then it
may be necessary to amend the definitions used for the child poverty
targets in the Bill so that they match the definitions used in
the survey. This would ensure that the survey is still able to
measure success against the targets as defined in the Bill. If
no such regulation-making powers were conferred, and the survey
methodology changed, then it is possible that the survey could
not be used to measure success against the targets.
24. These powers will also ensure
that if the way in which income is defined for the relevant survey
statistics changes in response to research or methodological evidence,
these changes can be reflected in the definitions used in the
Bill.
25. Subsection (1)(a) provides
a power to set out in regulations the definition of a 'qualifying
household' for the purposes of the child poverty targets. Qualifying
households are likely to be defined according to the rules the
surveys use to sample households.
26. Subsection (1)(b) provides
a power to define the circumstances in which a child is or is
not to be regarded as living in a qualifying household. This would
cover, for example, situations where a child spends part of the
week with one parent and part of the week with another.
27. Subsection (1)(c) provides
a power to set out in regulations what is to be regarded as the
income for a household for the financial year, for the purposes
of the targets. This is likely to set out how different types
of income from different family members is to be treated, and
how the income data collected is to relate to a financial year.
28. Subsection (1)(d) provides
a power to make provision about what deductions are to be made
from a household's income in calculating its net income. Subsection
(2) provides that any deductions prescribed under regulations
made under subsection (1)(d) must not include housing costs, but
regulations made under that subsection may provide that specified
expenses are not to be treated as housing costs.
29. Subsection (1)(e) provides
a power to set out in regulations how household income is to be
equivalised. Income is equivalised using equivalence scales, which
reflect the extent to which households of different size and composition
require a different level of income to achieve the same standard
of living. There are a number of different scales that could be
used and the intention is that regulations under this power will
set out the equivalence scale to be used for the purpose of calculating
household income under the Bill.
30. It is also the Government's
intention to ensure that as many children are covered by the child
poverty targets as is practicable, having regard to the statistical
surveys that are being or can reasonably be expected to be undertaken.
This safeguard is reflected in subsection (4) which the Secretary
of State must have regard to when making regulations under subsection
(1)(a). The Government believes it is appropriate that scrutiny
of any regulations made under these powers should be by the affirmative
resolution procedure.
Clause 7: The Child Poverty Commission
Powers conferred on: Secretary of State
Powers exercised by: order
Parliamentary procedure: affirmative resolution
procedure
31. Clause 7 establishes the Child
Poverty Commission. Details about this body are set out in Schedule
1.
32. Subsection (4) provides that
the Secretary of State may make an order abolishing the Commission
at any point after the end of the target year. This power will
be used if the Government considers that there is no longer any
role for the Commission.
33. Subsections (5) and (6) allow
an order abolishing the Commission to include any necessary transitional
arrangements and to repeal the various provisions of the Bill
relating to the Commission, as well as any other statutory references
to this body
34. The Government believes that
because of the sensitivities involved in abolishing the Commission,
scrutiny should be subject to the affirmative resolution procedure.
Part 2: Duties of Local Authorities and other
Bodies in England
35. Part 2 makes provision requiring
cooperation at a local level to tackle child poverty. It includes
powers to make delegated legislation on the following matters:
- Clause 19: a power to amend by
order the list of bodies considered 'partner authorities' in relation
to a responsible local authority (negative resolution procedure);
and
- Clause 21: a power to make regulations
about local child poverty needs assessments (negative resolution
procedure).
36. In addition, it is intended
that in exercising their functions under this Part, responsible
local authorities and their partners should have regard to guidance
issued by the Secretary of State on the following matters:
- Clause 20: co-operating to reduce
child poverty in a local area;
- Clause 21: local child poverty
needs assessment; and
- Clause 22: preparing a joint child
poverty strategy for local area.
37. The provisions containing
powers to make delegated legislation and to issue guidance are
described in detail below.
Clause 19: Partner authorities
Powers conferred on: Secretary of State
Powers exercised by: order
Parliamentary procedure: negative resolution procedure
38. Clause 19 lists the public
bodies and persons who will be 'partner authorities' in relation
to responsible local authorities (as listed in clause 20) for
the purposes of Part 2. Respondents to the consultation for Ending
Child Poverty: Making It Happen [6]
indicated that it was important to name the key partners for a
responsible local authority in the Bill.[7]
39. 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 intention
of this power is to allow flexibility to add or remove partners
or persons with functions of a public nature, and references to
the Secretary of State's functions. This will ensure that the
legislation can be kept up to date with future changes to the
structure of delivery agencies.
40. Before exercising this order-making
power, subsection (7) requires the Secretary of State to consult
representatives of local government and any other persons he thinks
fit. With this statutory consultation requirement in place, the
Government considers it appropriate for the order to be subject
to the negative resolution procedure.
Clause 20: Co-operation to reduce child poverty
in local area
Powers conferred on: Secretary of State
Powers exercised by: power to issue guidance
41. Clause 20 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,
in order to reduce, and mitigate the effects of, child poverty
in the local authority's area. 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.
Clause 21: Local child poverty needs assessment
Powers conferred on: Secretary of State
Powers exercised by: regulations made by statutory
instrument and power to issue guidance
Parliamentary procedure: negative resolution procedure
42. 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. Because of their duty
to co-operate in the making of arrangements under clause 20(3),
partner authorities are required to co-operate with the responsible
local authority in the preparation of a local child poverty needs
assessment.
43. 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. As these
regulations are procedural the Government considers it appropriate
that they be subject to the negative resolution procedure.
44. Subsection (4) provides
a power to issue guidance, which the responsible local authority
and each of its partner authorities must have regard to when exercising
their functions under this clause.
Clause 22: Joint child poverty strategy for local
area
Powers conferred on: Secretary of State
Powers exercised by: power to issue guidance
45. 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. 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.
46. 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 the functions under this clause.
Schedule 2: Continuing effect of targets after
target year
Powers conferred on: Secretary of State
Powers exercised by: regulations made by statutory
instrument
Parliamentary procedure: affirmative resolution
procedure
47. 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 continue
to apply after the target year if they are not met in that year
or any later ('renewed') target year. Recognising the sensitivities
involved in making these regulations, the Government believes
that scrutiny should be subject to the affirmative resolution
procedure, ensuring a high level of parliamentary scrutiny.
48. Paragraph 3 imposes a duty
on the Secretary of State to make regulations about how the targets
will continue to 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.
49. Paragraph 5 provides that
regulations made under paragraph 3 may include provision conferring
or imposing functions on the Commission after the target year.
50. Paragraph 6(a) to (d) provides
that regulations made under paragraph 3(b) 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.
51. 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.
52. 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.
53. 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 date. 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.
It is intended that this regulation making power will be subject
to the affirmative resolution procedure.
54. 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 is a power to amend primary legislation
through a statutory instrument; however, it will be subject to
the affirmative resolution procedure. Meeting the absolute low
income target level by the target year will require sufficient
real terms growth in household incomes. If the necessary growth
in incomes has been secured by 2020, it may be decided that it
is not necessary to establish a new absolute low income target.
This is the rationale for including this power
55. 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.
Child Poverty Unit
January 2010
1 Ending Child Poverty: Everybody's Business,
HM Treasury, DWP, DCSF, March 2008 Back
2
Measuring Child Poverty, DWP, December 2003 Back
3
Ending Child Poverty: Making it Happen, HM Treasury, DWP,
DCSF, January 2009 Back
4
The Circumstances of Persistently Poor Children: Evidence from
the Families and Children Study, DWP Research Report 487,
2008 Back
5
Data relating to the persistent poverty target will be derived
from a new survey Understanding Society to be undertaken by the
University of Essex on behalf of the Economic and Social Research
Council. This survey will work on a similar basis to the current
survey used to measure persistent poverty, the British Household
Panel Survey, which follows the same households over a number
of years. Back
6
Ibid. Back
7
These bodies comprise some of the 'partner authorities' listed
for the purposes of Chapter 1 of Part 5 of the Local Government
and Public Involvement of Health Act 2007. Back
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