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Limits of work and benefits strategy

Tackling worsening child poverty and inequality will require more than a revamped department, argues Kate Green

The creation of the Department for Children, Schools and Families (DCSF), with Ed Balls at its head, is good news for children. In the wake of the Unicef report published in February that showed Britain 21st out of 21 developed countries on an overall measure of child wellbeing, a department so clearly focussed on our children and their families, and led by one of the most important Ministers in Gordon Brown's government, offers a real opportunity to rethink society with children centre-stage.

Writing in Child Poverty Action Group's Poverty journal earlier this summer, journalist Polly Toynbee began to imagine what such a society would be like. Children would lie at the heart of all public services: transport, employment, leisure, sport. There would be safe beautiful streets for them to play in, and adults everywhere, bus conductors, parkkeepers, neighbours, to keep an eye out. If we design our world around our children, Toynbee argued, we'll have a society in which everyone would rather live.

Vision

Now Balls has a chance to make that vision come true. But he will have to do more than create beautiful places and experiences. The much tougher – but vital – task is to tackle the exceptionally high levels of poverty and inequality which scar the lives of Britain's children, and which underlie our scandalously poor performance in the Unicef report. It's good that child poverty is explicitly listed as one of Balls's ministerial responsibilities. But the bold and ambitious target, to halve relative income poverty by 2010, and eradicate it by 2020, requires measures to be taken that lie within the gift of other government departments, not just with the DCSF, and Balls will have to persuade his Ministerial colleagues to take the action needed, even when it cuts across their own departmental goals. Worse, the Government has already fallen behind in its progress towards meeting the child poverty targets – following six consecutive years of progress, the latest figures, for 2005-06, show child poverty actually worsening, with 30% of our children now growing up poor. The scale of the challenge cannot be underestimated, and the policies currently in place fall well short.

What must Balls do to get progress back on track? First, and most important, he must reiterate the Government's determination that the target can, must and will be met. Already a sense of defeatism can be detected, that the target is ‘too difficult', ‘unrealistic', that relative poverty cannot be eradicated. All this is nonsense. The countries which did best in the Unicef report unsurprisingly had some of the lowest rates of child poverty: as low as 5 or 7%. If Nordic countries can reach these levels, there is no reason why we cannot do so too.

Too often it's argued that there isn't ‘really' any poverty in Britain - but the pitiful incomes of so many families reliant on tax credits and so-called safety net benefits to make ends meet give the lie to such a claim. In recent work for Save the Children, Monica Magadi and Sue Middleton suggest that the mean income for a couple with one child in ‘non-severe' poverty and experiencing some deprivation is just £199 a week - less than £10 per person per day to pay bills, buy food and clothes, repair items when they're broken, pay bus fares, get your hair cut, buy presents for the kids' birthdays, take them for a swim - hardly items that most of us would regard as ‘luxuries' , but which for families in poverty represent a constant and wearing struggle just to make ends meet.

Damage

Labour has long recognised the damage such poverty causes, and over the past decade has taken steps to raise family incomes which have met with some success. Today 600,000 fewer children grow up poor than in 1999. This has been brought about by a twin track approach: increasing family incomes though direct financial support, mostly by way of tax credits, and increasing parental employment – Ministers have long argued that the best route out of poverty for most families is for parents to be in paid work.

But the latest figures show the strategy isn't proving sufficient. Not enough has been invested in it, nor is it bold enough. So Balls must take on the assumptions that underpin it, and press his Ministerial colleagues in the Treasury, HM Revenue and Customs and the Department for Work and Pensions to rethink what they do.

First he should demand that benefits and tax credits are raised to a level sufficient to lift families above the poverty line. The Institute for Fiscal Studies has suggested that to have an even chance of reaching the 2010 target requires an investment of around £4billion – not an insignificant sum, but modest when set against the cost, the waste of potential, the damage to their lives and wellbeing, of allowing another generation of children to grow up poor. Whilst tax credits have helped to lift families out of poverty, and the commitment to uprate child tax credit in line with earnings over the remainder of this parliament is welcome, the problems with tax credits administration and lower take-up which has resulted, suggest that investment in other benefits would be more effective in maximising family incomes. In particular, a substantial investment in universal child benefit could lift 250,000 children out of poverty, and increases in shamefully neglected adult benefits, which of course underpin family incomes, are urgently needed too.

Adequate financial support for families is a prerequisite for reducing and ultimately eradicating child poverty, but it's a prerequisite too for Ministers' preferred method for tacking poverty – increasing the number of parents in paid work. Families who have nothing to fall back on, who are battling to get by, cannot take the risk of coming off benefits, particularly if the alternative is to take poorly paid and unsustainable jobs which they struggle to combine with the responsibilities of parenting and family life.

Careful balance

As Minister for children and for families, Balls must be especially aware of the careful balance to be struck in moving more and more parents into paid work. Of course good quality work where parents enjoy decent pay, conditions and prospects can lift children out of poverty, and reduces the risk that they too will be out of work as adults and that their children in turn grow up poor. But for many families, work does not provide a route out of poverty. Work that is unsustainable, inadequately paid, and where inflexible employers require parents to take employment at times when they can't get childcare and grudge time off to deal with family emergencies will not help reduce child poverty – indeed the evidence is that children whose parents desperately cycle in and out of such employment are even more likely to grow up poor.

Balls needs to have strong words with his colleague Peter Hain at the Department for Work and Pensions who is arguing now for a requirement on lone parents whose youngest child is just 7 years old to be required to be available for work. If work really is to be the route out of poverty, the Government's strategy must be to play a much longer game. Investment in adult skills so the parents can obtain good quality jobs that pay enough to lift their children out of poverty are essential – yet as the recent Leitch report on skills has demonstrated, with one third of all adults not even having the equivalent of a basic school leaving certificate, there is still a long way to go. Proposals now to upskill the working age population are welcome – but it's a pity nobody in the new Department for Innovation, Universities and Skills seems to have given much thought yet to the special needs of parents to enable them to study and care for their children – again Balls needs to have a word.

2020 target

Finally, let's not forget the other arm of Balls's new department: his responsibility for education and schools. For if meeting the 2010 target is all about maximising family incomes in the short term, achievement of the 2020 target will need a wider approach. In recent years, a relentless focus on school standards has improved performance for many – but still the poorest children remain resolutely left behind. It's clear that no amount of attention to what goes on in schools can wholly compensate for the damaging effects that poverty has on children's education, the way in which lack of money excludes them from participating fully in their schooling, from trips, extra-curricular activities, and one-to-one coaching when needed, and limits the learning that children undergo out of school.

Reputation

There is then much for Balls to get to grips with, much of it outside his own department: his influence as much as his actions is what will count. With his reputation as Brown's right-hand man, and a perception that he has effectively been handed lead responsibility in government for all important domestic policy, expectations that the government really will deliver on child poverty have never been higher. Campaigners, families and children are now watching to see that a Brown government and Balls personally are serious about ending child poverty for good.