Response to government's Child Poverty Strategy

CORRECTION: the comparison between child poverty rates at the end of the parliament and in 2010-11 has been removed

Responding to the launch of the government's Child Poverty Strategy, Tom Wernham, a Senior Research Economist at the IFS, said: 

“The government has not set an explicit numerical target for child poverty, beyond stating that it wants child poverty to fall. The policies included in the poverty strategy are expected to reduce child relative income poverty (after housing costs) by around 550,000  at the end of this parliament. 450,000 of this fall results from the reversal of the two-child limit announced at the Budget. Expansion of free school meals to all children in families on universal credit drives the rest of the fall in the headline poverty measure.”

Further information

• Other announcements, on upfront childcare support for universal credit recipients, temporary accommodation, and formula milk, represent a focus on aspects of hardship that go beyond income, but are targeted at much smaller groups of people.  Announcements on formula milk will only benefit families if efforts to shift them towards cheaper brands are successful. There is no new cash for families here, and allowing vouchers and loyalty cards to be used for formula milk will not make even the poorest parents better off if those vouchers and points would otherwise have been spent on other goods.
• There is considerable uncertainty over how large a reduction in measured poverty these policies will ultimately deliver, partly due to genuine economic uncertainty, but also due to concerns on the quality of the survey-based poverty measures used by government. The projected reductions in child poverty, if realised, are large enough that they should be detectable in the survey data, but lower-quality data will make it harder to assess precisely how large any reduction has been. Policies aimed at the very deprived families in temporary accommodation will not show up in standard poverty and deprivation statistics at all, because those families are typically missing from the surveys used.
• Alongside income poverty, the government will start targeting reductions in “deep material poverty”, based on the share of households lacking certain essential items. That is a useful complement to income-based measures of poverty, and should help in assessing the impact of policies that target costs or cashflow as well as income. Rates of food insecurity, arrears on bills, and numbers of families unable to heat their homes have all increased since 2019–20, even as the rate of income poverty has stabilised.