CHILDREN OF AUSTERITY
Thanks to the UNICEF Office for Research a book has been
published (April 13 2017) tracing what happened to children in rich countries
following the financial crisis:
Cantillon, B, Chzhen,
Y, Handa, S. and B Nolan (2017) Children
of Austerity: Impact of the Great Recession on Child Poverty in Rich Countries.
Oxford: OUP.
Chapter Nine is by Jonathan
Bradshaw, Yekaterina Chzhen and Gill Main on ‘The impact of the recession on
children in the UK’.
The chapter was
inevitably written some time ago. While the conclusion of the chapter still
holds this BLOG updates some of the
data.
The deep recession of
2008–09 did not immediately translate into a rise in child poverty rates.
Relative child poverty, based on 60 per cent of contemporary national median
income, continued falling between 2007 and 2013. This is in part the result of
median incomes—and therefore the poverty thresholds—falling during this period.
However, the fiscal stimulus in place at that time cushioned the impact of the
economic crisis on households with children. Now (see Figure 1) in the last two years for which we have data the
relative child poverty rate has begun to rise both before and after housing
costs.
Figure 1: Child Poverty rates <60% contemporary
median before and after housing costs
The main reasons for
this increase in child poverty have been and will continue to be the cuts in
in-work benefits. In particular
·
The freezing of the
level of most working age benefits until 2020.
·
The limits of child tax
credits and universal credits (starting this month) to two children only and
the many cuts that have undermined universal credit (See CPAG’s
Broken promises.)
·
Cuts in support for
housing costs, particularly the bedroom tax and local rent limits.
These have to be set
against an improvement in employment such that 67% of children in poverty in
the UK now have a parent in employment. The introduction of the increased
minimum wage though welcome has not and will not mitigate the cuts in benefits
for families with children. As universal credit replaces tax credits it will
further reduce the incomes of families with children – especially low income
families.
By the mid-1980s the UK
had one of the highest child poverty rates in all rich countries. After 1997 it
managed to reduce child poverty using employment policies but particularly cash
benefits. When the crisis struck in 2008 the Labour Government responded with
policies designed to protect families with children. But the Coalition after
2010 adopted austerity measures which especially harmed families with children.
Now the Conservative Government since 2015 is reinforcing these measures with a
further £12 billion cuts in working age benefits.
The 2010 Child Poverty
Act targets have been abandoned and we are no longer on course to achieve any
of them (see Figure 2). The UK is set to slide down the international league
table. Now the Institute
for Fiscal Studies expects relative child
poverty to increase from 18.8% in 2014/15 to 26.6% in 2021/22 before housing
costs and from 29.0% to 35.7% after housing costs.
Figure 2: Child Poverty
Act 2010 targets. Dotted lines show trend needed to meet targets.
The decline in real earnings during the recession and
subsequent austerity period was combined with an increase in the cost of
necessities. So it is important to monitor deprivation as well as income. Table
1 shows the proportion of children lacking necessities, and Table 2 the
proportion of adults living in families with children lacking necessities, in
2007/08 compared to 2015/16. Items are counted as lacking if parents report
that children do not have the item because the household cannot afford it
(answer options include: children have it; lack it because the parents cannot
afford it; or lack it for another reason). Table 1 shows that the proportion of
children lacking items has fallen or unchanged in most cases, except a holiday
away from home. The same is true in Table 2 except that parents were more
likely to lack holidays away from home and insurance for the content of their
dwellings. In general what is striking is the lack of any real improvement in
living standards over this eight year period.
Table
1: Children Lacking Necessities in 2007/08 and
2015/16
Item
|
2007/08
|
2015/16
|
%
|
%
|
|
Outdoor
space or facilities nearby where they can play safely
|
14
|
7
|
Enough
bedrooms for every child over 10 of different sex to have his or her own
bedroom
|
16
|
14
|
Celebrations
on special occasions such as birthdays, Christmas or other religious
festivals
|
4
|
2
|
Leisure
equipment (for example, sports equipment or a bicycle)
|
7
|
6
|
A holiday
away from home at least one week a year with his or her family
|
31
|
34
|
A hobby or leisure
activity
|
6
|
6
|
Friends
round for tea or a snack once a fortnight
|
7
|
7
|
Going on a
school trip at least once a term for school-aged children
|
5
|
4
|
Play
group/nursery/toddler group at least once a week for children of pre-school
age
|
8
|
4
|
Sources: Table 4.7
and
Table
2: Adults in Families with Children Lacking
Necessities in 2007/08 and 2015/16
Item
|
2007/08
|
2015/16
|
%
|
%
|
|
Enough money to keep your home in a decent
state of repair
|
19
|
18
|
A holiday away from home for one week a
year, not staying with relatives
|
38
|
41
|
Insurance of contents of dwelling
|
19
|
22
|
Regular savings (of £10 a month) for rainy
days or retirement
|
40
|
38
|
Replace any worn-out furniture
|
30
|
30
|
Replace or repair broken electrical goods
such as refrigerator or washing machine
|
22
|
21
|
A small amount of money to spend each week
on yourself, not on your family
|
33
|
32
|
Keep house warm
|
9
|
9
|
Sources: Table 4.8
and
