It’s not all money, money, money

It’s not all money, money, money

27th March 2013

Governments and politicians are using the wrong metrics to measure child poverty. It’s time to widen the scope so that a true picture can be obtained. Child poverty has for years been a key battleground in British politics. But sadly this well-trodden policy path is probably better known for the rousing rhetoric attached to it rather than its eradication.

Recent prime ministers have saved some of their toughest talking for the topic. Tony Blair famously set out his historic aim to “break the cycle of disadvantage” so children born into poverty were not “condemned to social exclusion and deprivation”.

And it doesn’t seem that long ago that Gordon Brown demanded a war be waged to treat this “scar on the soul of Britain”. David Cameron has also had plenty to say about “this cruel and wasteful cycle of poverty” that “shames a nation as wealthy as ours”.

If the tragedy of poverty could have been overcome by stirring speeches, huge spending pledges and party political nonsense, the UK would be a world leader. Disastrously, however, poverty and disadvantage remains an all too common feature in communities across 21st century Britain.

One of our key problems has been a political obsession with the idea that throwing money at a problem will solve it, regardless of how entrenched its root causes may be.

When the coalition launched its consultation on the definition of poverty at the end of last year, some rounded on the government – claiming it was a ploy of the “same old Tories” to abandon the poor.

Others were a bit more generous, suggesting the government did care but that it wanted to wash its hands of a policy target it knows it will miss.

But at the Centre for Social Justice (CSJ) we take a different view. We are relieved to see that Britain’s method of measuring poverty is finally undergoing a long-overdue analysis.

Moved by the sickening levels of disadvantage that paralyse so many communities across Britain, this think-tank was set up by Iain Duncan Smith almost 10 years ago to study the causes of poverty. Travelling across the country to meet people whose lives have been torn apart by deprivation, and those working on the ground trying to alleviate it, we have become increasingly frustrated.

Visit after visit, we have seen just how badly the current definition of poverty and the way we measure it misses the root causes, and how the status quo has been an unmitigated disaster.

A narrow obsession with the current poverty metric – based largely on an income line set arbitrarily at 60 per cent of the national median – has been one of the most short-sighted policy approaches of recent years.

Of course money matters, it would be ludicrous to suggest otherwise. But the current measure presents some bizarre situations. For example, based on our narrow metric, a family can go to bed one night in poverty and wake up the following morning out of it, due to a few minor spreadsheet tweaks to welfare and tax credits made in Whitehall.

But most important of all, the measure fails to focus politicians’ attention on many of the factors that fuel the poverty we encounter. Poverty is often a symptom of deeper social issues – politicians have ignored this to the cost of our poorest communities for years.

Look just a little closer at some neighbourhoods in the UK and you will see something much deeper than physical dilapidation, as troublesome as that may be. Behind the front doors are far too many broken and chaotic families – nearly half of all children born today will experience family breakdown by the time they reach the age of 16.

There are some local schools where a culture of low expectations and high truancy rates are a catalyst for underachievement. Alcohol abuse and drug addiction flow through some housing estates like a river. People in uniform patrol the streets but they are gang members not police officers. Recorded crime is high; non-recorded crime even higher. We see this at the sharp end during the many visits we do at the CSJ.

I remember Francesca, who lives in Glasgow. One of the charities belonging to the CSJ Alliance – a collection of more than 350 excellent poverty-fighting organisations – had been helping this mother and her two young children for almost a year.

Francesca’s husband died from a brain haemorrhage three years earlier. A recovering alcoholic with a history of mental health problems, she would recall vividly how during her most troubled moments with addiction she regularly failed to look after her children. She said the children’s homework was regularly left undone, school uniforms remained unwashed for days and she gave her children little support or encouragement.

To the average person, Francesca’s children were living in poverty. To the government? No. The payments she received from her husband’s life insurance and private pensions combined with child benefit pushed her well beyond the poverty measure.

Regardless of whether Francesca’s children had warm clothes for the winter or nutritious food on the table, it was mission accomplished on the poverty front for our parliamentarians.

The main reason the current approach has failed Francesca’s children and millions of others like them, is because it focuses mainly on money. The four measures in the Child Poverty Act – relative low income, absolute low income, material deprivation and persistent poverty – are all significant, but only tell us so much.

For proof of this we simply need to look at achievement levels over the last 15 years. In 1997, some 3.4 million children lived in poverty. In 2010 this figure had dropped to 2.6 million. Although there has been some progress, this last figure was still nearly a million more than the 1.7 million target that was boldly adopted by the last government.

Between 2003 and 2010 a jaw-dropping £147 billion was spent on tax credits alone. However this achieved just a one percentage point reduction in the proportion of children living in poverty, according to the measure. Do we honestly believe that was the best way to use that money to help those children?

I would argue, given the track record, we need to find a much better way of targeting child poverty. In fact, veteran Labour MP and parliamentary giant Frank Field could not have summed up the failure of the  current system better. He wrote that a consequence of the Child Poverty Act has been to “straightjacket our understanding of poverty to one particular financial manifestation”.

We have always been clear: income matters and we need to measure it. The Centre for Social Justice has never argued that we should drop or replace the income measure. And it is clear from the ongoing consultation, speeches and interviews – despite some of the rhetoric flying around from different organisations – that nobody in government is contemplating dropping the income measure either.

However, in our paper Rethinking Child Poverty, published last year, we highlighted that if politicians were committed to dealing with educational inequality, building resilient families and helping people dependent on benefits become self-reliant, we could start a credible assault on the root causes of poverty in order to prevent it.

In terms of the family context we should look at stability, parenting, parental mental health and skills. We need to see the government using indicators focused on school readiness, low birth weight and teenage pregnancies.

We should measure levels of work and worklessness that children grow up with. It’s vital to look at whether a child attends a failing school or truants. Can we measure which children are growing up in areas of high deprivation and poor housing?

The magnitude of the task ahead is huge, but the rewards would be transformational. If a sensible and much more intelligent measure of poverty can be agreed – one that focused the Whitehall machine on the things that prevent and reduce poverty – it would be one of the most important things any British government has achieved in generations. Think of what could be changed in children’s lives if this and future governments became fully focused on dismantling the root causes of poverty.

Busting the myth that poverty is tackled solely by chasing a mainly income inequality line is a major task for the 21st century. If the government seizes this opportunity we might just get there

This article first appeared in the 22-28th March edition of the New Statesman