Late last month, Her Majesty’s Revenue and Customs (HRMC) released the latest 2011 figures showing the numbers and proportions of children in low income families.
The Children in Low-Income Families Local Measure (formerly the Revised Local Child Poverty Measure or National Indicator 116) shows the proportion of children living in families in receipt of out-of-work (means-tested) benefits or in receipt of tax credits where their reported income is less than 60 per cent of UK median income. This measure provides a broad proxy for relative low-income child poverty as set out in the Child Poverty Act 2010, and enables analysis at a local level. Statistics are published at various levels of geography providing an annual snapshot at 31 August from 2006 to 2011.
The figures suggest that there has been a fall in the number of young people living in poverty across the UK and Warwickshire in 2011.
In the UK, the proportion of children living in low-income families slightly decreased from 20.6% to 20.1%, equating to around 52,000 fewer children in low-income families in 2011 compared with 2010. The vast majority of the decrease came from a 50,000 fall in the number of children in families receiving out-of-work benefits.
The same is true across Warwickshire. In 2011, there was 505 fewer children in low income families (15,315 children) than the previous year, largely due to the reduction in the number of children in families receiving out-of-work benefits.
In a previous blog post, we’ve looked at the relative nature of this definition of child poverty. We saw incomes fall between 2009 and 2010 and as a result, so did the number of children considered to be in poverty as fewer households fell below the income threshold.
However, the latest data shows a rise in the low income threshold, from £211 in 2010 to £218 in 2011 and therefore the fall in the numbers of children in low income families in 2011 cannot be necessarily explained by the relative nature of the child poverty dataset. Fewer children in low income families is largely the result of more families moving into work and are therefore less dependent on state support.
The government recognises the limitations of this measure and has stated that it wants to look at alternative indicators. In June 2012, the work and pensions secretary proposed to deliver a new set of broader, non-income related measures of poverty. A consultation on how best to measure child poverty was conducted between November 2012 and February 2013. The consultation asked respondents a number of questions that will help the Government design a multi-dimensional measure of poverty.
In July 2013, the Child Poverty Action Group (CPAG) published estimates of the costs generated by child poverty rates in every local authority in the UK. The estimates work out the total amount of money that is ‘lost’ in local authorities due to child poverty – reflecting the extra costs to social services, cost to housing services and health care, as well as lost earnings and reduced tax receipts. The estimates show that the annual cost of child poverty in Warwickshire is approximately £134 million.
Keep an eye out for a more detailed look at Child Poverty statistics in our 2013/14 Quality of Life report, due to be released at the beginning of November!