Government's anti-poverty strategy needs major rethink, according to comprehensive new analysis

The Government’s strategy against poverty and social exclusion, pursued since the late 1990s, has lost momentum and is in urgent need of a major rethink. This is the conclusion of the authors of the tenth annual Monitoring poverty and social exclusion report from the New Policy Institute, published by the Joseph Rowntree Foundation since 1998.

Covering 50 indicators of poverty and social exclusion, the report records a worsening in the last year in nine of them, mainly in the key areas of income and work. These have been offset by improvements in seven, chiefly to do with primary education, premature death and homelessness.

The most serious setback is the increase of 200,000 children living in poverty in 2005/06 (3.8 million children) compared to the year before. As a result, there has been no sustained progress on child poverty in three years.

The number of children living in poverty has fallen by 600,000 since the Government made its pledge to end child poverty in 1999. But this still leaves the Government 500,000 short of the target it should have reached in 2004/05.

Although tax credits now take around a million children a year out of poverty, the number of children living in working families who need tax credits to escape poverty is rising. Half of all children in poverty are in working families – this is similar to a decade ago. Low wages therefore continue to be an issue.

Summing up, report co-author Peter Kenway said: “Progress on child poverty has stalled at a level that is only half-way to the target set for two years ago. Tax credits may be working, but they are not enough on their own. Yet the Government’s budgetary and legislative programme set out this autumn contains no substantial new ideas about what should be done.”

Some of the key findings that indicate the need for a new approach are:

  • the 1.5 million children in poverty in England and Wales belonging to families paying full Council Tax;
  • the importance of in-work poverty with the largest, direct employer of low-paid workers aged 25 or over now being the public sector, accounting for more than a quarter of all such low-paid employees;
  • the rising unemployment rate among the under 25s, up to nearly 12% in 2006, three times the rate for older adults;
  • the ever-falling value of social security benefits for working-age adults compared with earnings, now 20% lower than in 1997;
  • despite being identified by Government as a priority in the late 1990s, the lack of any progress in extending home contents insurance to the half of poorest households who lack it.

On a more positive note, its findings on differences in poverty rates between men and women point to areas where Government policy has had some success. Although more women (some five million, or 20%) than men (some four million, or 18%) belong to households in poverty, the gap of two percentage points between the two poverty rates is half what it was in the mid-1990s. The fall between then and now reflects the decline in the poverty rates for two kinds of single adult households in which women are predominant, namely single pensioners (down from nearly 40% in the mid-1990s to 20%) and lone parents (down from 60% to 50%).

Report co-author Tom MacInnes added: “With lone parents under the age of 25 accounting for just one in five of all lone parents in poverty, the stereotypical image of a young, even teenage, lone parent, is seriously misleading. Most lone parents in poverty are aged 25 or over, and there are, in fact, as many over 40 as there are under 25.”