Failing Child Poverty Strategy Needs Revamp

18/10/2013 11:50 BST | Updated 18/12/2013 10:12 GMT

We have waited a long time for it, so it's good to see the Social Mobility and Child Poverty Commission publish its first progress report today. Mandated to assess how the government is doing in reducing child poverty and increasing social mobility, the report aims to provide a 'state of the nation' account of how the UK fairs.

So what's the verdict? Well, the Commission tells us what we have known for a long time: that the UK is not on track to meet its statutory goal of ending child poverty, and that things look set to move in the wrong direction over the next few years. They go on to provide an account of why, after sustained and dramatic falls in child poverty over the last decade and a half, Britain has now gone into reverse.

The operating environment has been far from propitious of course. Non-existent or sluggish growth, the need to address the budget deficit, declining real wages - all have conspired to reduce living standards across the board. However, as the report makes clear, this is not in itself a recipe for rising poverty rates: witness the way that pensioners have rightly and successfully been protected in recent years by a deliberate choice to maintain the real value of the basic state pension.

Much of the coverage today has focused on the seeming inter-generational injustice of this decision, comparing it with the way that family benefits have been slashed left, right and centre over the course of this parliament. As Nick Clegg notes, punishing pensioners won't help a single child achieve more in life. The report shouldn't urge us to cut pensioner benefits, but instead to find an equally stable settlement for children's benefits that provides genuine protection against poverty in the long term.

The report also provides a compelling account of the rising phenomenon of in-work poverty. Despite the oft-quoted mantra that 'work always pays', it clearly doesn't pay enough. Two-thirds of children living in poverty now have at least one working parent, and these parents are working hard. Marshalling evidence from the Institute for Fiscal Studies, the Commission usefully lays to rest the claim that working parents are poor because they don't work enough: it turns out that low pay, and not low hours, is very much at the heart of in-work poverty.

Given this, it's great to see the Commission wholeheartedly recommending that the national minimum wage be increased. But beyond this, the report is short on advice about what the government should actually do to address in-work poverty. The living wage is clearly regarded as a 'good thing', the prevalence of temporary contracts, sporadic hours and pockets of regional unemployment as 'bad', but there is no clear programme of action advanced. Instead, a diffuse responsibility on all of us is identified, with employers apparently expected to embrace their social duty to pay decent wages without any further ado.

With Commissioners from various political persuasions, the report is clearly a delicate balancing act. As a result, it sometimes achieves even-handedness at the expense of clarity, or indeed sometimes good sense. It documents, for example, the staggering scale of the cuts - 17 per cent of spending on working-age social security benefits cut in four years - but then suggests that the impoverishment this will inevitably cause might be offset by its 'dynamic effects' as more parents are incentivised to work.

That said, the Commission does point out that the government's flagship programme, universal credit, may need further refinement before its poverty reduction potential is maximised. Addressing the weak incentives for second earners to work is crucial, as is a proper level of childcare support. In the week that the government's consultation on tax-free childcare closes, the report's clear call that all families in receipt of universal credit should receive support with 85 per cent of their costs is very welcome.

Finally, perhaps one of the report's most useful recommendations is not a policy idea but a procedural request: that in the future the Office for Budget Responsibility be given a new role of independently evaluating budgets for their child poverty and social mobility impacts. With a government that seems determined to wriggle off the hook that is the Child Poverty Act 2010, failing not just to account against the indicators contained in the Act but recently attempting to shift the goalposts too, another independent body assessing the effects of government decisions on child poverty can only be a good thing.