Moving the goal posts won't hide the coalition's failure on child poverty

Iain Duncan Smith's plan to change the way child poverty is measured is a distraction.

The consultation on child poverty measurement announced by Iain Duncan Smith today is generating exasperated groans from those who have been engaged with the subject for decades.

It is not as if we haven’t been here before. The last extensive consultation ended in 2003 but the indicators have continued to be refined since then. The portfolio of measures that eventually became the targets in the Child Poverty Act 2010 were developed through a discussion between government and social scientists over many decades after the publication of Abel Smith and Townsend’s "rediscovery of poverty" book The Poor and the Poorest in 1965.

And the measures we now have are very good, arguably the best of any country in the world.  They encompass understandings of poverty as relative, absolute (actually constant), deprivation, overlaps of income and deprivation, and persistence. They have been adopted by international organisations such as the EU, OECD and UNICEF, and copied by other governments. Of course they are not perfect. It would be good to add an indicator of how deep poverty is (poverty gap). But do we really need a consultation to add new measures?

Without any fuss the government have already added a new severe measure of poverty – less than 50 per cent of the median and materially deprived – following the Frank Field review. The Child Poverty Strategy published in 2011 proposed a sensible list of ten indicators (additional to the five Child Poverty Act indicators) that they would use to monitor progress. Or the government could go further and revert to the list of 24 child indicators that DWP published in the Opportunity for All series between 1999 and 2007 covering poverty, health, education, housing and child protection.

There is no dearth of indicators; what we lack are policies that will continue to drive the figures downwards after a decade when 1.1 million children were lifted out of poverty. Instead, we have a consultation that is seeking to develop a "multidimensional indicator" of child poverty, relegating income – and especially the relative income measure – in the process.

Some people have never liked the relative poverty measure because it is a measure of inequality. Before Iain Duncan Smith, Conservative social security secretary John Moore, attempted to do away with it in the 1980s. Ministers now try to ridicule the relative measure because it showed a fall in child poverty in 2010-11, partly driven by a fall in median income. But that is why we have a portfolio of measures.

It is a national tragedy that after a decade of progress that has seen child poverty and child well-being improving, from a pretty low base, the coalition’s policies have sent it into reverse. Moving, adding or blending the goal posts will not hide this fact.

Jonathan Bradshaw is a Professor of Social Policy at the University of York and a trustee of the Child Poverty Action Group

Work and Pensions Secretary Iain Duncan Smith speaks at last month's Conservative conference in Birmingham. Photograph: Getty Images.
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR