A new report published from a major International Economic Think Tank, the OECD had good and bad news on Child Poverty in the UK as the Financial Times reports.
‘A decade’s investment in reducing child poverty in the UK looks set to be undone, the Organisation for Economic Cooperation and Development warned last Wednesday (27th April).
In its first ever report on family well being in more than 30 countries, the Paris- based think tank said that before the financial crisis child poverty in the UK fell by more than in any other OECD country.
A period of sustained investment between 1995 to 2005 saw the proportion of children living in a household with less than half the median incomes – the OECD’s definition of poverty – drop from 17.4 per cent to 10.5 per cent, below the OECD average of 12.7 per cent.
Over the same period, thanks in part to higher benefit rates, welfare-to-work programmes and more employment, the growth in average family incomes was the third highest in the OECD.
However, “progress in child poverty reduction in the UK has stalled and is now predicted to increase,” the think tank said, adding that social protection spending on families itself “needs to be protected”.
Between 2003 and 2007 the UK became one of the biggest investors in families in the OECD, the report says. Early years spending rose substantially, driven by new cash supports for children around birth and increased investment in child care.
Today, however, “spending cuts, such as cutting benefits for pregnancy and childbirth, and a freeze on child cash benefits, will affect many families”.
Cutting back on early years services will make it difficult for the UK to achieve its policy of making work pay for all, the think tank said. And providing services such as affordable and good quality local day-care centres, with flexible opening hours, is key to helping families with children on low incomes into work.
Under moves to eliminate the deficit, the budget of many Sure Start centres which provide such services are being cut, with the coalition saying it wants such services focused on the most disadvantaged.
The coalition’s plans to extend 15 hours of free early education to disadvantaged children as young as two is a positive step, the think tank said. But childcare costs remain a barrier to work for parents higher up the income scale and “there is room in UK policy for an effective childcare supplement for working parents”.
After accounting for child care, over two-thirds of a typical second earner’s income is effectively taxed away, the report says. With 68 per cent of income typically going on childcare, that is comfortably ahead of the OECD average of 52 per cent.
Moreover, entering work does not guarantee that children in a low income family will be free of poverty – indeed, in-work child poverty has been growing recently.
The report shows that poverty in households with children is rising in nearly all OECD countries and these days children are more likely than pensioners to be poor.
In some countries, including the US, one in five children now live in poverty.
Work forms a crucial part of tackling that, Angel Gurria, the OECD secretary general said, and “family benefits need to be well designed to maintain work incentives”. But benefits must also protect the most vulnerable, “otherwise we risk creating high, long-term social costs for future generations”.Any source
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