Child poverty is currently costing the UK at least £29 billion a year – or £1,098 per household – new research by Loughborough University has revealed.
The estimates, made by Donald Hirsch in updating his 2008 study for the Joseph Rowntree Foundation, include costs of policy interventions required in childhood to correct for the effects of poverty, as well as the longer term cost to the economy which result from children’s reduced productivity, lower educational attainment and poorer mental and physical health. He estimates the costs to be:
• £15 billion spent on services to deal with the consequences of child poverty, such as social services, criminal justice, additional educational support
• £3.5 billion lost in tax receipts due to people leaving school with low skill levels (which has been linked to child poverty)
• £2 billion on benefits for people spending time out of work as a result of growing up in poverty
• £8.5 billion lost to individuals in net earnings (after paying tax)
Additionally, the research claims that if child poverty increases in line with predictions made by the Institute of Fiscal Studies, which looks at the impact of current government trends and policies, the cost to the country would rise to at least £35 billion every year from 2020.
Putting children's needs first in family life
Alison Garnham, chief executive of the Child Poverty Action Group, who commissioned the report, said: “We always put our children’s needs first in family life, and we should do as a nation too. This research shows that policies which increase child poverty are a false economy, costing the country as well as poor children themselves dear.
“In the last three years families with children have had to bear the brunt of the government’s austerity programme - it is no surprise that child poverty is projected to increase as a result. The spending review later this month is an opportunity to change course and prioritise families with children once again.
“We need spending plans that support rather than undermine a new child poverty reduction strategy. Policies must address low-income families’ concerns such as job creation and job security, living wages, and affordable childcare and housing.
“We know that short-changing children today will short-change the country tomorrow. This research shows that an economy balanced on increased child poverty is not a stable proposition.”
Growing up in families with inadequate resources
Donald Hirsch, who conducted the analysis, said: "However much governments try to redefine poverty or ponder new solutions, the fact remains that millions of children continue to be damaged by growing up in families with inadequate resources.
"The scale of the cost of child poverty to us all continues to dwarf the investment made so far that produced major reductions in child poverty in the last 15 years. Because the damage done by child poverty lasts for decades, such investments need to be sustained over a long period."