01/12/2003

£1bn needed to ensure child poverty goal is met

Around £1 billion more might need to be spent for the government to meet its target to reduce child poverty to 3.1 million by 2004-05, according to a leading think-tank.

A report by the Institute for Fiscal Studies has suggested that any increases to means-tested benefits and tax credits intended to help meet the target need to take effect in April 2004, and therefore need to be announced in the forthcoming Pre-Budget Report.

The government has a target for child poverty to fall to 3.1 million by 2004-05, measured by the number of children in households with less than 60% median income after housing costs.

The latest data from the group shows that 3.8 million children were in poverty in 2001-02 on this definition, or 30% of children in Britain. New simulations by the Institute for Fiscal Studies suggest that on current policies and commitments, the government will narrowly miss its target, with child poverty projected to reach 3.3 million in 2004-05.

The report calls for: an increase of £3 per week in the per child element of the child tax credit which could cost £1 billion; other changes, such as a new child tax credit premium for families with three or more children.

The government is due to announce a new measure of child poverty later this year which it will target in the longer-term.

If it wishes to reduce further child poverty measured under the current definition, then spending on means-tested benefits and tax credits received by poor families with children would need to continue to rise in real terms in the absence of helpful economic or demographic changes, the report claimed.

(gmcg)

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