Nearly 1 in 5 children who are living materially deprived lives – 2.3 million in total – are excluded from the government's headline measure of relative income poverty, according to a report from the Policy Exchange think tank. This, it says, is despite the £170 billion spent between 2003 and 2010 on financial support for the poorest households with children.

Key points

• The existing measure of child poverty does not take into account factors with severe impacts on the quality of children’s lives. Although income is important, it does not reflect wider indicators of child poverty such as quality of housing, and standard of education achieved.
• Politicians are being forced by the child poverty measure to focus on short-term income redistribution, rather than trying to help and support parents into employment or higher-wage jobs.
• The uplifting of 'hand outs' to hit the poverty target favours workless households over working households. Child tax credit rose by 63 per cent between 2003-04 and 2012-13, whereas working tax credit rose by just 28 per cent.
• The child poverty measure fails to adjust for the difference in the cost of living across the UK. In London and the south west there are lower levels of child poverty than the national average: but when wider issues are taken into account, the level of poverty rises significantly above places such as the west midlands and Wales.
• A new statutory measure is needed that takes into account 'social poverty' as well as household income. 'Social poverty' includes factors such as whether: a child is themself a parent; the quality of housing is poor; a family has unsustainable debts; a child has been taken into care in their lifetime; a child or their parents have had criminal convictions; and/or a child has low educational attainment.

Source: Matthew Oakley and Matthew Tinsley, Outcomes, Not Just Incomes: Improving Britain's Understanding and Measurement of Child Poverty, Policy Exchange
Links: Report | Policy Exchange press release | Guardian report | Public Finance report