Cost of child poverty reaches £29 billion

The total financial cost to society of child poverty has risen from £25 billion a year in 2008 to £29 billion in 2013, says an updated analysis for the Child Poverty Action Group. The analysis takes into account a range of factors such as extra spending on services and lost tax receipts.

The new analysis accompanies a report examining the impact of the coalition's welfare reforms on local authorities – including the costs to local areas of child poverty – and exploring how they and partner organizations are coping with the impact of the reforms.

Key points

  • The full national costs of child poverty are made up of: £15 billion spent on services to deal with the consequences of child poverty; £3½ billion lost in tax receipts from people earning less as a result of having grown up in poverty; £2 billion spent on benefits for people spending more time out of work as a result of having grown up in poverty; and £8½ billion lost to individuals in net earnings (after paying tax).
  • The local authorities with the largest annual economic costs generated by child poverty are: Birmingham (£914 million a year); Manchester (£446 million); Glasgow (£395 million); Bradford (£360 million); and Leeds (£340 million).
  • There are 42 separate measures introduced by the coalition since 2010 that are having an impact on child poverty, with the vast majority making things worse rather than better. They include the household benefit cap, the freezing of child benefit for three years and the 'bedroom tax' for social tenants receiving housing benefit.

Local authorities consulted for the research listed a series of key messages for central government. These include: the need to monitor local child poverty strategies; the need for an independent review of welfare reforms, to ensure the impact on families is not more extensive than predicted; and the need for funding for advice agencies to ensure local authorities can support affected families.

: Rys Farthing, Local Authorities and Child Poverty: Balancing Threats and Opportunities, Child Poverty Action Group | Donald Hirsch, An Estimate of the Cost of Child Poverty in 2013, Child Poverty Action Group
LinksReport | Analysis | CPAG press release | BBC report

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