Budget fails to invest enough money to meet child poverty target

The government has only invested a third of the estimated £3.4bn a year needed to halve child poverty by 2010 in today’s budget.

Annual spending on child benefit and child tax credits will increase by £765m in 2009 and £950m in 2010. Also child benefit will be disregarded for council tax and housing benefit claims.

The additional funds will lift a further 250,000 children out of poverty by 2010, however it will miss the 2010 target by at least 450,000 children. As of 2005-6, 2.8 million children live in poverty (before housing costs).

The Institute for Fiscal Studies estimates that the government needed to invest an additional £3.4bn a year in child tax credits if it is to meet the 2010 target. 

Speaking today in his first budget speech, chancellor Alistair Darling announced that working families, with one child, on housing and council tax benefits would receive an additional £17 a week from October 2009.

From April 2009, child benefit for the first child will increase to £20 a week and the child element, which focuses on supporting the poorest families, of the child tax credit will increase by £50 a year above inflation for families on low and middle incomes.

The government will also invest a further £125m over the coming three years to support the most vulnerable families.

Darling said: “We want to demonstrate our commitment to supporting parents, through a contract in which government undertakes to provide the support that families need to move into work and the other side of this contract we look to families to make a commitment to improve their situations where they can.”

In addition, the chancellor announced that it will take “further action” to tackle fuel poverty by working with energy companies to raise the amount spent on social tariffs from £50m to up to £150m a year.

Darling added that the government will work with energy companies to take further action on a voluntary and statutory basis and will legislate when it is necessary to do so. 

Older people will also receive higher winter fuel payments from this year onwards, with allowances for the over-60s increasing from £200 to £250 and for the over-80s from £300 to £400.

More information

The Social Work Blog: The millions fall well short

Charities call for £4bn investment to keep child poverty pledge

Budget information

Budget: The reactions