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The new UK child poverty measure

The new UK child poverty measure. A historic pledge. March 1999 - PM pledged to eradicate child poverty September 1999 - launched Opportunity for all annual report and indicators SR2000 - set HMT/DWP ‘child poverty’ PSA target. Poverty is multifaceted.

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The new UK child poverty measure

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  1. The new UK child poverty measure

  2. A historic pledge... • March 1999 - PM pledged to eradicate child poverty • September 1999 - launched Opportunity for all annual report and indicators • SR2000 - set HMT/DWP ‘child poverty’ PSA target

  3. Poverty is multifaceted • Complex – Opportunity for all tracks lots of indicators, from teen pregnancy to educational failure • 17 children indicators – low income, health, education, employment, housing Since baseline (mostly 97/98): • 12 moving in the right direction • 4 broadly constant • 5 insufficient data as yet to determine trend

  4. How we currently monitor progress • Multi-dimensional approach • Opportunity for all indicators • reviewed annually • 20 child indicators • 5 headline indicators (low income, worklessness, education, health inequalities, housing) • Public Service Agreement targets

  5. Why did we consult? • No definition of eradication or long-term measure • Current low income PSA target is only for the short-term – 2004/5 • Need to build consensus for any new measure • OFA indicators good, but in absence of clear headline measurerelative income receives most attention

  6. One clear headline indicator Broad range of indicators CLARITY COMPREHENSIVENESS The challenge we face

  7. Need the best measure • So that definitions of poverty resonate with people’s understanding of poverty • To target and monitor effective policies

  8. Four options Four options set out in consultation document: • Multi-dimensional headline indicators • Child poverty index • Consistent poverty (combining relative low income and material deprivation) • Tiered approach (core set of low income and ‘consistent poverty’ indicators)

  9. Preliminary Conclusions (1) • Preliminary conclusions published May 2003 • No consensus on best measure, but acceptance of problems with all measures • Most agreed income central, but not sole measure • Strong support for tiered approach, material deprivation and OFA indicators

  10. Preliminary Conclusions (2) • Rule out at this stage: • Child poverty index (combining health, income etc) • Little support; difficult interpretation of measure and progress • Using a ‘consistent poverty’ approach (income and material deprivation) as a sole measure • Not tested in long-term • FACS analysis

  11. Next Steps - programme of analysis Programme of work – in-house and external analysis; technical experts group • Tiered approach - appropriate components (income measures; deprivation; multi-dimensional indicators) • Material deprivation - appropriate indicators to include in FRS; how to update measures overtime; persistent low income and deprivation • Multi-dimensional indicators – review indicators - do they reflect people’s views?

  12. The new long-term measure • New measure announced in December 2003 • Tiered approach: • Absolute low income 60% median h/hold income fixed at 98/99 level adjusted for inflation • Relative low income 60% median h/hold income • Material deprivation and relative low income combined both materially deprived and below 70% median h/hold income

  13. Child Poverty Targets • PSA 2004 – Tiered approach • reduce child poverty by half by 2010 • Absolute and Relative low income • Both with a 1998/99 baseline • Additional target in 2006 – halving of child poverty based on 70% and material deprivation combined • With a baseline of 2006

  14. Developing the material deprivation measure • Family Resources Survey • Data available in 2006 • Preliminary scoping work • Families and Children Study (FACS) • 6-month Family Resources Survey

  15. FACS Preliminary Analysis

  16. FACS Analysis – Preliminary results

  17. Simple count approach Weighted approach CLARITY COMPREHENSIVENESS The challenge we face

  18. Future decisions • Simple count vs Weighted approaches • Threshold setting • Frequency of recalibration/uprating • Modelling material deprivation

  19. Contacts and further information Child poverty measurement: daphne.white@dwp.gsi.gov.uk Consultation documents: www.dwp.gov.uk/consultations/consultations2002 www.dwp.gov.uk/consultations/consult/2003/childpov/index.htm www.dwp.gov.uk/consultations/consult/2003/childpov/final.asp Opportunity for all: www.dwp.gov.uk/ofa Research papers: Berthoud et al, 2004, The dynamics of deprivation: the relationship between income and material deprivation over time, DWP research report 219 McKay and Collard, 2004, Developing deprivation questions for the Family Resources Survey, DWP Working Paper Number 13

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