4th June 2020

Children should not bear the burden of the pandemic recession

Senior Quantitative Analyst

Boy counting money

The public health response to coronavirus has involved unprecedented restrictions on economic activity in recent months. New analysis from IPPR published today estimates that the crisis has pushed 300,000 children into poverty since the start of the pandemic.

This harsh reality, coupled with the prospect of more economic pain to come, means that action has to be taken now to protect the welfare of children.

The IPPR analysis also shows that a further 100,000 children have actually been lifted out of poverty by increases to Universal Credit since the crisis began. This shows it’s possible to bring some families out of poverty quickly, if the will is there. Nevertheless, this action has not mitigated all the effects of the crisis, as there are still an extra 200,000 children in poverty.

We should bear in mind that too many children were living in poverty and having their life chances harmed even before Covid-19. Some 4.2 million children – roughly 9 children in a typical classroom of 30 – were living below the UK’s relative poverty line in 2018/19.

Graph showing households below average income

Growing up in a low-income household doesn’t necessarily result in an unhappy childhood, but it can make life a lot harder. It can be a constant source of stress and worry for the children who experience it. In our recent survey, 21% of children listed “not having enough money” as one of their top 3 worries and 5% listed “not having enough food or clothes”. Children in poverty are more likely to miss out on celebrations, leisure activities and school trips. One 12 year old child we interviewed as part of our business plan consultation talked about how when “like you’re the only one that’s not going [on a school trip], you’ll kind of feel sad and upset… and people will be asking you are you going to and you wouldn’t be able to answer, or some people would maybe lie, but really they know they’re not going. It really hurts them”. They are more likely to enter adulthood with fewer opportunities, with our research showing that children on Free School Meals more than twice as likely as children generally to leave education without a Level 2 Qualification.

Every day we are finding out more about how living standards have fallen during lockdown. Based on a real-time survey in April, 88,000 children were in families where jobs had been lost, 1.2 million were in families where someone was furloughed and 2 million were in families where hours were reduced.

Other analysis of this data suggests that those hardest hit will be single parents, for whom average incomes have fallen over 20%.

While many parents are borrowing, applying for benefits or asking for help to cover their lower incomes, we also see poverty leading to food insecurity for children. Yesterday (June 3rd), the Trussell Trust reported an 89% increase in need for emergency food parcels in April 2020 compared to the same month last year.

To mitigate the economic damage suffered by low-income families during the crisis require urgent action. IPPR’s analysis finds that removing the two-child limit and the benefit cap along with increasing Child Benefit by £5 per week per child would take current child poverty back to its pre-crisis level. While that would be welcome, more is needed for two reasons.

Firstly, much of the economic pain is yet to come. As the recent Resolution Foundation report on Universal Credit shows, the living standards of many have been protected to some extent by the Job Retention Scheme, which will be phased out over the coming months. Furloughed workers have been receiving 80% of their pre-crisis wage, but – if they are made redundant – Universal Credit will only cover 53% of their previous earnings.

Secondly, getting us back to where we were is not enough: the pre-crisis levels of child poverty were unacceptable. We ended almost a decade of uninterrupted growth with no visible improvement in the living standards of millions of children.

So what would it take? In order to provide real financial help and protect more children from poverty, the Children’s Commissioner is calling for:

  • A £10 per child weekly uplift in child benefit to help all families during the crisis. This would help families and, crucially, those just above UC thresholds to buy food and pay utility bills immediately.
  • The suspension of the two-child limit on Universal Credit and tax credits – the cap unfairly hits larger families suddenly made workless due to the crisis.
  • The suspension of the benefit cap for families – many parents whose hours have been cut can no longer reach the earnings threshold at which they are exempted.
  • The suspension of No Recourse to Public Funds conditions to ensure all families are supported regardless of immigration status.
  • Families who find themselves in need of Universal Credit should receive their first payment straightaway, or with automatic advance payments, not in 5 weeks to prevent build-up of debts
  • The provision of free school meals during school holidays.

We have written to the Secretary of State to request data on households receiving Universal Credit to establish the scale of income-related vulnerability across England and to find out where more needs to be done to support children and families as we come out of lockdown.

As today’s IPPR report shows, more needs to be done to help families get back on their feet if we are to avoid exacerbating the already unacceptably high number of children in poverty. The last few months have shown that if the political will is there we can take on enormous challenges. These measures would be a good start.

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