Defining the eradication of child poverty in the Child Poverty Bill

1. Defining the eradication of child poverty in the Child Poverty Bill Danielle Mason and Natalie Abbott Presentation at DCSF Conference: The Use of Evidence in Policy Development and Delivery, 9 February 2010

2. Introduction • Measuring Child Poverty • The Story of the Bill • Lessons Learned

3. Introduction

4. “Being poor should not be a life sentence. We need to sow the seeds of ambition in the young. Our historic aim will be for ours to be the first generation to end child poverty, and it will take a generation. It is a 20 year mission but I believe it can be done.” Tony Blair, 1999 Beveridge Lecture

5. The Child Poverty Unit • Established in 2007 • Joint unit across Department for Work and Pensions, Department for Children Schools and Families and HM Treasury • Intended to improve cross-government work towards the target to halve child poverty by 2010 and eradicate it by 2020 • Tasked with delivery of the Child Poverty Bill

6. The Child Poverty Bill • The Bill enshrines in legislation the Government's commitment to eradicating child poverty within a generation • It sets legislative targets for child poverty levels which must be met by 2020 • This means that the Bill must define how child poverty levels are to be measured • The Government uses survey statistics to measure child poverty

7. The central challenge… …has been to find legal language and instruments which enable us to define in law the survey and analysis methods used to create child poverty statistics

8. Task 1!Defining measurements in law Which words and phrases in this clause need further definition to make the legislation robust?

9. Measuring child poverty

10. So, how do we measure child poverty? • DWP’s 2003 consultation ‘Measuring Child Poverty’ examined how child poverty should be defined and monitored by government. • DWP concluded that the following three measures were needed to provide a rounded definition of child poverty: • Relative low-income • Absolute low-income • Material deprivation and low-income • In addition, DWP report annually on rates of persistent low-income for children

11. Relative low income The measure Why it is important The indicator: Children in households with an income below 60% of contemporary median income before housing costs. What it measures: It captures whether the incomes of the poorest families keep pace with the rest of society. What survey we use: Family Resources Survey. Low income is the most commonly used measure of poverty, as it provides a broad indication of the living standards of families. Evidence suggests low income, in and of itself, impacts on life chances. When children fall too far behind the typical family, not able to take a full part in the activities that social inclusion demands.

12. Absolute low income The measure Why it is important The indicator: Children in households with an income below 60% of 1998/99 median income before housing costs (up-rated in line with inflation). What it measures: Captures whether low income families see their real incomes increase over time. What survey we use: Family Resources Survey. It tells us what is happening to real incomes – whether the incomes of the poorest are rising in absolute terms, not just in comparison to the incomes of typical families. It can be used as a ‘yardstick’ by which to assess progress for the poorest of all.

13. Relative low income and material deprivation The measure Why it is important The indicator: Children in households that are both materially deprived and have an income below 70% of contemporary median income before housing costs. What it measures: This captures whether families’ living standards are improving. What survey we use: Family Resources Survey. Captures living standards more directly. Deprivation measures resonate well with the public perception of poverty and the view that a poverty measure should encompass some idea of the practical effects of living in low income. Strong relationship between material deprivation and persistent low income; as the time spent in low income increases, the severity of deprivation increases.

14. Persistent low income The measure Why it is important The indicator: Children in households in relative low income for at least 3 of the last 4 years. What it measures: Captures the proportion of children who experience low income over the long-term. What survey we use: Previously the British Household Panel Survey, which was subsumed in 2009 within a new longitudinal survey, Understanding Society. The length of time a child is in poverty and how often it recurs can have a significant detrimental impact on their experiences and life chances. Children who live in persistent poverty are more likely than those who experience temporary poverty to be at risk of worse outcomes. Lower chance of escaping low income as the length of time in poverty increases.

15. The Story of the Bill

16. The story of the Bill • The Team • Consultation document • Content of the Bill • Definitions and Regulations • Commons • Lords

17. Story of the Bill 1: the team • Bills are usually co-ordinated by a central Bill team, with policy leads who advise on the content • Lawyers then work with Parliamentary Counsel to draft the legislation ensuring it reflects the policy intent • For this Bill, it was clear that some of the policy leads would need to be analysts • It was also necessary to consult with statisticians and analysts in DWP and ONS about the Family Resources Survey

18. Story of the Bill 2: consultation • The consultation paper ‘Ending Child Poverty, Making it Happen’ was published early last year • It asked whether the measures of child poverty currently used were the right ones for the Bill, for example, whether an absolute measure of poverty should be included • Responses also provided views on a range of other possible indicators

19. Story of the Bill 2: consultation Overall conclusions • It is important to measure income poverty and material deprivation • A measure of absolute poverty should be retained and is useful in time of recession • We should also measure persistent poverty We also consulted internal analysts and external experts So, the Bill contains four poverty targets • Relative low-income (less than 10%) • Absolute low-income (less than 5%) • Material deprivation and low-income (less than 5%) • Persistent low-income (target to be defined)

20. Story of the Bill 3: drafting the content Some challenges: • Incorporating very detailed and complicated definitions into the legislation (e.g. income) • Ensuring that the legislation could take into account future changes in the survey methodology (e.g. extension of coverage) • Accounting for the fact that one of the surveys didn’t have any data yet! The solution? Regulations, Regulations, Regulations!

21. Story of the Bill 4: regulations • So, we used regulations to present detailed and complex definitions, and definitions which might change with survey methodology • We then needed to draft regulations based on the survey • For example, we used the survey questions and the survey analysis procedures to draft a definition of income which matched the definition used by the survey Challenge: • Survey guidance does not have to account for every single eventuality, but the law should

22. Story of the Bill 5: communicating the Bill • Because the Bill includes a lot of technical definitions, we had to take particular care that the intent and effect of the Bill were communicated clearly to stakeholders • Meeting with the child poverty lobby • Draft regulations and briefing papers for Parliamentarians • Explanatory notes

23. Communicating the Bill in action

24. Story of the Bill 6: Commons Committee Challenge: using analysis to explain the focus of the Bill • During committee stage there was a lot of debate about the importance of tackling the causes of poverty • For example, lone parenthood was cited as a cause of child poverty, and therefore something to be addressed by the Bill • To be able to respond to this, we needed to understand and interpret analysis which had been carried out on the subject • Correlation does not imply causation!

25. Story of the Bill 6: Commons Committee “ Results of the cross-OECD meta-analysis suggest that the maximum size of the effect on child outcomes of growing up in a single-parent family is small…The general thrust…is that the causal effects of being raised in a single parent family are smaller than hitherto believed, or even zero. From ‘Doing Better for Children’ OECD, 2009

26. Story of the Bill 6: Commons Committee Challenge: using analysis to explain the definitions in the Bill • People have intuitive beliefs about what poverty means • Technical definitions of poverty can sometimes conflict with these, and for good reason • At committee stage concerns were raised that our material deprivation measure did not sufficiently capture poor housing, which some members felt was an essential element of material deprivation

27. Task 2!Defining material deprivation • We use a list of21 items to assess whether a household is experiencing material deprivation • What items do you think should be included on this list? • Write down 5 items

28. Task 2!Defining material deprivation Adult questions: • A holiday away from home for at least one week a year, whilst not staying with relatives at their home • Have friends or family around for a drink or meal at least once a month • Two pairs of all-weather shoes for each adult • Enough money to keep your home in a decent state of decoration • Household contents insurance • Regular savings of £10 a month or more for rainy days or retirement • Replace any worn-out furniture • Replace or repair major electrical goods such as a refrigerator or a washing machine, when broken • A small amount of money to spend each week on yourself, not on your family • Adult has a hobby or leisure activity

29. Task 2!Defining material deprivation Child questions: • A family holiday away from home for at least one week a year • Enough bedrooms for every child of 10 or over to share their bedroom only with siblings of the same sex • Leisure equipment such as sports equipment or a bicycle • Celebrations on special occasions such as birthdays, Christmas or other religious festivals • Swimming at least once a month • Friends around for tea or a snack once a fortnight • Child has a hobby or leisure activity • Toddler group/nursery/playgroup at least once a week • Go on school trips • Outdoor space or facilities nearby to play safely • Prevalence-weighted approach • Set of items which best distinguishes those families with poor living standards

30. Story of the Bill 7: Lords Committee • We are currently in Lords Committee • There has been a lot of debate about the quality of the data • A recent Institute of Fiscal Studies report concluded that towards the very bottom of the income distribution, income is not a good indicator of living standards “…the measure of income …seems pretty dubious if you read the IFS report…This report finds…households with children on the lowest income do not have the lowest average living standards.” Lord Freud, Extract from Hansard

31. Story of the Bill 7: Lords Committee How did we respond? • We have always acknowledged that the very bottom of the income distribution is less reliable • We have a combined low-income and material deprivation measure which the IFS report regards as a suitable solution “ Another alternative would be to use those households who had both a low income and a low living standard… This can be seen as a pragmatic compromise, which seeks to reduce the inaccuracies… that arise from using a single measure… but it also has some conceptual or theoretical justification…” From ‘The living standards of families with Children reporting low incomes’, IFS 2009

32. Lessons Learned • Limitations – of law, of data • Analysis can (sometimes) win arguments • Communication is key • Five heads are better than one

33. The end Contacts: Danielle Mason 020 7340 7613 Danielle.mason@childpovertyunit.gsi.gov.uk Natalie Abbott 020 7783 8069 Natalie.abbott@childpovertyunit.gsi.gov.uk