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Spending Review: worrying reality behind the words

After all of the hype and fears of the last few weeks and months in the run up to today’s announcement, it would have been quite easy to see the Chancellor’s statement as encouraging, reassuring, even moderate in its tone as he claimed to protect the vulnerable and spending on health, schools and aid.

As with all budgets and big spending announcements, we won’t know the true impact for days, maybe weeks to come. It was several weeks before we were able, with the Institute for Fiscal Studies, to properly interrogate the Chancellor’s claim in June that his budget was ‘progressive’ – showing as we did in August that instead the emergency budget had in fact hit the poorest the hardest.

But as we at Save the Children attempt to make a judgement (as far as we can a few hours after the Chancellor sat down) on behalf of the UK’s poorest children, the reality behind the reassuring words is potentially very worrying.

Firstly, and to the government’s credit, they have invested in child tax credit in order to back a guarantee that child poverty will not increase in the next two years. The continued commitment to ending child poverty has to be welcomed. The fact that the Chancellor is compelled to reference it in his statement is a testament to the cumulative impact of a ten-year-long campaign.

Secondly, and positive again, is the government’s allocation of spend that will target extra childcare and education support for the poorest children. It’s an outrage that a child is so much less likely to do well at school if they are born into poverty.

Save the Children has been arguing strongly for a substantial ‘pupil premium’ – an allocation of extra funds to schools with pupils from poor backgrounds – so that they can provide services like one to one tuition and extra curricular activities, which are known to boost educational attainment. The £2.5 billion allocation for a pupil premium towards the end of this parliament is promising.

The allocation of funds for 15 hours’ free childcare for the poorest 2 year olds is also to be commended.  We know from our own Families and Schools Together (FAST) programme, working with children under five ,that the earlier you help in a child’s life, the more impact you have.

But thirdly, and crucially, today’s announcement – beyond a broad commitment – showed little in terms of how the government is going to be able to deliver against its pledge to end child poverty by 2020.

To meet the targets in the Child Poverty Act, passed by the Labour government this year (with the support of the Conservatives and the Liberal Democrats) the government is going to need to lift 100,000 children out of poverty in every year of this decade to 2020. That will require serious money. Money which was not allocated in the announcement today that sets out government spending for the next four years.

The government makes the task of maximising the number of parents in work the centrepiece of its argument on how to tackle poverty. Yet the announcements today showed little support for the funding needed to back this strategy.  In fact, the further, deep welfare cuts announced today will make matters considerably worse for hundreds of thousands of parents in low income jobs.

Freezing working tax credits, reducing financial help for childcare costs for families in low income jobs, and increasing the number of hours couples will need to work to claim working tax credit, will only serve to make taking jobs and keeping jobs much harder.

Benefits reform

The strongly billed benefits reform from Iain Duncan Smith’s department is now to be carried out over the next ten years, with just £2 billion allocated to it between now and the next election. This money is likely to be taken up by the costs of the huge reform in payment and monitoring systems required as benefits are streamlined. There will be few resources left over to help boost the earnings of those in low paid jobs.

With 500,000 public sector job losses in the pipeline, and only the promise of the private sector filling the void, the poorest parts of the UK where private sector growth won’t reach are only likely to see deprivation deepen as many families ask ‘but where are the jobs?’.

Poorest families face bleak future

All of this, on top of the more than £20 billion in cuts to benefits and support to families and children announced by the coalition before today, amounts to the poorest families facing a bleak future. Forseeable as it is from a few hours after the Chancellor’s statement .

A promise not to add yet more families to the poverty count seems reassuring. However, it won’t be to the families of 3.9 million children who, it appears today, look more certain to have their childhoods lost to poverty.

Find out more about UK Child Poverty work

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