Work is underway to develop the government’s child poverty strategy, announced shortly after its election in July. The government has rightly described child poverty as a ‘scar’ and has set out a clear and very welcome ambition to reduce child poverty. In October, the government set out more information about how it plans to develop its strategy, which will focus on a number of areas: reducing essential costs, increasing financial resilience, better local support, and – crucially – increasing the incomes of families living in poverty.
Notably, the commitment to consider options for increasing the incomes of families living in poverty was accompanied with a promise to ‘consider how social security reforms could support people into work and help alleviate poverty’. Despite the obligatory reference to work, this seems to be a clear concession to the widespread consensus that making a serious dent in child poverty is impossible without serious consideration of the role played by social security.
When it comes to considering which social security reforms might help to reduce child poverty, scrapping the two-child limit has rightly been the main focus. Research shows that, by a number of metrics, scrapping the two-child limit is the single most effective policy lever the government could pull to reduce child poverty. This deeply cruel policy directly creates severe financial hardship for hundreds of thousands of families. And as it only applies to children born in 2017 onwards, the two-child limit is projected to pull a growing number of children into poverty as the years go on.
There has also been an increasing, welcome focus on the impact of the benefit cap on child poverty. Although this policy affects fewer households than the two-child limit, the impact is often deeper. Our caseworkers have seen parents affected by the cap being left with as little as £100/month for them and their children to live on after housing costs. The government’s decision to freeze local housing allowance rates, announced at the autumn budget, has also drawn deserved criticism, partly due to the effect this will have on levels of child poverty.
But what has received significantly less attention is the role that health and disability benefits play in alleviating child poverty. The most significant announcement that the government made on social security at the Autumn Budget was that it would be making £3 billion cuts to health & disability benefits. These ‘savings’ had been budgeted for by the previous government as part of its plan to remove over £400/month from over 400,000 seriously ill and disabled people. Although the new government has indicated these plans will not be taken forward, it has committed to delivering the £3 billion cuts in a manner that is still to be disclosed – a green paper due in spring 2025 should set out more detail about this. But while the detail is still to come, it seems inconceivable that £3 billion of ‘savings’ can be found within the health and disability benefits budget without removing or reducing support for disabled people.
This matters in relation to the government’s ambitions on child poverty. Recent Action for Children research showed that only 12% of parents receiving incapacity benefits are keeping up with all bills and credit commitments without any difficulties. Statistics from Trussell show that 70% of those who use food banks are disabled. And around one in four people on universal credit who receive the higher rate of incapacity benefits – the same payment that the previous government was planning to remove for over 400,000 people – have children. This means that an attempt to cut support on the same scale as the previous government proposed could see over 100,000 families losing access to vital payments of over £400/month – a significantly worse reduction in income on an individual level than the two-child limit.
Accessing health & disability benefits is also one of the most common ways that families can become exempt from the punitive benefit cap. So any measures which remove families’ entitlement to health or disability benefits will also mean benefit cap restrictions affecting a significantly higher number of children.
The terms of reference for the child poverty taskforce refer not just to social security reforms that would help alleviate poverty in and of themselves but also to reforms which ‘could support people into work’. Such language has, in the recent past, been used to justify reforms that were really driven by a short-term need to find savings. In reality, we know that cutting health and disability benefits only deepens poverty while doing virtually nothing to help people into work. The Office for Budget Responsibility’s analysis of the previous government’s planned cuts showed that removing £400/month from over 400,000 seriously ill and disabled people would only have led to an additional 3% of those affected entering work over a 5-year period. This is consistent with the DWP’s own data, which shows that disabled claimants who are assessed as having limited capability for work but who do not receive any additional financial support are only marginally more likely to enter the workforce than those who do.
The reality is that delivering social security reforms which truly support disabled parents and carers into work and thereby reduce child poverty means investing in health & disability benefits. Rather than further stripping back an already threadbare system, we need positive incentives which remove barriers to work for disabled families. This means reforming the punitive assessment and decision-making system which routinely punishes disabled people for trying work. It means introducing robust protection from reassessment for disabled people who try work. It also means exploring options to reduce the severe drops in income disabled families often experience when they try work and it doesn’t work out – including by increasing the standard allowance of universal credit, as we set out in our Security not Sanctions report. Taking a savings-based approach will only deepen poverty, not lift families out of it.
As we wait to see how the government intends to reduce child poverty, then, we will be looking not only to the child poverty strategy it hopes to publish in 2025, but also to the plans for reform of the health & disability benefits system that the government will be setting out in spring 2025. Claiming that cuts will help people into work simply won’t pass muster. We need a serious plan to remove the real barriers to work in the health and disability benefits system, not hollow rhetoric to justify policies that only deepen child poverty further.
If you would like to find out more about our policy and campaigns work, please contact our Senior Policy Advisor, Sam, by emailing samuelthomas@z2k.org
