It comes as no surprise to any parent to hear the cost of bringing up a child continues to grow. My recent report for Child Poverty Action Group (CPAG) and the Joseph Rowntree Foundation (JRF), “The Cost of a Child in the 21st Century” (pdf), puts the figure at more than £140,000 from birth to 18, with recent increases in the cost of childcare, food and transport outstripping headline inflation.
See Chart 1:
Unlike many estimates of children’s costs, this is based not on estimates of what families actually spend on various items for their children but on detailed research on the cost of a minimum basket of goods and services, allowing families to participate in society. The distinction is important, because minimum costs are not about an affluent society “spoiling” its offspring.
Roughly one in three UK families have problems providing what the general public considers necessary for an acceptable living standard.
What do we do as a society to help the most needy families afford these necessities? For many years, we neglected their needs badly. Between the late 1970s and late 1990s, child benefit and children’s elements of out-of-work benefits were allowed to decline relative to general living standards.
However, the last government reversed this trend decisively. Children’s benefits for out-of-work families are today about 50% higher in real terms than in 1997, twice the increase in average household incomes over the same period, which helped achieve significant child poverty reductions since the 1990s.
As a result, these benefits are typically worth 80-90% of the additional cost of having a child. Not quite enough to provide for minimum children’s needs, but a whole lot closer than under the squalid benefit levels of a generation ago.
See Graph 1:
But the tide appears once again to have turned. Child benefit has been frozen; most other benefits and tax credits have been pegged to the Consumer Prices Index, which has been rising substantially slower than the minimum cost of living; and some other essential areas of support for families with children – notably rents and childcare – have been sharply cut.
The government’s new Universal Credit (UC), being introduced from next year, will do nothing in itself to correct this decline. But it might help by making it more visible. The headline UC level will affect the wallets of millions of families, in and out of work.
Our annual calculation of the minimum cost of a child provides a benchmark against which the adequacy or otherwise of UC can be monitored.
See Graph 2:
The big question is whether a visibly declining contribution of the state to the material well-being of the worst off children could again become as politically sustainable as it was in the 1980s and 1990s.