ࡱ> |z}#` [%bjbjmm 4:nb """6~~~8,$6$((;;;#######$%h;(P#"7;#""((#v"("(##:"","""( Q=~}jN" N#D#0$X"R(|("("";}l;;;##c^;;;$666d 666666""""""  The Rt Hon Stephen Timms MP HM Treasury 1 Horse Guards Road London SW1A 2HQ 15 March 2010 Dear Financial Secretary, Roundtable discussion: next steps to end child poverty On behalf of the Campaign to End Child Poverty coalition (ECP), I am writing to thank you for attending the roundtable discussion held at Barnardos on Monday 1st March 2010. We were grateful for the opportunity to discuss with you what we would like to see in the Budget 2010 and next steps that the Government should take to end child poverty. As you will recall, we are concerned that measures are taken to help working families on low incomes. We reported that, despite signs of economic recovery, it is clear that on the ground families are struggling to cope and the recession is having a direct impact on families lives. Families are: Finding basic costs difficult to meet More likely to experience unemployment Getting into debt at high rates of interest Experiencing serious delays and processing problems with benefits, particularly with child benefit and parents are extremely concerned about receiving benefits on time Urgent action and investment is needed and we urge you to consider the following targeted options, set out in the meeting, which will help families on low incomes and lift more children out of poverty. Options for helping families out of poverty now Increase support for childcare costs The childcare element of working tax credit only covers up to 80 per cent of the costs of childcare. Covering up to 100 per cent of the costs of childcare would ensure that parents are better off in work and help families stay out of debt. The increase would cost the Government around 420 million but would have a much lower net cost as it would help parents to access employment. Parents are telling us that they are struggling to meet the costs of childcare and over the last 12 months more families are getting into debt with childcare providers. A recent survey by Gingerbread revealed that the one of the top measures that would make a real difference to parents is making childcare more affordable. Low income families should not have to shoulder the extra 20 per cent of costs of childcare and be forced to cut working hours. Covering 100 per cent of the cost of childcare could be the difference that keeps parents in employment and help tackle child poverty in a targeted way. It would also simplify the tax credit system and make it easier for parents to work out the support they receive for childcare. Despite recent improvements in the take up of tax credits, parents continue to find the process complicated and errors in calculations have a serious impact. A system that pays actual rather than averaged costs would be easier for parents to understand and ensure that parents do not go into debt during holiday months. Help parents meet the costs of school A school clothing grant for families without work will help keep many out of debt when extra costs arise. An annual payment of 50 for pupils on free school meals (aged 5-16) would cost 54 million. Since the recession hit, families are finding it increasingly difficult to meet the costs of school. In a new survey, Save the Children and Family Action, have found that over half of parents (51%) with an income below 30,000, cant afford everything their children need for the start of the school year. 43% of those parents, say they are likely to struggle with the costs of school uniform, 26% with buying their children PE kit. Affording new shoes and winter coats was also found to be a problem and to meet costs parents are cutting back on other essentials, such as paying bills or buying food. Increase funding and access to the Social Fund The Social Fund is an essential source of grants and free credit for low income families. Our preferred option would be for Government to increase the funding for grants but at least increasing funding for affordable credit on a temporary basis would make it easier and more reliable for families to use, help families in times of crisis and prevent increasing spirals of debt. We believe that Government should be able to justify this in terms of the recession, the potential impact of widely forecast interest rate increases and the money that leaches away from poor children in the interest vulnerable families repay to home credit companies typically 242 APR for a 52-week small loan of 300. More families are turning to the home credit companies and the worst kind of lenders as a result of financial exclusion and lack of access to mainstream banking services. The demand for financial help is increasing and placing pressure on grants programmes, such as those run by Family Action. The British Gas sponsored scheme, run by Save the Children and Family Action, was quickly exhausted. These and other charitable grant programmes and schemes will not be able to keep pace with demand as corporate and trust fun income reduces. Consider the Robin Hood Tax A number of key ECP members have now signed up to the Robin Hood Tax campaign. A new tax placed on the financial services industry could raise money for poverty alleviation policies. A levy of around 0.05% on financial transactions could raise $400 billion worldwide. At a time when the Government must invest as well as consolidate public finances, the Robin Hood tax could raise much needed resources. We recommend that serious consideration is given to this measure and the possibility of international co-operation on imposing a new levy that would provide resources that would enable the Government to lift hundreds of thousands of children out of poverty. Whilst we appreciate the constraints of the economic situation, the Campaign to End Child Poverty believes that by adopting the targeted measures set out above, the Government can make a real difference to the lives of the poorest families and avoid the social and economic costs of previous recessions. We encourage you to thoroughly assess all measures in the budget to ensure that there is no negative impact on the poorest families. The Child Poverty Bill should provide the basis for long-term investment and make ending child poverty a priority. Its credibility depends not only on building on what has been achieved so far, but also on acknowledging that new direction is needed to meet the 2020 target. Implementing the child poverty strategies will require adequate resources and support for local authorities and their partners. We look forward to working with the Government to make sure this happens. I would be happy to discuss further any of these issues with you or your officials. Yours sincerely, Ms Julian Walker UK Director Policy and Research Barnardos  This estimate assumes no eligibility changes, and is factored up from existing tax credit spending, see HM Revenue and Customs, Child and Working Tax Credit statistics, April 2009.  Approximate costs based on an annual payment covering the 5-16 age range in all 150 LEAs. 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