Welfare reform to affect child poverty

Children’s commissioners in the UK have warned that child poverty could increase due to the state of the economy and public finances, with key services already being hit by cuts.

Their report suggests that changes to the welfare system could push more families into poverty.

Currently one in five children lives in poverty, according to official statistics. Welfare reform will introduce tougher regime for claimants, but the Government suggests that the changes will help to cut poverty, not increase it.

The report states: “At the heart of our concerns within this report are the high levels of persistent poverty in the UK. There is a very real danger that this figure [3.8 million] will increase.

“We are seriously concerned that those most vulnerable in our society will face and are facing disproportionate hardship.”

A spokesman for the Department for Work and Pensions said: “The best and most sustainable way to reduce child poverty is through parents working.

“This is why our welfare reforms will make sure work pays and remove disincentives from the benefit system.”

A Government spokesperson said: “We will continue to work closely with the children's commissioners to ensure that policy and implementation is informed by their ongoing investigations and advice.”

Coalition housing plans to be revealed

The Coalition Government has pledged to create more affordable housing and help first-time buyers to buy new homes by allowing them to borrow up to 95% of their value. The £400m plan aims to reverse the slow building rates and support up to 32,000 jobs.

The ‘Get Britain Building’ fund will allow developers to compete for funds to build on sites cleared for development. It is hoped that 450,000 homes will be built by 2015.

The housing strategy will also underwrite a small percentage of mortgages for ‘new build’ homes, to reduce the size of the deposit by shifting the loan-to-value ratio. Additionally, an extra £30m will be invested to refurbish empty homes for use.

Ahead of the announcement, Prime Minister David Cameron and Deputy Prime Minister Nick Clegg said: “By the time we came to office, house building rates had reached lows not seen in peace time since the 1920s.

“The economic and social consequences of this failure have affected millions: costing jobs; forcing growing families to live in cramped conditions; leaving young people without much hope that they will ever own a home of their own.

“These problems – entrenched over decades – have deepened over the past few years. The housing market is one of the biggest victims of the credit crunch: lenders won't lend, so builders can't build and buyers can't buy.”

In 2010-11, only 121,200 new homes were made available, 6% less than the previous year.

They continued: “That lack of confidence is visible in derelict building sites and endless For Sale signs. It is doing huge damage to our economy and our society, so it is right for Government to step in and take bold action to unblock the market.

“With this strategy we will unlock the housing market, get Britain building again, and give many more people the satisfaction and security that comes from stepping over their own threshold. These plans are ambitious – but we are determined to deliver on them.”

The National Housing Federation praised the announcement for investment in house-building, but suggested that the Government needs to go much further to “fix the broken housing market”.

Chief executive David Orr said: “Increasing the supply of new homes is a key part of tackling the housing crisis - but so too is affordability and it's vital that we build homes for rent and sale for people on modest incomes.

“Today’s announcement of an additional 3,250 affordable homes is a drop in the ocean. Ministers need to be bolder and go much further to fix the broken housing market and they can do it in a way that is effectively cost neutral.”

Labour criticised the fall in the rate of house building since the Coalition came to power, and suggested a tax on bank bonuses could be used to fund investment into affordable homes.

Jack Dromey MP, Labour’s Shadow Housing Minister said: “With millions in need of a decent home at a price they can afford, the country is gripped by a growing housing crisis. Their housing policies are failing and George Osborne’s mismanagement of the economy is making things worse, holding back house-building.

“Labour’s five point plan for jobs and growth would introduce a bank bonus tax to fund 100,000 jobs for young people and build 25,000 more affordable homes.”

Hilary Benn MP, Labour’s Shadow Communities and Local Government Secretary said: “People are relying on the Government to get this right. It would be yet another false dawn if the scheme artificially raised house prices or further risked the stability of banks.”

Author's Bio: 

Roy Rowlands writes for Public Sector Executive an essential guide to public sector management offering a wide view public sector news views and opinions