Coffee House

Ignoring struggling families will be politically costly

5 September 2012

More bad news for Britain’s families: new research shows that the cost of bringing up a child is an eye-watering £143,000.

This piles more pressure on a government that already knows it has to do better to show it’s on the side of families struggling to make ends meet.

Based on what parents say is essential, our report shows the minimum required to raise a child until the age of 18 today is £143,000 (including housing and childcare costs), which averages out at about £150 a week.

The report also reveals that this cost is rising faster than inflation. The rising price of food, water and fuel contribute to this but it is the high cost of childcare in the UK that is the most significant driver of this above-inflation increase. Since 2008, childcare costs have risen by about 30 per cent outside of London and by a staggering 50 per cent in the capital, squeezing family budgets further.

Claim your gift

Benefits and tax credits go some way to offsetting the extra costs families encounter when they have children but the report shows these fail to support families adequately. Out of work benefits provide between 73 per cent and 94 per cent of minimum costs of a child, leaving parents to deal with the shortfall.

The picture does not get any better for working parents. A full time job on national minimum wage for couple families, combined with benefits and tax credits, meets only 82 per cent of the basic costs of a child.

Yet, the Government is scaling back its financial support to families.

Child benefit goes some way to helping families with the costs of children, but the three year freeze the government introduced in 2011 looks set to have reduced its real value by 10 per cent by 2014. The reduction in childcare support provided by tax credits, from 80 per cent to 70 per cent of costs, is also hurting.

Why should the Government help parents with the cost of children?  Because it is a national responsibility.

Ignoring these costs and allowing child poverty to soar damages children’s childhoods and destroys life chances. It also inflates public spending levels (child poverty costs society £25 billion a year) and, by wasting talent, weakens the UK’s skills base and economic competitiveness.

As No 10 reportedly understands, it’s not just about the social and economic costs. Walking away from struggling families or, worse, making repeat raids on shrinking family budgets also risks the government paying a hefty political price in 2015.

Alison Garnham is Chief Executive of the Child Poverty Action Group.

Give the perfect gift this Christmas. Buy a subscription for a friend for just £75 and you’ll receive a free gift too. Buy now.

Show comments
  • Fed-ex

    Having been on both ends of the argument of being a full time employee to becoming unemployed.There is no easy answer. The government IS responsible for putting undue financial pressure onto struggling families therefore they are responsible for the outcome. The recent cuts have made some families in Wales almost £300 worse off per month and getting less help than when they were employed. Reduced housing is a must ,more so in the private rental sector where housing benefit is paid at the same rate as council housing even though it cost more,

  • Robert_Eve

    It’s not the government’s job to support families.

  • AnotherDaveB

    Ramesh Ponnuru had an interesting article in National Review on children and welfare. He advocated a non-refundable tax allowance tied to the child.

    • james102

      I can’t open it but something on the lines of tax allowances
      for children to be used by parents?

      Anything that encourages people to support their families
      rather than rely on benefits must be good.

      Unfortunately the side of the equation dealing with the size
      of the state sector seems a no go area. The debt goes forward so our
      grandchildren are expected to pay and we just increase the debt at a slower
      rate and talk about “cuts” and reducing deficit while borrowing money to send
      as foreign aid.

      • AnotherDaveB

        Yes, that’s right. But tax allowances offset against tax due on income. The government would never post the parents a cheque.

  • TomTom

    Why not treble tuition fees to help out ? Maybe dropping VAT on clothing might help ?

    • james102

      Luxemburg has far fewer graduates proportionately than us
      but the lack of English Lit (or even Luxembourger Lit) and History graduates
      does not seem to harm their per capita wealth.

  • itdoesntaddup

    The solution is to get costs down. That means less costly, but more intelligent regulation of childcare. It means reducing housing costs by letting the house price bubble deflate. It means cutting the general deficit so that QE doesn’t impose inflation. It means adopting a sensible energy policy so that energy costs become more competitive.

    That’s how we managed in the past.

  • james102

    Stop loading so called Green taxes on people and raise the
    tax threshold before income tax is liable. Stop forcing us to pay for “Equality”commissars.Get
    us out of the Franco-German federation so food costs can be reduced.

    Stop importing poverty directly from the third world and
    indirectly by displacing Britons in the workplace, schools and housing with

  • Daniel Maris

    We need a deal with poor families – you stop having more than two kids and we’ll make sure you and your children live well. But we also need to put a complete stop to under 18 pregnancies and introduce other measures to deal with single parenting in the 18-25 age group. Child benefit should be very generous for one child, go down at two and not increase thereafter. No state supported families with more than four children.

    • RichardH

      You’re very generous! I’d have said no child benefit at all. Just scrap it. Lifestyle choices should not be subsidised.
      And another basic moral standpoint needs to be enforced – if you’re a burden, you shouldn’t deliberately add to it. So people already existing on benefits should receive nothing more from the state – cash, housing, anything – regardless of how many sprogs they deign to foist on us all.

Can't find your Web ID? Click here