What is poverty?

There is no single, universally accepted standard definition of poverty. Modern definitions of poverty have moved away from conceptions based on a lack of physical necessities towards a more social and relative understanding. The European Union’s working definition of poverty is:

‘Persons, families and groups of persons whose resources (material, cultural and social) are so limited as to exclude them from the minimum acceptable way of life in the Member State to which they belong’.

This is now the most commonly used definition of poverty in the industrialised world. It recognises that poverty is not just about income but about the effective exclusion of people living in poverty from ordinary living patterns, customs and activities.

How is poverty measured and monitored?

There are three main official sources of data on child poverty, and social exclusion in Britain:

1. Households Below Average Income (HBAI) statistics is derived from an analysis of the Family Resources Survey. It uses relative incomes on both before housing costs and an after housing costs basis and adopts a 60% of median income as a proxy for the poverty line. The after housing costs measure provides the best indicator of disposable income. In Wales for example a higher percentage of children are defined as in poverty using the after housing costs as compared with the before housing costs measure. It also uses the British Household Panel Survey to provide estimates of the persistence of poverty.

2. Opportunity for All monitors progress towards the UK Government’s goal to create a "fairer, more inclusive society where nobody is held back by disadvantage or lack of opportunity". As well as reviewing policy the report includes a set of indicators including those covering children and young people.

3. The UK National Action Plan on Social Inclusion - At the Lisbon summit in 2000, the European Council agreed to adopt an ‘open method of coordination’ in order to make a decisive impact on the eradication of poverty and social inclusion by 2010. Member states adopted common objectives at the Nice European Council and all member states drew up National Action Plans against poverty and social exclusion. The first UK National Action Plan on Social Inclusion 2001-2003 was published in July 2001. The second UK National Action Plan on Social Inclusion 2003-2005 was published in July 2003.

The Department of Work and Pensions (DWP), however, has been reviewing the way in which it measures income poverty. Proposals were made in December 2003 by the DWP, after consultation, to use a three-pronged approach based on absolute low incomes, relative low incomes and material deprivation and low incomes combined. These measures will all be on a before housing costs basis. The Government intends to carry out further methodological work and discussion with experts before using these new measures.

Although the relative low-income measure receives most attention, it has some drawbacks as an exclusive long-term measure of child poverty. In 1999 the Welsh Office commissioned a Welsh Index of Multiple Deprivation at the electoral division level. It maps the extent of multiple deprivation in Wales and covers income, employment, health, education, housing, and geographic access to services. The Local Government Data Unit Wales was commissioned by the Welsh Assembly Government to set up an Advisory Group and consult widely on a proposal to revise and update the Welsh Index of Multiple Deprivation. The Advisory Group advised that the Index should be revised and updated with a target data of April/May 2005, and updated regularly thereafter to precede each three year financial cycle.

How many children in Wales are living in poverty?

Household Below Average Income Figures (HBAI) for 2006/07 (published in June 2008) show, that after housing costs, 25 per cent of children in Wales - 150,000 -lived in households with incomes below 60% of the median, higher than the British average. This represents an increase from 144,000 the previous year

National Assembly for Wales, A Statistical Focus on Children in Wales 2003 shows that 20.5% of pupils in primary schools and 17.7% of pupils in secondary schools were entitled to free school meals.

National Assembly for Wales, Homelessness Statistics, 49/2008 show that between October and December 2007 there were 1,488 households in Wales accepted as homeless. Of the 240 households in Bed and Breakfast accommodation, 15 per cent were families with children.

Who is living in poverty?

Households Below Average Income (HBAI) statistics show that the following children are at greatest risk of being poor:

• Children of lone-parent families

• Children in large families (more than 3 children)

• Children growing up in households where there is no-one in full-time employment

• Children from some minority ethnic families
  
  Not enough data exists about this issue in Wales but UK wide figures show that minority ethnic children have varying rates of child poverty but are more likely to be living in poverty than children in white households. According to the latest HBAI statistics 69% of households headed by someone of Pakistani or Bangladeshi ethnic origin were living in households with below 60% of median income on an After Housing Costs basis. Some minority ethnic groups are more likely to contain large families, which is a risk factor for children living in poverty. Other groups have a high incidence of lone parenthood, also a risk factor for children living in poverty. Minority ethnic children are particularly affected by living in a workless household. Unemployment rates are particularly high for the Caribbean, black African, Bangladeshi and Pakistani ethnic groups and are also above average for those of Indian origin. Education and skills under-attainment and prejudice and discrimination in education and the workplace account for much of this disadvantage. Other issues include occupational segregation, high levels of ill health, language issues and the limited effectiveness of employment programmes.

• Children in households with a disabled child or adult

Individuals in families containing one or more disabled people were more likely to live in low-income households than those families with no disabled person. Studies have shown that parents of disabled children were less likely to work, and that when they did their earnings were lower, than for parents as a whole. It is often difficult for parents to find suitable, affordable childcare. Some disabled children may require frequent visits to hospital especially when they are young and a diagnosis and treatment programme are being decided. This makes it extremely difficult for parents to work, especially lone parents. Recent Joseph Rowntree Foundation findings show that bringing up a disabled child is more costly due to increased costs of transport; clothing and shoes; more frequent changes of bedding; damage and breakages in the home if the child has severe behavioural problems and the need for special toys and equipment. There is also evidence that socially disadvantaged children are less likely to apply for Disability Living Allowance and less likely to be successful at receiving an award at the higher rate.

Disabled children are also more likely to suffer from participation and service poverty. The Disability Rights Commission reports that schools and educational establishments vary in their willingness and capacity to address and remove barriers to education for disabled children and young people. Research for Barnardo’s on families with disabled children identified a lack of resources and restrictive rules that exist within play, leisure and recreational services.