Official UK measures

Author/s: 
Joanna Mack

In this section you will find details of the official measures used to monitor child poverty in the UK under the Child Poverty Act and (below) those adopted by the European Union to measure poverty in member countries.

The Child Poverty Act

In 2010, the Labour Government passed with all party support, the Child Poverty Act (2010). This act incorporated, for the first time, official measures of child poverty and included targets to be met by 2020. There were four measures:

(1)    Relative income: household income less than 60% of current net equivalised household median income (before housing cost).
(2)    Combined low income and material deprivation: children who experience material deprivation and live in households with incomes less than 70% of current median equivalised net household income.
(3)    Absolute income: household income less than 60% of 2010/11 median net equivalised household income adjusted for prices.
(4)    Persistent poverty: household income less than 60% of current median net equivalised household income for at least three out of the previous four years.

In addition, the 2011 Conservative/Liberal Democrat coalition published the Child Poverty Strategy introducing a new Severe Poverty Measure.

(5)    Severe low income and material deprivation: children who experience material deprivation and live in households with incomes less than 50% of current median net equivalised household income PSE2012 Poverty and Deprivation.

In 2016, with no prospect of the targets being met, the Conservative Government repealed the Act, though, following an amendment in the House of Lords, a statutory duty on the Government to publish the data for four indicators used to track child poverty was retained.

For the combined low income/deprivation measure, The Child Poverty Act (CPA) does not specify the items in the deprivation index.  The CPA deprivation index for 2011/12 is based on Family Resources Survey data and a reliable sub-set of slightly modified versions the 1999 PSE survey deprivation questions.  The CPA deprivation index items (21 items) are:

Child deprivation items
(1) Outdoor space or facilities nearby to play safely
(2) Enough bedrooms for every child over 10 of different sex to have his or her own bedroom
(3) Celebrations on special occasions such as birthdays, Christmas or other religious festivals
(4) Leisure equipment (for example, sports equipment or a bicycle) [
(5) A holiday away from home at least one week a year with his or her family (6) A hobby or leisure activity (7) Friends round for tea or a snack once a fortnight
(8) Going on a school trip at least once a term for school-aged children
(9) Play group/nursery/toddler group at least once a week for children of pre-school age
(10) Attends organised activity outside school each week
(11) Fresh fruit and vegetables eaten by children every day
(12) Warm winter coat for each child

Adult deprivation items
(13) Enough money to keep home in a decent state of decoration
(14) A holiday away from home for one week a year, not staying with relatives
(15) Household contents insurance
(16) Regular savings (of £10 a month) for rainy days or retirement
(17) Replace any worn out furniture
(18) Replace or repair broken electrical goods such as refrigerator or washing machine
(19) A small amount of money to spend each week on yourself, not on your
(20) In winter, able to keep accommodation warm enough
(21) Keep up with bills and regular debt payments

The PSE 2012 Living Standards survey includes all of these measures in its survey data and so can replicate measures of relative income, combined low income and material deprivation and absolute income (though not persistent poverty) used in the CPA (2010) Act and the 2016 severe low income and material deprivation measure. This makes it possible to compare the results from the 2012 survey with the government data from the Households Below Average Income series.

Comparing the results from the HBAI data for 2011/2012, the PSE 2012 survey found that both the relative and absolute income poverty rates had increased between 2011 and 2012, the relative income measure from 17% to 20% and the absolute income measure from 20% to 25%. The greater increase in the absolute poverty rate illustrates the continued decline in UK average household incomes since 2010.  The combined low income and material deprivation poverty rate remained the same at 12% while the severe low income and material deprivation rate rose from 3% in the 2011/12 HBAI data to 4% in the 2012 PSE data.  did not change between 2011 and 2012. For full details see Note on the PSE poverty and deprivation measure.

 

EU2020 Poverty Measure

The European Council meeting on the 17th June 2010 agreed five Europe 2020 headline targets including:

“Promoting social inclusion, in particular through the reduction of poverty, by aiming to lift at least 20 million people out of the risk of poverty and exclusion”

The footnote to this target stated that:

“The population is defined as the number of persons who are at risk-of-poverty and exclusion according to three indicators (at-risk-of poverty; material deprivation; jobless household)”

Thus, the EU2020 headline Poverty Measure is defined as “The sum of persons who are: at-risk-of-poverty or severely materially deprived or living in households with very low work intensity as a share of the total population” .

The ‘At Risk Of Poverty’ measure is the same as the Child Poverty Act relative income measure that is: household income less than 60% of current net equivalised household median income (before housing cost).

The Severe Material Deprivation (SMD) and Very Low Work Intensity (VLWI) are new measures.

EU2020 Severe Material Deprivation
The deprivation index for this measure consists of nine items:

1)    Pay rent or utility bills,
2)    Keep home adequately warm,
3)    Pay unexpected expenses,
4)    Eat meat, fish or equivalent every second day,
5)    A weeks holiday away from home once a year,
6)    A car,
7)    A washing machine,
8)    A colour TV,
9)    Telephone.

The EU defines Material Deprivation as a score of 3 or more and severe material deprivation is a score of 4 or more.  

EU2020 Very Low Work Intensity
The VLWI measure is defined as ‘People aged 0-59, living in households, where working-age adults (18-59) work less than 20% of their total work potential during the past year’.  It includes people aged 18-59, not including students.  The EU groups VLWI into bands as [0 - 0.2] very low work intensity (WI); [0.2 -0.45] low WI; [0.45 -0.55] medium WI; [0.55 - 0.85] high WI; [0.85 - 1] very high WI.

Using the EU2020 combined measure of all those who are at-risk-of-poverty, severely materially deprived or living in households with very low work intensity, 26% of people are in poverty. For further details see Note on the PSE poverty and deprivation measure.

 

Publication date: 
Apr 6 2017