Treasury Committee: Press notice

Comprehensive Spending Review fails to provide clear route map for meeting 2010-11 child poverty target, says John McFall MP

 “The 2010 child poverty pledge should not be seen as an optional extra in the Government’s programme for the remainder of this Parliament,” said Mr McFall MP, Chairman of the Treasury Select Committee. “The simple consequence of failing to meet it  is that many children will continue to live in households in poverty for too long.”

West Dunbartonshire MP Mr McFall was speaking following the publication of the Committee’s First Report of Session 2007-08 on The 2007 Comprehensive Spending Review (HC 55).

He continued: “The Government must do more to make clear how it is to meet its target to halve child poverty by 2010, or face growing concerns that its commitment to the target is being watered down.”

The Committee’s Report argues that the Comprehensive Spending Review is not accompanied by a clear explanation of the linkage between the Government’s target to halve child poverty by 2010-11 and the proposed deployment of resources to meet that target and expresses concern “that the Government may have drawn back from a whole-hearted commitment to meeting this target.”

The Committee notes that there might be a long-run trade-off between meeting the 2010-11 target and longer term ambitions to increase employment, but also observes that the linkage between child poverty and working households is by no means clear cut. The Committee concludes that “the Government must either initiate a public debate on that trade-off, or rededicate itself to meeting the 2010-11 target”.

Mr McFall said: “The 2020 to eliminate child poverty remains of paramount importance, but the Comprehensive Spending Review does not help us in understanding how the Government is seeking to reconcile any tension between the 2010 and 2020 targets.”

The Committee notes that the Treasury has been assigned lead responsibility for meeting the 2010 target, while other Departments are in the lead in devising longer term measures, and states that “we remain to be convinced that the division of departmental responsibilities will not accentuate the possible tensions between the 2010-11 target and the final target to eradicate child poverty”.

Mr McFall said: “The Treasury gave us a somewhat convoluted explanation as to its role and that of other departments in relation to child poverty. The division of responsibilities accentuates the problem arising from the Government’s failure to set out clearly its strategy for meeting the 2010 target and the resources needed as part of that strategy.”

The Committee’s Report also notes the importance of the efficiency programme to the Government’s public service ambitions during an era of slowing public expenditure growth, characterising the programme with a £30 billion target for savings as “stretching and highly ambitious”.

Mr McFall said: “During the period up to March 2008, many departments have been able to claim efficiency savings which are not cash-releasing and which are not off-set by the implementation costs to make the efficiencies work. From April 2008, this will not be possible. The Treasury is taking the efficiency programme to a new level, and making greater demands on departments, public bodies and local authorities.”

The Committee emphasises that financial savings should only be recorded as efficiency savings if there is sufficient evidence that service standards have at least been maintained, and calls for such evidence to be the subject of regular external audit by the National Audit Office.

Mr McFall said: “If so-called ‘efficiency savings’ lead to a diminished service to the public or a reduction in product quality, they are simply ‘cuts’, not savings. The Government needs to a commit itself now to a regular programme of independent and external audit of service quality, starting with benchmarking service standards in 2008, if public and parliamentary confidence in the nature of the new efficiency programme is to be maintained.”