Findings from our report were featured in The Observer, Sunday 12 May 2019

A new study by Policy in Practice for the Office of the Children’s Commissioner shows a dramatic increase in child vulnerability as a result of welfare reforms.

The research shows that the introduction of Universal Credit, the two child limit to benefits and the Benefit Cap combined has meant that the number of low-income families who are struggling to make ends meet has jumped from 13% to 25%. Further, the cumulative impact of welfare reforms is considerably greater than the impact of each reform in isolation, affecting 48% of households who lose £3,441 on average per year.

Download The impact of welfare reform on child vulnerability report here

Data analysis that evidences the impact of policies on children

Local authority Children’s Services departments typically use two main datasets, the Children in Need Census and the Children Looked After SSDA903 return, to track children in care and those at risk of being in care.

These datasets typically record vulnerable children’s interaction with statutory services but do not systematically hold any information about the family context, or their financial circumstances. This makes it difficult to link information on the relationship between poverty and child vulnerability, and it means local authorities can’t easily identify the children who are at risk of being at risk, making preventative work very difficult.

The benefits datasets held by local authority Revenue and Benefits teams do hold social and economic information on low-income families. Analysis of household level data is the missing link for Directors of Children’s Services who want to prevent vulnerability and design effective early intervention strategies for the 1.2 million children who are at risk of being referred to Children’s Services.

Policy in Practice works with these datasets on an ongoing basis for over thirty councils, helping them to identify and engage households, and track the impact of policy interventions on low-income households. We were asked by the Children’s Commissioner to use this data to assess the impact of Universal Credit and associated welfare reforms will have on children in low-income households.

Research findings

The two core conclusions from this research are as follows.

Firstly, it is possible to model the impact of welfare reforms on low-income families’ level of financial resilience.

Our analysis finds that:

  • Universal Credit broadly benefits families with children, with 56% of households better off by £172 per month, though 40% are worse off and lose £181 on average per month
  • The five week wait pushes 70% of families from a cash surplus to cash shortfall, and 73% of families with savings would see them completely exhausted at some point during those first five weeks
  • The Universal Credit advance increases the number of households who would face a cash shortfall by 63%, from 11.6% under Universal Credit, to 18.9% once the advance payment is deducted from UC awards
  • The two child limit will ultimately impact 32.1% of children. The policy is pushing 15.6% of children who are already facing a cash shortfall, further at risk
  • The Benefit Cap affects 2.9% of households, who lose £2,832 on average per annum
  • The cumulative impact of welfare reforms is considerably greater than the impact of each reform in isolation, affecting 48% of households who lose £3,441 on average per annum

This shows how the impact of complex policy instruments like Universal Credit and other reforms can be broken down into their constituent parts, to reveal their real-terms impacts. For example, our analyses show that many families are eligible for a higher take home income under Universal Credit compared to the legacy system. However, the substantial financial shock posed by the five week wait means that families may be left in worse financial health after migration, as a result of having to dip into savings or to repay a Universal Credit advance payment.

Comparison between take home impact of Universal Credit policy elements

The two child cap penalises children who can’t choose their birth order or the number of siblings their parents are having. Putting children in a position where they are worse off through no fault of their own is morally wrong and risks damaging the life chances of already vulnerable children.
Anne Longfield, Children’s Commissioner for England

Secondly, this analysis is carried out on anonymised data from 128,119 real families. This means that it can be used to intervene with households adversely affected (or likely to be adversely affected) by government reforms.

For example, council staff can use derived measures like financial resilience to proactively identify and support vulnerable children, such as those living in households already facing a cash shortfall who are set to lose out further because of the two child limit.

Many of Policy in Practice’s LIFT Dashboard clients are doing just this, leveraging the vulnerability factors captured through Housing Benefit data to drive early intervention.

LIFT Dashboard view of families in an income shortfall highly affected by welfare reforms

The Children’s Commissioner believes that central and local government should be doing more to use administrative data to better understand the drivers of vulnerability in children, and to proactively use data like this to help families. While this research uses Housing Benefit and Council Tax Support data from nineteen local authorities, Universal Credit for gathers detailed information on national basis on the living standards of over six million low-income families.

  • The data be used to identify vulnerable children, including those put at greater risk as a result of government reforms to the benefit system
  • Linking this data on a pseudo-anonymised basis to other datasets, such as information on children in care, or those at risk of being in care, can help to identify the drivers of vulnerability
  • Longitudinal analysis can help to identify what types of intervention are most effective at preventing vulnerability, or at stopping children from moving into care

The DWP have access to national data on all Universal Credit recipients, and those on legacy benefits. The potential for sharing this data to drive targeted and effective interventions across central and local government, is immense.

It’s possible to identify children who are at risk using administrative data. as shown through this analysis. The government needs to make this information more accessible, so it can be used to help those that most need it.
Deven Ghelani, Director and founder, Policy in Practice

Find out more

  • Download The impact of welfare reform on child vulnerability report here
  • Download media release here

Register for an upcoming webinar

TitleDateStart TimeDurationRegister
London: Boost safeguarding through multi-agency data sharing The responsibility to safeguard vulnerable residents lies with councils and a range of safeguarding partners, but too often vulnerability is identified too late.

Limited data co-ordination between organisations makes it hard to identify people who need support before they hit a crisis and to also understand whether they are known to other safeguarding agencies and the wider safeguarding landscape.

Prevention is critical to improving safeguarding and we know that data needs to be more effectively shared across agencies if we are to better protect vulnerable people and reduce the potential of people falling into the social care system. This is a big challenge.

Join our meeting to hear learnings from a powerful project, backed by the LGA and NHS Digital, to link data across adult services, children's services, public health, the NHS, Police and Fire and Rescue Services.

Join us to hear:

- How this innovative and ground-breaking approach to combining administrative datasets has created a clear view of safeguarding concerns across all partners
- How new smart approaches to data management have tackled the security and data governance challenges
- How the data is brought to life to help multi-agency safeguarding teams, social workers and other frontline safeguarding teams improve communication, liaison and decision making

With guest speaker Paul Withers, Data Protection Manager, Walsall Council.
21/9/202110:00 BST2 hours
How Autumn’s income shocks will hit low income families The factors that have kept many low-income families out of poverty in the past year are changing, meaning many thousands will be worse off.

Families are set to be hit by big income shocks with the ending of furlough, the reintroduction of the Minimum Income Floor, the loss of the £20 a week Universal Credit increase and the ending of the Benefit Cap's grace period. New data analysis from Policy in Practice predicts significant losses for some families who will struggle to cope and who will need the support of frontline organisations to help them through.

In this webinar we will explore what the Autumn may bring for low-income households and how support organisations can work now to prevent hardship and prepare for an increased demand for services.

Join this webinar to learn:

- How much different households are set to lose when Covid supports are withdrawn
- What support tools are available for individuals and organisations
- Best practice advice from a frontline organisation

We will be joined by Monica Kaur from the Money and Pensions Service.
29/9/202110:30 BST1.3 hours
How Kent County and district councils collaborate with data to tackle poverty Covid has turned our world upside down. Many residents in Kent, as elsewhere, have experienced financial hardship whilst, for organisations, the pandemic has been the catalyst energising them to work differently.

In summer 2020 Kent Districts and Communities Recovery Cell set up a group to focus support to residents at risk or already experiencing financial hardship because of the pandemic. Residents unused to facing financial hardship suddenly needed help to navigate support and advice systems. The group knew that things are likely to get worse for Kent's residents before they get better as furlough ends and families who were just about managing are tipped over the edge.

In a first for local government, Kent county and district councils have boldly chosen to collaboratively share their data to get powerful cross-county insights that will drive their poverty prevention activity. The information will help them to target of a wide range of campaigns to residents such as employment support, free school meal take-up, public health interventions, housing initiatives and benefits take up.

Importantly, the project has transparency built in so that councils can very easily benchmark with each other to identify and share best practice in a safe, collaborative way.

Join this webinar to hear:

- Kent County Council's vision for greater collaborative working with districts
- Maidstone District Council's drivers for districts to collaborate with their data
- Folkestone and Hythe District Council's impact achieved so far from data-led poverty prevention campaigns

We will be joined by guest speakers, Zena Cooke, Corporate Director Finance at Kent County Council, Steve McGinnes, Director of Mid Kent Services at Maidstone District Council, and Jane Worrel, Revenues and Benefits Senior Specialist at Folkestone and Hythe District Council.
20/10/202110:30 BST1.3 hours
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