The LGA view on preventing and reducing child poverty

The government has committed to reducing child poverty, both now and into the future, in its forthcoming strategy which is expected to be published in Autumn 2025. 

The LGA has been working with councils, stakeholders and government to contribute to the development of the strategy.  We are pleased that Ministers and officials have taken the time to listen to the sector and explore approaches to key issues including homelessness, family security, parental employment and financial inclusion.

It is important for councils to have the resources they need to help children experiencing of the immediate impacts of financial, social and material deprivation on children’s physical, social and emotional development and long-term life chances.  However, we also want to intervene as early as possible to prevent harm.  To truly address child poverty, alongside mitigating its effects, we must also take a wider perspective and recognise that children are deprived in the context of community and family poverty.  Tackling child poverty sustainably in the long-term means reducing socioeconomic and geographic inequalities and developing strong, inclusive local economies alongside more targeted support within specific local services.

Councils have highlighted that the devolution of funding and powers to local places provides an opportunity to take a more preventative approach to poverty and its causes, creating places that support prosperity and opportunity.

They have also highlighted the importance of ensuring that families and children can access prompt and effective help with adverse circumstances that intersect with poverty, including experiences of children’s social care, family breakdown, mental and physical ill health, disability, homelessness and reduced access to education and employment opportunities.

Councils are on the frontline of delivering both the wider determinants of health and wellbeing and many of the specific services that enable people to recover from the impacts of disadvantage and hardship.

The LGA has several key proposals to government, to ensure that councils are able to deliver these as effectively as possible:

Poverty prevention and mitigation may be identified as a specific local priority or embedded in existing local strategies. Broad and flexible national priorities – focused on shared outcomes – will enable councils to effectively tailor their approaches to local circumstances.

Preventing and mitigating poverty should be a key objective of effective Public Sector Reform.

The LGA will continue to facilitate shared learning through its networks and improvement offer.

The Joseph Roundtree Foundation’s UK Poverty 2024 report found that it has been almost 20 years since the last prolonged period of falling poverty, with the overall level of poverty barely moving since 2010. The report also found that poverty in the UK is deepening: In 2021/22, 6 million people – or 4 in 10 people in poverty – were in ‘very deep’ poverty, with an income far below the standard poverty line. More than twice as many (over 12 million people) had experienced very deep poverty in at least one year between 2017–18 and 2020–21.

Recent reforms and reductions within the benefits system have disproportionately impacted on families with children, in particular lone parents, large families and families with a disabled parent or a disabled child. Where these historical reductions in benefit provision have resulted in families not having enough money to meet basic needs, councils and other government departments then end up spending to address the resulting child poverty and its impacts. These impacts have been exacerbated by additional pressures such as the cost-of-living crisis and frozen Local Housing Allowance rates, which has left councils to pick up £1 billion in costs that they are unable to claim back from government over the past six years.

We appreciate the fiscal pressures that government continues to face, but councils and the LGA want to ensure that discussions on improving efficiency in the welfare system focus on investing in communities and expanding opportunity, and not simply on reducing spending.  Cuts in spending at the national level often emerge as cost pressures at the local level, harming outcomes in the process.  We have seen this clearly, for example, in the impact of reductions in housing costs support through the mainstream benefits system emerging as increased pressures on local homelessness and poverty prevention support, with record numbers of children in Temporary Accommodation.

Councils want to work with government to reduce child poverty and improve the long-term financial resilience of their communities. It is the LGA’s view that the national benefits system should provide the principal safety net for low-income households and those who are unable to work and cover the cost of households’ essentials. In this context, we welcome the Government’s commitment to strengthening opportunity and prosperity, and their cross-cutting approach to tackling the entrenched underlying causes of poverty, including making the links between family security and children’s outcomes. However, we are concerned that the proposals in the Pathways to Work green paper do not provide sufficient detail on the support that will be provided to households to mitigate the proposed reductions in welfare spending.  We appreciate that some of the proposed changes will not take immediate effect; it is vital that we ensure that we use that interim period to ensure that any reductions in financial support are accompanied by investment in choice and opportunity. Our concerns regarding the reforms are outlined in the LGA response to the Pathways to Work green paper. 

Aligned with our long-standing commitment to prevention, in our Spending Review submission, the LGA called on Government to review all welfare reforms to ensure that they are delivering their stated policy intent and are not preventing households from meeting their essential living costs. It is vital that welfare reforms deliver their intended outcomes and enable households to meet their essential living costs. A benefits system that is clear, fair and robust is a cornerstone of a long-term investment in our children’s futures and the socioeconomic health of our communities.

Research indicates that the removal of the two-child benefit cap would immediately lift around 500,000 children out of poverty at an estimated annual cost of £3 billion, representing an effective measure to tackle child poverty in the short term. With three in five households affected by the cap having someone in work, its removal will support working families while investing in the long-term prosperity of our communities. While we recognise spending decisions are subject to financial constraints, we are calling on Government to urgently consider the removal of the cap, as part its work to tackle the drivers of poverty. The LGA is of the view that the removal of the cap represents an effective opportunity to meet our shared objective to increase incomes and therefore must be a top priority in their effort to tackle child poverty through the benefits system. In order to tackle all poverty at its roots, there must be sustainable support for employment, education and housing as well as welfare.

We are pleased that government has recognised the vital role of community hubs, family hubs and other co-located neighbourhood-based services in its proposed approach to devolution.

A piecemeal and precarious funding landscape has made sustaining these services, which depend on establishing working relationships and co-location between multiple partners, extremely challenging. Service users regularly report poor accessibility, fragmentation and inconsistency as key barriers to resolving barriers to opportunity, for example addressing financial hardship, housing problems and employment support.

We are pleased that family hubs will be available to all areas, following the recent announcements made as part of the Best Start in Life strategy. We would like to ensure that the further roll out ensures that there is an outcome focused approach which ensures councils and their partners are able to develop integrated services that are flexible to support their local communities. 

Government must sustain and embed funding for advice services, signposting any emergency support that is currently provided through diverse funding streams. This will ensure that families in or at risk of hardship can access the help they need as quickly and simply as possible. The LGA has consistently asked for local welfare funding to be made long-term and sustainable. We are pleased that the new Crisis and Resilience Fund, which aligns the Household Support Fund and Discretionary Housing Payment, has been given a multi-year funding settlement to give councils and partners the opportunity to plan and embed services.

The LGA and councils would like to work with government, service users and stakeholders including advice providers to co-design a more preventative approach to local advice and support. This will be crucial to the effective delivery of new policy priorities including those proposed in the pathways to work green paper and the new Crisis and Resilience Fund. 

The LGA has been working with councils and partner organisations including Expert Link and Poverty Truth Network to gain a better understanding of people’s lived experience of seeking support and accessing services. 

User journeys highlight the impacts of complexity, fragmentation and variability in services on health, wellbeing and financial security.  Councils also collect and hold a wealth of information about the experiences of service users that they do not currently have the support or capacity to analyse more widely. These experiences should inform honest, challenging conversations of what we can do better and how the national policy framework must enable that.

The LGA would like to build on this work, in partnership with service users, government, stakeholders and strategic decision-makers in local government to ensure the knowledge and experience of service users and local communities informs service transformation and public sector reform.

Homelessness and housing insecurity can have severely detrimental effects on children and families as extended stays in Temporary Accommodation can pose risks to children’s safety and wellbeing. For children to thrive they need space to play and explore for their physical and social development.  Children are at greater risk of accident or injury due to overcrowding, particularly at night. Temporary Accommodation may lack adequate washing and cooking and food storage facilities, impacting on hygiene and nutrition. Problems with mould and damp can also impact children’s health. 

The quality and longevity of their housing security is subsequently vital to supporting children’s development and safety, and  it is imperative that the government supports councils to prevent and relieve homelessness where possible, including a reduction in the use of Temporary Accommodation to meet unprecedented demand, which as well as being harmful to families, is costing councils millions.   

Frozen Temporary Accommodation subsidy rates have left councils to pick up more than £1 billion in costs over six years that they are unable to claim back from government due to the gap between the rate at which housing benefit is paid out at the current Local Housing Allowance (LHA) rate and the rate at which the DWP reimburses this to councils at 90% of the 2011 LHA rate. 

The Spending Review included a very positive package of measures covering many of the issues we have lobbied on relating to homelessness prevention. The announcement of additional funding for the Local Authority Housing Fund (LAHF) is a positive step to provide vital additional homes to help councils address unsustainable temporary accommodation pressures. To further support councils, government should change outdated housing benefit reimbursement rules for temporary accommodation (uprating it to 90% of the prevailing LHA rate in order for councils to be able to recoup more accurate costs of the provision of Temporary Accommodation) and reconsider the decision to keep Local Housing Allowance rates frozen until at least April 2026. 

The recent Government consultations on the Homelessness Prevention Grant (HPG) and Fair Funding 2.0 propose changes to how homelessness is funded in local authorities. On the Homelessness and Rough Sleeping Grant (HRSG), the LGA's response to the HPG consultation broadly welcomed the approach of multi-year settlements, particularly for flexible use of funding in prevention and rough sleeping. However, there are some risks in the proposals particularly relating to Temporary Accommodation. In our response to the HPG consultation we identified a number of issues with the introduction of a ringfence within the grant for 2025/26 in the context of a growing Temporary Accommodation subsidy gap. The proposal in the FFR consultation to split the HPG between the Revenue Support Grant and the HRSG risks exacerbating those issues, which we outline in our response to the FFR 2.0 consultation. 

The LGA have recently published a Homelessness and Rough Sleeping Position Paper highlighting our key asks for government on Homelessness and Rough Sleeping in view of the upcoming cross-departmental strategy which can be found here in full. Within these there are particularly acute pressure points listed below that would support councils to be able to deliver the support needed, including;  

• Unfreeze and keep Local Housing Allowance rates at minimum in line with the bottom 30% of local rents alongside reviewing the shared accommodation rate and the benefit cap
• Uprate the temporary accommodation subsidy rate to 90 per cent of the prevailing LHA rate
• Pool funding for prevention at a local level. Long-term, flexible, multi-agency homelessness prevention budgets should be established
• Develop a cross-departmental approach to prevention with ending homelessness adopted as a clear national outcome across departments

These changes would support local authorities to tackle homelessness effectively, in turn helping to alleviate children and families from poverty. 

To reduce child poverty, government should focus on supporting parental employment. This can be achieved through devolved and integrated employment support.

• The LGA’s Work Local proposals aim to continually shape national policy around supporting adults, including parents, into the workforce through localised employment support. These proposals outline our long-term vision for devolved and integrated employment and skills services, providing a cost benefit analysis of the benefits for individuals, the local economy and the public purse.
• An effective employment support package can help parents return to work, and when combined with strong childcare provisions, it can reduce the risks of child poverty.

And these measures need to be paired with effective childcare to reduce child poverty: 

• Recent research highlights that low and middle income families in full-time work will still need to spend a high proportion of their earnings on childcare once the current system is fully rolled out. Families with multiple children and single parents will be hit particularly hard. A working family on £34k pa (at the 30th percentile on the household income distribution) would have to spend over 11% of their gross earnings to have one child in full-time childcare (40 hours per week). A family on £49k (the 50th percentile) would need to spend 8% of their earnings, while a family on £124k (the 90th percentile) would only need to spend 3.1%. As such, lower income families face stronger disincentives to work full-time, because the proportional costs of paying for childcare are so much higher.
• Therefore, we need to ensure that the system does not disadvantage lower income families.
• Ensure that childcare entitlements are funded in a way that ensures delivery of high quality early education and childcare and stops parents from being charged additional costs or not having the flexibility in using the funded hours in a way that they want
• Give councils the tools, resources and levers to effectively manage the market and ensure families are getting access to high quality early education and childcare.
• Review the criteria for access to funded entitlements. The LGA has suggested curbing the more generous offer to ensure that families that are in the bottom third of income distribution do not miss out on this essential support. At the very least, entitlements should be extended to parents and carers who are in studying and/or training. Entitlements should also be extended to foster carers and kinship carers, regardless of work or training status.
• Keep the vulnerable 2-year-old entitlement under review and ensure that the expansion of early years childcare does not have a negative impact on these children accessing high quality childcare.
• Review of the cost of childcare and early education to ensure that the funding rates will deliver what is required to support the Government to reach its goal.

Councils and partners have put in place a range of measures to help people on low incomes, and/or with low wealth and resources, to manage their money as effectively as possible.

The Household Support Fund (HSF) currently provides a vital source of funding to provide crisis support to families at risk of immediate hardship, both as cash-first support and as vouchers and in-kind support.  Anti-poverty charities including Trussell Trust, The Children’s Society and Joseph Rowntree Foundation highlight the importance of councils being able to offer this support. A recent report by Trussell Trust also highlights the wider socioeconomic benefits of ensuring that households are quickly supported to overcome financial crises.

HSF also contributes to local provision of advice and referrals that go beyond immediate crisis support to build financial resilience, for example through debt advice, welfare rights advice and income maximisation. Councils partner with financial institutions to improve access to affordable credit and with utilities partners to improve take-up of social tariffs.

We are pleased that government has maintained funding for local welfare support through the new Crisis and Resilience Fund (CRF), which brings together HSF and Discretionary Housing Payments (DHP).  However, it is important that we retain the best of these schemes, whilst taking the opportunity to identify priority need and design an approach that enables councils to meet local need.  Aligning these funds will be challenging as they are currently administered by different tiers in local government, with different rules and purposes.  We will work closely with DWP and MHCLG as they develop the new approach.  It is vital that this is informed by the experiences of residents, support organisations and councils.

Health and social care partners increasingly recognise the vital importance of financial wellbeing to enabling recovery and reducing disparities, and have broadened the use of money and debt advice within social prescribing.

However, the LGA had to lobby persistently for the funding of advice to be permitted within the use of HSF and, as a non-statutory service, the provision of financial advice and support is perpetually at risk and under-recognised as a service that can be beneficially provided as part of a financial relationship with residents, for example alongside benefits, housing and employment support.

The LGA would like to see proposals for funding and embedding advice provision and financial products and services for low-income households in all places as part of the child poverty strategy. Councils should have a key role in commissioning and / or delivering these services to ensure that they can be effectively integrated with local services as part of an integrated approach to improving health and wellbeing.

Families with no recourse to public funds (NRPF) continue to face hardship and difficulties accessing emergency support.  The LGA continues to call for ambiguity to be resolved, so that councils can provide support to these families, many of whom are at risk of extreme hardship, without jeopardising their asylum applications.

The LGA strongly supports national auto-enrolment of eligible children for free school meals (FSM). 

Government estimates indicate that automatic enrolment could capture the 11 per cent of eligible school children who have not yet taken up the offer. This equates to 215,000 school children in England, under the current eligibility criteria. 

Schools’ Pupil Premium funding, which enables schools to provide additional support for disadvantaged pupils, is currently linked to approved claims for FSM. We call for government to automatically provide pupil premium funding for all children who are eligible for FSM – regardless of whether they wish to claim a meal.

We welcome the 10 per cent uplift to the Healthy Start scheme announced in the NHS 10-Year Plan. However, this increase falls short of matching food price inflation since 2021, when the scheme was last uplifted. To effectively tackle poverty in the early years, we must increase the value of Healthy Start in line with inflation, implement auto-enrolment to ensure eligible families receive support, expand eligibility to reach more households, and extend free school meals to all early years providers.

In the meantime, councils have been implementing opt-out auto-enrolment (or ‘assisted enrolment’) at the local level, and the LGA has been working with partners and government to explore how this can be supported by the effective sharing and re-use of data. Local pilots have demonstrated the difference auto-enrolment can make to the local area, but they have also highlighted the bureaucratic challenges of a place-by-place approach, which include legal ambiguity, children attending school in a different local authority area and multiple data-sharing arrangements (particularly in two-tier council areas). 

Until national auto-enrolment is rolled out, the legal risk is borne by councils, and we would like to explore ways that this risk could be reduced or removed in the interim through guidance from Government.

Many councils currently use HSF to provide vouchers to low-income families in receipt of FSM during the school holidays.  This can consume a considerable portion of this funding, resolving an issue that is not s short-term crisis or need for advice, but an entrenched shortfall.  It is the view of LGA and councils that holiday hunger should be resolved in the long-term by ensuring sufficiency in the mainstream benefits system, for example through the removal of the two-child limit in Universal Credit. 

Recommendations on holiday hunger were made in the previous iteration of the Food Strategy, which we are pleased that the government is now reviewing. The Department for Education should take the lead on a voucher scheme, or similar, that is co-designed with councils as part of a wider implementation of the strategy’s recommendations.

Parents should not need to rely on discretionary funding, vouchers or parcels to ensure that their children do not routinely go hungry outside of term time. It is the LGA’s view that the Department for Education should lead on holiday hunger and malnutrition in an approach that is properly aligned with Free School Meals. We therefore welcome the recent announcement that funding for the Holiday Activities and Food Fund (HAF) has been extended for a further three years, supporting children from low-income families by providing them with nutritious food and enriching activities throughout school holidays.

We welcome the resources in the new Children’s Social Care Prevention Grant and note that it will be specifically targeted at new burdens in the Children’s Wellbeing and Schools Bill relating to the national roll-out of Family Help and that the £13 million uplift at the final settlement will be used to rollout mandatory Family Group decision making. This will limit local flexibility. 

We note that the Children’s Social Care Prevention grant will be distributed by a new children’s needs-based formula, which will allocate funding according to estimated need for children’s social care services. Individual councils will have views on the distribution method. We would ask for assurance that the new burdens represented by these duties will be fully covered. 

Councils need sufficient funding, powers and levers across the range of areas that will help the government ensure all children have the best start in life, particularly to deliver their statutory duty to ensure there is sufficient high-quality childcare and education and to enhance the workforce such as for health visitors.