FERGUS FINLAY: We need to spend more money giving all children a better start

Tánaiste and Minster for Social Protection Joan Burton at UCC last week to announce awarding of the €4.5m New Jobs Ireland Contract to BDO Ireland.

Scrap the child benefit system entirely and start afresh, finding better ways to spend the money, writes Fergus Finlay

DEAR Tánaiste, I’m taking the liberty of writing to you because I want you to change your mind about something. I know it’s a promise you’ve already made, and you may feel that it might represent something of a loss of face if you were to abandon it now. But it’s not a huge change I’m asking you to make, and it could perhaps do a lot of good.

It was your colleague, Brendan Howlin, who announced in last year’s Budget that the Government had decided to increase child benefit by €5 per child, and that the Government hoped to repeat that again this year. Since then, I gather that the increase has been more or less agreed — it’s one of the “givens” we can expect from the Budget in a few weeks’ time. It will be an increase this year of €60 per annum per child.

What that means is that child benefit will go up to €140 per child. Now, don’t get me wrong. I welcomed the increase last year, because it represented a change in direction after several years of cuts. And I am only too aware that significant increases in child benefit can have a really positive effect on lifting children out of poverty.

I also believe in the concept of universal child benefit, which is based on the principle of every child having a right to a decent start in life. There is no greater antidote to child poverty than a good and decent start, and especially when it is based on access to the things a child needs most in his or her first years of life.

There is equally no doubt that child poverty is a huge — and growing — problem in Ireland. Most people who stop to think about it would accept that it’s a national scandal. Your boss, the Taoiseach, recently described the job of eliminating hunger and cold among our children as a moral imperative for any government.

Brendan Howlin
Brendan Howlin

When the government published its national policy framework for children a couple of years ago — Better Outcomes, Brighter Futures it was called — you set a target then to lift 70,000 children out of poverty. The most significant change that has taken place since that framework was published is that 30,000 children have actually been added to the number who live in deprivation. So the national target has had to be increased to 100,000.

That’s a number that shames us all. So it may seem a bit strange for me to suggest to you that we shouldn’t go ahead with a €5 increase this year.

But here’s the thing. Even for those of us who believe in universal child benefit, we’ve never had a proper debate about what was the right level of that payment. I’ve written here before that there is a strong case for a single payment, but that it should be set at a reasonably modest level, and that it should be topped up considerably for those families who need it more. Indeed, you set up a commission some years ago to examine the whole system, and they strongly recommended a two-tier approach. I gather that report has now been largely abandoned, and instead the Government is heading towards restoring child benefit to what it was.

But what I think most of us are beginning to realise is that you can’t tackle child poverty by using blunt instruments.

We need to spend more money giving all children a better start

As the president of the St Vincent de Paul Society put it in his foreword to their recent pre-budget submission: “Income increases, through wages or social welfare, are vital, but are insufficient to break the cycle of poverty. Services are necessary for the wellbeing of people and communities and long term sustained public investment is essential if Ireland is serious about tackling inequality, reducing poverty traps and supporting access to employment.”

Indeed, one of the striking things about the approach of Vincent de Paul is that they are not calling for an increase in child benefit at all this year — the subject isn’t even mentioned in their submission. Instead, they talk throughout about the need to invest in services. The three priorities they outline are the need to invest in social and private rented housing supply and access; the need to address energy costs and improving housing energy efficiency; and the need to invest in early childhood care and education for young children and after-school care services for older children.

Suppose you were to decide to leave child benefit as it is. It’s €135 per child per month right now. That’s about €31 a week or €1,620 a year. If you were to leave it at that, and decide that future additional investment would be in services for children instead, what could that mean?

Well, immediately you’d have €70m to spend on services, because that’s what the extra fiver is going to cost. That money would be more than enough to ensure that every child starting school would have all the books and equipment they need (as they do in England, Wales, Scotland, and the North). Imagine the boon that would represent to thousands of families struggling in the late summer each year. Or imagine the impact if the money was invested in ensuring high-quality childcare is more readily available.

And there would still be enough left over to enable you to double the amount that is given to schools to provide a mid-day meal for their kids. While that wouldn’t reach every school, it would certainly reach the schools that work in disadvantaged communities. Some of them have access to that sort of funding now, many do not.

We need to spend more money giving all children a better start

Or you could decide to spend the money you save on making sure that struggling families are able to heat their homes for longer this winter. No more than anyone else, I don’t know what sort of winter is in store, but I do know that there is no deprivation worse than a freezing or damp home. Not only do children and families suffer, but the cold and damp they experience results in such things as absenteeism from school and more visits to the doctor. €70m could go a long way towards fixing that – and it would ultimately save money too.

BUT my basic point, I suppose, is that we’ve got to find a better balance. If it were up to me, I’d want to scrap the child benefit system entirely and start afresh, finding much better ways to spend the same money (which runs into billions, as you know). But the bottom line is that while there are many homes in Ireland, for sure, where an extra fiver in child benefit will make a huge difference, there are many more where it won’t even be noticed.

If you decided instead to spend the extra money on services that could be targeted where they’re needed most, and use the existing administrative infrastructure to do it, you could increase the impact considerably. A bigger impact and better outcomes for families that really need it — as opposed to a negligible impact and no discernible outcome for the vast majority of families. Surely that’s worth thinking about, isn’t it?

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