The report sets out ways in which Government expenditure can be reprioritised to halve child poverty by 2010, meeting the challenge that the Government set itself in 1999.

Recognising difficult economic conditions and the severe pressure on public finances, the Barnardo’s/Deloitte report analyses how the 2008 10p tax rate Compensation Package - which has cost £2.7 billion this year - could be redirected to reduce child poverty by recycling resources already spent supporting relatively better off families.

Institute for Fiscal Studies modelling for the report concludes that the impact of the 10p tax rate compensation package on child poverty has been virtually nil so far.

The Barnardo’s/Deloitte report How to Halve Child Poverty suggests three policy options that would enable the Government to meet its target by changing the way in which child tax credits are paid so that they are reduced as income increases:
• Option one would lift 600,000 children out of poverty by increasing the child tax credit
• Option two would lift 700,000 children out of poverty by focusing the increases in tax credits on families with more three or more children
• Option three would lift 500,000 children out of poverty by giving extra support to families with new babies and those in work

All the above options have been modelled by the Institute for Fiscal Studies.

Heather Hancock, leader of Deloitte's public sector strategy practice and partner for the research said: "The government's commitment to halve child poverty by 2010 was recognised at the time as ambitious and challenging - and absolutely the right focus to address a problem that should concern everyone in our society.

“Deloitte's analysis has enabled Barnardo's to set out a range of viable policy options that can take the Government ever closer to delivering on that ambition.”

Barnardo’s chief executive Martin Narey said: “When the Government invested £2.7 billion to compensate losers of the 10p tax rate abolition, the benefit to families in poverty was, essentially, zero.

“Barnardo’s recognises that it would be glib to demand additional money be spent to meet the target at a time of economic difficulty. This is why we are encouraging Gordon Brown to be prudent and redirect existing resources to achieve his goal."

A copy of the Deloitte/Barnardo’s report How to Halve Child Poverty by 2010 is available here: www.deloitte.com/uk/howtohalvechildpovertyby2010.