Is extending free school meals to 500,000 more children sensible?
How to spend money effectively.
The Government announced last week that all families eligible for Universal Credit will receive free school meals. 500,000 more children will be eligible for a free lunch.
It has been widely welcomed. The Children's Society said that this was a "practical, compassionate step that will make a real difference", while the Child Poverty Action Group said it was "fantastic news”. It was the #1 item on the BBC news website.
The Education Secretary said it was a "giant step" towards ending child poverty. That is dramatically overegging the pudding - the number of children in poverty will fall just 2% as a result of the announcement, from 4.3m to 4.2m, even with the generous treatment of free school meals for poverty calculations.1
The Prime Minister said that this was about "helping families who need it most". This is not the most accurate thing he has ever said. The families who need help the most get nothing from this announcement - they already get free school meals.
The cost of free meals for each child is £500 a year - £2.77 a meal - so the overall cost to the government will be about £250m. Getting press coverage this good for so little money makes this a great decision if the aim is good press coverage.
But it not so good if you want to tackle poverty. Universal Credit doesn’t just go to the poorest - it goes to many people who are affluent, and to some who most of us consider downright rich.
In-work Universal Credit payments are quite large, so that work pays, particularly in the South East, where benefits have to cover high rents. UC is “tapered away” - as you earn more, you get less. But you can be really quite rich and still get a little bit of universal credit before you lose it all.
To give a concrete example. The excellent “Turn2Us” benefits checker reports that someone with two children aged 13 and 11, paying £1800 a month in rent - the allowable amount in Surbiton - would get Universal Credit even if they earn £100,000 a year. I assume no childcare costs, no disabilities, nothing that would raise benefit eligibility. The IFS report that this family are in the richest sixth of the income distribution.
The government decided to spend £1000 to give this family earning £100,000 - who most people would describe as quite rich - free school meals. I don’t see how the PM can describe them as “families who need it the most”. The cost will fall on the general public who are typically a lot poorer.
My policy proposal is that the government should instead have…