Giving his first keynote speech at a Children’s Society event, Mr Milburn said that the Government should spend more money on early years services for families, rather than on benefits.
He called for high-quality childcare and early years services to be the ‘foundation stone of a new approach to child poverty’.
Mr Milburn argued that the UK ‘significantly under-invests in childcare’, spending on average 0.5 per cent of GDP on childcare costs, compared to two per cent in Sweden and Denmark.
However, he said that OECD research showed that child poverty is lowest and social mobility highest in countries where parents have high quality, affordable childcare.
He said, ‘At the sharp end of that widening gap between rich and poor sit the most vulnerable: children. Today - if we use the best-known measure of the number of children living below a poverty line set at 60 per cent of median household incomes, the so-called relative poverty measure - there are 2.6 million children in poverty in our country. That is nearly one in five of all children. If we take a narrower measure, those living in absolute poverty, 1.4 million children are in poverty. Those figures should shock and shame us all.’
He said that using this measure, child poverty is ten per cent higher than some countries such as Denmark.
Mr Milburn said that social progress would not be met ‘without a heavy dose of realism’.
‘In my view the debate on child poverty today is consumed in a fog of fantasy and fallacy, of confusion and complexity. The fantasy is that the aim of eradicating child poverty by 2020, set by Labour and adopted by the Coalition, will somehow still be realised.’
Mr Milburn said that this target was not likely to be met, and child poverty was in fact set to increase.
‘The priority in my view for these next few years has to be children under five. That is where most effort and most resources should be focused.’
Anne Longfield, chief executive of 4Children, said, ‘4Children agrees with Alan Milburn that long term investment in life chances and moves to boost family income should not be seen as mutually exclusive.
"It is right and prudent to focus on achievable long term goals such as increasing life chances through early intervention, good early years provision and affordable child care, but these should buoy rather than dent our ambitions to reduce the levels of poverty experienced by millions of children every day. Spending on longer term outcomes should not be a smokescreen for forgetting that children are living in poverty today – if we allow this to happen we are looking at a lost generation of children whose life chances are simply going to be forgotten.’
Ryan Shorthouse, researcher at the Social Market Foundation, said that the UK in fact spends a lot of public money on childcare compared to the rest of the OECD.
He said, ‘But parents in the UK also pay, on average, significantly more from their own pocket. This is because childcare costs are particularly inflated in the UK.
'This is down to several reasons. We started from a lower base in terms of public funding and quality, so the regulations around quality are – understandably - quite strict in this country, for example, the child-staff ratios. In addition, unlike in other countries, there has been pressure on parents to start children in school as early as possible.
'This means the age group UK nurseries have to cater for is much younger, and thus they face tougher child: staff ratios.
'The lateness of public funding and the strict child: staff ratios mean the market is not that mature, with no big providers, and thus providers have limited profitability. This is driving up the prices too.’