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Wednesday, January 12, 2005

Baby Bonds

The introduction of baby bonds by the New Labour Government is a bizarre initiative that will do very little to tackle child poverty. Essentially, the fund is a long-term savings account for all children born on or after September 1, 2002. The Government will send parents a £250 voucher to open an account in one of 75 building societies or banks taking part - there will be an additional £250 for babies of parents earning less than £13,480. An extra Government payment will be made when the child turns seven; the amount is not yet determined. The cost of this measure is £1.33 billion over the next five years.

The problem is that this money will not have any immediate impact on the major issues facing children, including early years learning, poverty, the state of school buildings etc. Even as a long term measure it is flawed. When, in 18 years time the trust is cashed in at least half of the beneficiaries will need to use it to pay to go into Higher Education. It really is a case of the Government giving with one hand and taking away with the other.

It would be far better if this money was invested in children now. If the resource was made available for services then Wales' share would be £120m over 5 years. An extra annual amount of £25 million for school buildings could make some difference to the huge backlog faced by LEAs.

Ironically, on the day that the details of the scheme were announced it was revealed that funding for out-of-school childcare clubs is to be cut by almost two thirds. Thousands of working families across Wales rely on the clubs, which provide early morning and afternoon childcare. It may well be that the Welsh Assembly Government may be able to bridge the funding gap caused by the loss of New Opportunity Fund money, but I cannot help feeling that it is ironic that when there are clear present day needs for investment such as this, the Chancellor is failing to spend the money he has earmarked for children in the most effective way.

my thoughts entirely!! It seems a bit of an election bribe to me...
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