Rising employment will do nothing to lessen the likely growth in poverty over the next eight years, suggesting the government should take a more targeted approach to employment programmes, according to the Joseph Rowntree Foundation.

Growth in jobs has tended to benefit households that were already comfortably off, the research found, raising average household incomes and leaving out-of-work households falling even further behind. This was because the extra jobs would often go to adults in middle-income families where one adult was already in work.

With social security benefits rising at best in line with the consumer prices index and wages likely to grow faster, relative poverty – measured as the proportion of households with a disposable income of less than 60 per cent of median income – was likely to increase for the rest of this decade, the foundation said.

Amid significant budgetary constraints, it urged the government to focus labour market programmes on workless households. “For labour market changes to make a significant impact, help for workers in low-income households, most of whom are workless, is needed.”

The researchers, along with the Institute for Fiscal Studies and Warwick University’s Institute for Employment Research, simulated likely changes to incomes, taxes, benefits and employment up to 2020.

They found that on present policies and with an assumption that employment would grow by 700,000 between 2010 and 2020, the child poverty rate would still rise from 19 per cent to 25 per cent.

The effect is largest for lone parents, where the poverty rate is forecast to rise from a little more than 25 per cent in 2010 to 40 per cent in 2020.

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