Shock report:

Shock report: cuts to have a 'catastrophic' effect on child poverty

Unicef warns UK that more children face life of poverty

The Government's spending cuts will have a "catastrophic" effect on British children, a UN agency has warned, endangering their future health, education and employment.

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Labour's success in cutting the number of children growing up in poverty could be reversed, according to Unicef. Britain did better than many other rich countries in protecting children from deprivation after the financial crisis erupted in 2008, Unicef said in its annual "report card" on 35 developed nations. But it warned that the Coalition's cuts to tax credits and freeze on child benefit will reverse this progress.

"We know that the number of children living in poverty in the UK is set to increase due to spending cuts," said David Bull, the executive director of Unicef UK. "This will be a catastrophic blow to the futures of thousands of children, putting at risk their future health, education and chances of employment.

"One thing is clear: government policies to tackle the deficit must not harm children. There is only one chance at childhood – we cannot see a generation, growing up in austerity, denied the chance to fulfil their potential."

Today Nick Clegg will answer the Government's critics by extending the provision of 15 hours of free childcare each week. Almost 1,000 two-year-olds from the most disadvantaged backgrounds, who were due to start receiving free pre-school education from September next year, will now be eligible from this September. All three- and four-year-olds are already eligible for 15 hours of free early education a week between 8am and 6pm. The hours will now be extended to 7am-7pm and parents will be given the option to spread their nursery place over two days rather than three.

Under the Child Poverty Act passed by Labour, the UK's relative child poverty rate is due to be halved to no more than 10 per cent by 2020 and absolute income poverty (defined as living on an income below 60 per cent of the median, about £26,000) cut from 20 to 5 per cent. But Unicef warned that the figures could reach 24 and 23 per cent respectively by 2020 – well short of the legally binding targets, even though they have been adopted by the Coalition.

Unicef's report said the previous government achieved one of the largest reductions in child poverty by providing tax credits, cash transfers and accessible public services. But it said that the UK now has a higher rate of child deprivation than Iceland, Ireland, Sweden, Norway, Finland, Denmark, the Netherlands and Luxembourg. Unicef's league table takes account of whether children have access to 14 items including three meals and fresh fruit and vegetables every day; books; outdoor leisure equipment such as a bicycle; the internet and the opportunity to celebrate special days such as birthdays.

The UK has a higher percentage of children in poverty (12 per cent) – when defined as households with income lower than 50 per cent of the national median – than 21 of 35 economically advanced countries surveyed.

In Britain, 800,000 three- and four-year-olds already enjoy up to 15 hours of free early education every week. Ten areas will trial the entitlement for two-year-olds from this September: Blackpool, Cornwall, Greenwich, Kent, Lambeth, Lancashire, Newcastle, Northamptonshire, Peterborough and Rotherham.

Mr Clegg said: "We're revolutionising the early start our children get in life – there will be more free childcare, it will be higher quality, and it will be more flexible for parents. "Every child should have a fair crack of the whip from the start and be able to go on to fulfil their potential."

* Labour claimed last night there is a £9bn "black hole" in the welfare budget due to higher than expected spending on jobseeker's allowance and housing benefit. It blamed the "failure" of the flagship Work Programme, under which private firms and charities are paid to get the jobless back to work.

Chris Grayling, the Employment minister, dismissed Labour's claim as "nonsense." In a speech marking the programme's first anniversary today, he will admit that providers are finding the task "more challenging than expected" but insist the scheme has made "a decent start". He will warn under-performing providers that they will lose contracts.

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