Savings Accounts and Health in Pregnancy Grant Bill

Baroness Ritchie of Brompton Excerpts

Tuesday 7th December 2010 Lords Chamber

[Baroness Ritchie of Brompton]

My Lords, I welcome the opportunity to contribute to this debate and, in particular, I would like to speak about those children for whom the state is the corporate parent, as many noble Lords have done.

In my own local authority, I am a corporate parent to these children in our care, and I regularly meet with them to hear about their achievements and successes, of which there are many, and their concerns and problems. The issue of money and managing their finances is a common concern, which was highlighted in the recent report by Demos for Barnardo’s, In Loco Parentis. I welcome the Government’s proposal to introduce a new junior ISA in 2011, which will enable some children to build up funds for the future. But children looked after will always find it difficult to save due to their circumstances. Some 48 per cent of children and young people in care are in care for more than three months; this amounts to some 19,000 children remaining in care for longer. These are the children who often do not have access to parents, grandparents or family to help them save for the future or to top up a junior ISA. I believe that we need to find a way of providing for these children in the future.

I declare an interest as lead member for children in Kensington and Chelsea, where we have already been contributing funds for our looked-after children who predate the establishment of the child trust fund by building up savings account for them, and we intend to continue to contribute to junior ISAs. We give them a statement twice a year so they know how much money they are saving; they enjoy receiving this statement, and it is a positive encouragement for them to continue to save throughout their lives. We are also looking at matching any pocket money that they contribute and are hoping that our foster carers will also either contribute or encourage their charges to save.

I think we can all understand that, for a young person, the knowledge that they have a capital asset, however small, can give them a positive view about their future and, as I have indicated, help them to learn about the management of money. As president of the National Children’s Bureau, I know that it runs a project which engages young people as money advisers to other young people. Anything that we can do to encourage young people leaving care to help and plan for their financial future should be encouraged.

As the noble Earl, Lord Listowel, mentioned earlier in the debate, only 8 to 9 per cent of young people who have been looked after are accessing higher education—albeit it is a great improvement, as he indicated, on the past. They will have access to grants and help with fees but some measure of financial independence would help them to buy the extras which are needed to fit into student life. As we heard from the noble Baroness, Lady Howe, around 90 per cent of 19 year-old care leavers were not in employment, education or training in 2009. There are many reasons why this may be the case, but it is not helped by the lack of financial support. Although care leavers receive a grant, it is, as has been mentioned, up to the discretion of local authorities, and it can range from £500 to £2,000. At a time when local authorities have to make substantial savings to help this country’s budget deficit, these payments could be under threat.

For young people leaving care, knowing that they have a fund which they own and can rely on, without any strings attached, would help to give them confidence to start out and the flexibility which many other young people already have. It would give them a measure of independence, perhaps to put down a deposit for a flat or enable them to buy clothes for interviews, or perhaps to travel in order to widen their horizons—all of which are things that many parents will provide for their own children. It would help young people who go into apprenticeships and internships where they receive little pay, or voluntary work when they are looking for jobs. Internships can be a good way for young people to find out what sort of career they want to go into, but often it is the young people who are supported by their families who can afford to explore these opportunities.

We hear that the abolition of the children’s trust fund will save £500 million. If the state were able to contribute to a looked-after child’s junior ISA, the cost, as we have also heard, would be around £6.6 million a year, which would include the £250 initial contribution and subsequent annual payments of £100. I believe that we need to send a message to our looked-after young people—that we value them and feel that they are responsible enough to own savings accounts; that we recognise that many of them feel that they face an uncertain future; and that we are trying in a very real way to mitigate some of the disadvantages that they have had to face in their lives. I therefore ask my noble friend the Minister if he will seek to find a way to give the children in our care a more secure financial future.