Child poverty is costing Britain at least £25bn a year, the Joseph Rowntree Foundation reveals today.
Researchers have found that the government spends £12bn a year on services to remedy consequences of childhood deprivation such as poor health, low educational attainment, crime and antisocial behaviour.
The Treasury commits an additional £2bn in benefits and forgoes £5bn in taxes and national insurance contributions from adults who do not get jobs as a direct result of an impoverished upbringing. The economy loses a further £8bn from their lack of productive output, the foundation says.
The figures were calculated by Donald Hirsch, the foundation's adviser on poverty, who used economic modelling to identify which costs could be directly attributed to childhood disadvantage. He said his estimates were cautious and the full cost could be much higher.
Hirsch said: "Getting rid of child poverty will not be cheap. But the large amounts presently wasted on paying for the fallout from child poverty could be more productively employed in preventing it from occurring in the first place.
"This would bring a double benefit - for the families whose quality of life would be improved and for society, which would no longer have to pay to pick up the pieces."
The government pledged in 1998 to halve child poverty by 2010 and abolish it by 2020. For several years the policy appeared to be working, but the number of children living below the official poverty line increased by about 200,000 from April 2005.
The government has admitted, in internal documents, that it is unlikely to meet the 2010 target. After spending billions bailing out the banks in the financial crisis, it is likely to have less money for tackling poverty, which will increase because of the recession.
But Hirsch said any slackening of the target would store up greater costs. "The £25bn annual cost of child poverty can be seen as a clear justification for making strenuous efforts [to eradicate] child poverty, even if it takes considerable resources to achieve this end."
He said there was a time lag between spending money to cut poverty and reaping the economic benefits. But eradicating child poverty would have an effect that would last for generations.
The study states: "Nobody can measure adequately the cost in physical or emotional suffering of a toddler living in a damp or overcrowded home, or of a child growing up in a deprived community where hope of a better life is constantly crushed. Political commitments to ending child poverty are based on the idea that a rich economy in the 21st century should be able to ensure that every child grows up with opportunities and is able to participate in society."
According to Hirsch's estimates, child poverty adds £2.8m to the social services budget, £2.7bn to the NHS, £2.9bn to education, and £1.2bn to the police and criminal justice system and £2.5bn for other services.