This article is jointly authored by the Fraser of Allander Institute and the Joseph Rowntree Foundation.
Next week’s election will install a new Scottish Government that will face challenges that would have been unimaginable less than 18 months ago.
Yet, for many families in Scotland many of these challenges are not new. Insecure work, mounting debt and worrying about how you, and those close to you, are coping are regular features of the lives of the one million people in poverty in Scotland.
Scotland has stretching targets to significantly reduce child poverty – first to less than 18% relative child poverty by April 2024 and then to less than 10% by 2030/31. Even before the pandemic we were well off course from meeting these targets and we have not yet seen the full extent of the economic shock that Covid-19 has caused.
There is clearly a shared will amongst the parties to drive a strong recovery from the pandemic and broad consensus that going back to life before the pandemic is not desirable, particularly when considering the high levels of poverty, especially child poverty, in Scotland.
This consensus is reflected across the manifestos, with all committing to a more generous social security system and significant pledges to build more social housing. This article looks across the manifestos to review action on the three main policy areas that can make the biggest difference to poverty in the here and now to tackle poverty: social security, work, and housing. Importantly, we ask whether there is enough to effectively deal with the impact of the pandemic and to meet the interim child poverty targets due this parliament.
Strengthening social security
Both JRF and FAI analysis prior to the election campaign showed that only significant rises in social security support for low-income families would put us back on course to meet the interim child poverty targets. FAI’s article from last week sets out the headline manifesto commitments on devolved social security.
It’s worth pausing on a couple here.
Every manifesto now commits to at least doubling the Scottish Child Payment to £20 per week per child in the next Parliament. JRF’s analysis from March showed, however, that the Child Payment would need to at least double to meet the interim targets when combined with significant additional action. Without any other action the child payment would need to increase to £40 per week per child. FAI and Manchester Metropolitan University analysis (a preview of which is available here) came to the same conclusion, and looking ahead to the final targets, found that social security would be a very expensive and inefficient way to meet the final targets. Combining social security support with other policies on work and housing is crucial for sustainable and effective policy on child poverty.
There is also some ambiguity as to when the doubling of the Scottish Child Payment will take place. Clearly for it to have any impact on the interim child poverty targets it will need to be in all eligible families’ pockets well before April 2024. The “all” is important too, underlining the importance of efforts to ensure all those who are entitled to the payment get it.
The concept of a Minimum Income Guarantee also features in a few of the manifestos, based on the concept that there should be an income floor below which no-one should fall. JRF polling before the election showed strong public support for such a concept but the current commitments do not provide any detail as to what this would mean in practice. This includes any explanation of what the ‘minimum’ should be set at or how it will work alongside the reserved benefit system where features such as the five week-wait for Universal Credit and sanctions can leave people without any income. The issue of sanctions is particularly problematic given that the Scotland Act 2016 explicitly prevents the Scottish Parliament using its powers to ‘simply offset a reduction, suspension or non-payability in a reserved benefit’[i].
There would have to be more detailed consideration of what a minimum income guarantee is and how it could be provided in order to understand its implications for poverty, and particularly those who are at higher risk of poverty who currently have more tailored support, such as people with a disability.
That being said, policies with transformational potential will most likely be needed to meet the child poverty targets. Comparing the levels of support provided by Universal Credit, for all household types, to JRF’s Minimum Income Standard shows the gulf between that measure of a decent standard of living and that provided by the current social security system. Whilst a more secure and generous social security system would make an impact on poverty, significant changes to the social security system of course will require strong public buy-in to the concept, means and cost of such a system.
If the furlough scheme comes to an end at the end of September as expected then most predictions are for unemployment to peak shortly afterwards. The extent to which this will be short lived as the economy readjusts is, like most things related to the economy at the moment, very uncertain. Job creation and employment support are therefore prominent in the manifestos.
This is an area where UK, Scottish and local government are all involved, and it can therefore be difficult to look at manifesto proposals in isolation without considering how the whole system fits together.
All the parties recognise that young people may have the most long lasting ‘scarring’ from being without jobs at this time, and hence a lot of policy proposals are aimed at those under 25. In reality, every age group is likely to be affected, and there is less detail on groups that we know are at higher risk of poverty, with the notable exception of people with a disability where there is recognition from many parties that more needs to be done to overcome the barriers they face, irrespective of economic conditions.
However, there are a number of aspirations put forward by parties around promoting ‘good work’, retraining, and investment in new jobs which could benefit all. Ensuring that high risk groups, such as lone parents and minority ethnic groups, access these new opportunities will be key if they are to help tackle poverty.
A job in itself does not guarantees financial security. A sufficient combination of hours, pay and regularity is required to bring in adequate income and security. Likewise having a degree of certainty over things like work-rotas and contract lengths is crucial for those at high risk of poverty, such as lone parents and those with caring responsibilities, to be able to organise their lives to enable them to work.
Many of the powers related to work, for example employment law and minimum wage setting, are reserved to Westminster but the manifestos all include a range of policies which may help. All parties support the current rollout of 1,140 hours of funded childcare to all 3- and 4-years-olds. The parties have divergent views on whether, and to what extent, funded childcare should be extended to other age groups or for more hours, including for wrap around care for children of school age. There are also a range of proposals around social care and carers allowance, some of which could support unpaid carers and open up more possibilities for paid work.
In 2019, JRF’s annual Poverty in Scotland[ii] report demonstrated the contribution of social housing to poverty, particularly child poverty. Keeping housing costs down, retaining a bigger social housing sector and ensuring fewer low-income families lived in the expensive private sector meant Scotland had a child poverty rate 6 percentage points lower in Scotland than the UK (at that time – it has stretched to 7% since).
This evidence is reflected in a commitment across all the party manifestos to boost the delivery of new social housing. There appears to be a consensus in Scotland amongst the political parties that affordable and particularly social housing, has a key role to play in Scotland. The rationale given for this is varied and broad, from delivering the right to an adequate home to facilitating progress around ending homelessness, reducing fuel poverty, responding to the climate emergency, supporting the recovery, especially the growth in ‘green jobs’ and reducing child and adult poverty.
While the principle that more social housing should be provided is firmly established in each manifesto, each of the parties differ in the scale of their ambitions, ranging from 70,000 to 120,000 new social homes being pledged over the next two Parliamentary terms. How the parties would fund their social housing programmes (and ensure the investment delivers the right size, accessibility and quality of property, in the right places) is not always as clear and there is a similarly large question mark over how to fund the significant retrofit programmes planned by most. There is little detail too on how to achieve a reduction in fuel poverty at the same time as improving the energy efficiency of homes and heating them in new ways. Many who work in the social housing sector are worried about the diminishing return to tenants in terms of lower bills, in meeting proposed new standards.
We might not expect that level of detail in a manifesto but the extent to which the costs of both – increasing supply to meet demand and reducing emissions – fall on tenants and low-income home-owners through rent increases, green loans and higher energy costs, rather than being financed through public investment will be critical in determining a just transition.
There is also considerable consensus around ending homelessness across the manifestos, although only a couple of the parties focus in on the high numbers of children in temporary accommodation and on social housing waiting lists. A remaining question is how policy can deliver for them beyond boosting supply in the medium term.
What is striking is not just the high-level consensus around key areas like energy/ emissions reduction, homelessness, the need for more social homes, even land reform, but what isn’t addressed. The economic impact of COVID is going to be felt for a long time and there are significant numbers of low-income households struggling to keep their heads above water, burdened by COVID debt and arrears (rent and household bills).
As already mentioned that there is a consensus that more social homes are needed, but will there be extra support put in place to ensure that no-one loses their home in the short to medium term? Not doing so may risk adding to the pressure on housing and homelessness services that every party has recognised as a key priority. While there was evidence of a long term commitment to a more balanced housing market, there was a lack of specific commitments to help tackle rent arrears and COVID debt, preventing unnecessary evictions while the economy recovers. There are a number of ways this could be achieved, for example, through offering dedicated non repayable grant funding and improved access to specialist money, housing and debt advice.
As mentioned at the beginning of this article, there is an apparent consensus among the main political parties that there needs to be additional action in the next parliament on poverty, and particularly child poverty.
Whilst there are some solid commitments, other proposals do not yet have enough detail to understand the implications, and nor is there certainty on the funding requirements. There will no doubt need to be reprioritisation of spend if all the proposals in the manifestos are to be met, and understanding the impact of the reduction in spending elsewhere must be part of the overall poverty impact assessment for the next parliament.
Social security is a direct means of tackling poverty, but it is expensive and doesn’t necessarily secure the best outcomes., Crucially the best means of keeping that cost down is to ensure that we have a labour market that provides adequate incomes to those with jobs and to provide good quality, affordable housing. Arguably more importantly, good work and good housing can also transform people’s lives improving income, health and general wellbeing.
The same is true in the short-term. Without significant efforts to boost incomes and keep costs down social security spending will be required to make up the difference to meet aspirations such as the child poverty targets.
The pandemic is likely to throw up more challenges, both for households and policy makers. It is worth reiterating that analysis from both FAI and JRF shows that meeting the interim child poverty targets in 2023/24 is possible with devolved powers. However, from a review of the manifestos, it is clear that more will be required than what is currently pledged in these manifestos to get us there.
[i] Scotland Act 2016 available: https://www.legislation.gov.uk/ukpga/2016/11/contents/enacted
[ii] Poverty in Scotland 2019, JRF: https://www.jrf.org.uk/report/poverty-scotland-2019