Trying to get economists to agree on anything is a folly as we all know. But sometimes a disagreement is closer to agreement than first appears.
The Fraser of Allander Institute has recently worked with Save the Children and the JRF to provide an assessment of the effectiveness of the actions in the Scottish Government Tackling Child Poverty Delivery plan, published in March 2022. This was the second plan published by the Scottish Government, and following on from promises made in the first plan in 2018, it included a set of figures that quantified the impact of some of the actions in the plan.
We looked at these estimates and provided a best estimate of what we think the impact will be of these same policies. Our modelling results produce a poverty figure slightly above that of the Scottish Government – that is, we find that the impact lower than the Scottish Government.
This result will not be surprising to anyone who has read the annexes of the Tackling Child Poverty Delivery Plan. The analysts who produce these annexes, with welcome transparency, note in a few places that the modelling assumptions are “optimistic”. Broadly, we come to the same conclusion.
However, the language in the main report, whilst vague, does imply that the interim targets will be met, with child poverty estimated to be “around 17%”. The modelled output from our analysis finds that child poverty will fall to around 19% by 2023-24, which implies instead that the interim targets may not be met. So despite being marginally different, the two estimates do have different implications in terms of whether the government will meet legislative requirements.
Who is right? No-one probably.
Given the huge upheaval going on in the economy right now from Covid – 19, Brexit and the war in Ukraine, the only thing that any analyst would put money on is both of those estimates being wrong.
So why bother doing this modelling at all? Overall this modelling is very helpful as it shows that the government have produced actions which (along with a helpful nudge in the right direction from some recent UK Government UC reforms) are capable of shifting the trajectory of child poverty downwards. Had they not done this, Ministers and officials who were developing the plan would have had little idea whether they were doing anywhere near enough to make an impact on the figures.
However, If Scottish Ministers are looking at the 17% projection produced by their analysts and thinking they can sit back safe in the knowledge that the interim target on relative poverty will be met, then this would be the wrong interpretation. Some additional analysis which used a set of more pessimistic assumptions may have set the scene better and made all aware of the sensitivity of certain assumptions. Based on this understanding, doing a bit more could have been a wise course of action. And of course, there is another set of targets to reach by 2030/31. Any overshooting of the interim targets would help shorten the distance to those targets which will be extremely challenging to meet.
More consensus would be a good thing
It would be helpful moving forward to have more consensus in approach to how quantitative estimates will be produced to improve confidence in the modelling. Ideally, this would set clear expectations on how assumptions are used so that all can agree that a reasonable course of action has been taken in developing the model. There is no requirement for the government to do this, and it would take time and resources, but it could improve social policy modelling across the board and prevent marginal quibbles taking centre stage when there are bigger questions to answer – not least how to make policies on paper effectively translate into change on the ground. The report out today provides some key reminders of what parents are saying needs to happen to make meeting the child poverty targets a reality.
The report can be accessed on the JRF website: link here