Tackling child poverty is a stated priority of the Scottish Government. Yet recent data has displayed little progress towards eradicating poverty and Scottish Government modelling now shows, with its current set of policies, the interim 2023/24 statutory targets are likely to be missed following a ‘deterioration in the macroeconomic situation’. [i]
The Child Poverty (Scotland) Act 2017 set out Scotland’s ambition through a set of child poverty targets,. This article looks at the data to understand why the progress hoped for has not been realised.
Why has there been little progress to date in tackling child poverty?
The most recent data shows that child poverty trend looks fairly flat (chart 1). The most recent period covers 2019-20 to 2021-22, and showed the number of children in poverty actually rising slightly compared to the previous period, matched by an increase in the total number of children in Scotland. This left the headline 2019-22 rate at 24%, the same as 2018-19 to 2020-21.
Chart 1: Relative child poverty in Scotland
Despite the fact that Scotland is the only part of the UK to have child poverty targets, Scotland does not particularly appear to be outperforming rUK when it comes to reducing child poverty. As chart 2 shows, whilst Scotland is towards the bottom of the pack when it comes to child poverty rates, other parts of the UK (the South East of England, Northern Ireland and the East of England) have had similar rates of progress over recent years. The data is quite volatile, but at the moment there does not appear to be evidence of Scotland forging a unique path.
Chart 2 – Child poverty rates across UK countries and regions
But what about the counter argument: in the absence of government policy, child poverty could have risen. Scottish Government analysis shows that they believe this would have indeed been the case? However, the point still stands that there is nothing in the data so far that shows Scotland setting itself apart from elsewhere in the UK, perhaps reflecting the point that many of the policies that Scotland have in place exist in a not too dissimilar form in rUK – for example Free School Meals and an equivalent to Scotland’s Best Start Grant. And whilst these may be less generous, it is seems that they are not different enough to show up in the aggregate poverty data.
However, this should be about to change. The Scottish Child Payment started to be rolled out in 2021. The 2021-22 data collection was the first year that Scottish Child Payment claimants were picked up in the data but over the next few years we would expect it to make more of an impact as the number of claimants and the generosity of the benefit has ramped up.
Looking at our own modelled estimate, we can see this emerging trend if we look out to 2023-24 with Scotland starting to diverge from those countries/regions of the UK that it was has recently been tracking alongside (Chart 3).
Chart 3 – Modelled estimate of the effect of the Scottish Child Payment on relative poverty rates in Scotland vs the rest of the UK
One potential issue is that the levels of Scottish Child Payment picked up in the most recent data look like an underestimate compared to the figures on admin data. There is always some disparity; it is widely known that the official surveys of income understate benefit receipt. However, the Scottish Child Payment figures look low, even once that known discrepancy has been taken into account. This may improve as years progress, and people become more familiar with the Scottish Child Payment. However, it is a concern and will need to be monitored closely.
Beyond the Scottish Child Payment
Since its initial introduction, the Scottish Child Payment has increased in value to £25 per week, and it is now available for every child who meets the eligibility criteria. Many charities and stakeholder groups have recommended that the Scottish Government increases the Scottish Child Payment to £40, but this has so far been rejected.
The Scottish Child Payment is forecast by the Scottish Fiscal Commission to cost £405m in 2023/24. An increase to £40 would cost in the region of £250m more for an additional 2.5 percentage point reduction in poverty. The modelling suggests this would have been enough to meet the 2023/24 interim target, but still leave poverty levels some way distant from the 2030/31 target.
Clearly, some new ‘game-changing’ policies are required. Along with social security, the most obvious place to focus attention is on earnings from paid employment. Both the 2018 and the 2022 tackling child poverty delivery plans had actions relating to employability, but the Scottish Governments most optimistic assumptions were only able to predict a 2 percentage point reduction in poverty[iii].
The decisions people make around work depend on many factors, and the jobs available to them can limit options. Childcare, transport, and skills are just some of the potential intervention areas, and for them to start adding up to significant impact, investment at scale will be required. It is likely that some additional social security interventions will need to be on the cards as well if there is any chance the 2030-31 targets will be met.
The unfortunate fiscal reality and the need to prioritise better
The recent Medium Term Financial Statement reminded us that, even with the current set of policies, Scottish Government is facing a budget shortfall in the coming years. Yet, child tackling child poverty remains a clear stated objective and it is difficult to see how the targets can be met without more money being invested.
The statement set out the Scottish Government’s intention to “prioritise the programmes which have the greatest impact on delivery”. Our experience from years of scrutinising government policy development is that cost-effectiveness analysis is often absent, often due to lack of internal capacity, skills and oversight of appraisal processes[iv]. In the 2022-23 progress report[v] , the Scottish Government estimated that they had invested £3 billion on programmes targeting low income households, with £1.25 billion estimated to benefit children over the year. Prioritising this list in terms of its cost effectiveness would be a first step in working out what needs to stay, and what could justify being dropped and reinvested elsewhere.
Remember that a cost-effectiveness analysis is not just about the number of children directly lifted out of poverty as a result (although that is a good place to start). It is also about other objectives, such as reaching those in the deepest poverty and moving them close to the poverty line, or investing in policies that help contribute to other government priorities, such as tackling climate change.
Evaluation evidence is also lacking. Six years on from the first tackling child poverty delivery plan, we should be seeing the results of which policies have been in place over that time. Robust evaluation which is able to isolate the impact of particular policies on child poverty is difficult to do, but without some evidence in this direction, objective prioritisation is a lot harder to do, if not impossible. A child poverty policy evaluation framework[i] was launched in 2023 and the 2022-23 annual report stated that there will be a review of progress after 18 months. Whether or not this framework will deliver enough, and come soon enough to make a difference in time to meet the targets, remains in doubt in our minds.
 Analysis of Scottish poverty in Scotland is based on multiple years of aggregated data, with three years of data the norm. Due to issues with collecting data during the height of the pandemic, data for 2020-21 is not usable and for the three year periods that contain the 2020-21 year, only two years worth of data is included. This is not ideal, but is a sensible approach to deal with this exceptional circumstance.
[iv] Fraser of Allander Institute (2022) Improving Emissions Assessment of Scottish Government Spending Decisions and the Scottish Budget, available here. Although the report was ultimately about emissions appraisal, many of the findings relate to appraisal across all policy areas.