Today a new set of headline statistics on household incomes and poverty were released, covering the financial year 2022-23. Data with a lag of nearly a year is not ideal, but it’s a really valuable dataset nonetheless. We’ll return to some of the broader headline messages later in the week, but this short summary focuses on the child poverty statistics. As most readers will know, Scotland has a set of targets on child poverty set in legislation and the 2022/23 figures will give a good indication of whether Scotland is on track to meet the interim targets for 2023/24.
First a technical note. Data on incomes on poverty in Scotland is usually presented as a three year average. The pandemic severely affected the quality of the data in 2020/21, and Scottish Government analysts have advised that it should not be used. This means that for any three year period that includes the year 2021-22, there are only actually 2 years of data used to produce an average. However, the child poverty targets are based on single-year data and for the sake of brevity, we’re going to focus on single-year data in this summary but you may see others quote the three-year average (which is actually a two-year average). Definitely not at all confusing is it?!
2022/23 is the first years worth of data post-pandemic, and the support available during the pandemic (furlough payments and the £20 uplift to Universal Credit) had been fully withdrawn by this point. This is worth bearing in mind when comparing data to the previous period, as some of the changes will reflect the loss of this support, and not necessarily changes to income and poverty driven by ‘normal’ factors. That was second technical note. I can’t promise that there won’t be more.
What do the stats say?
The Scottish Government have four targets on child poverty: relative poverty, absolute poverty, low income and material deprivation and persistent poverty. Descriptions and latest results can be found on this handy webpage, published by the Scottish Government.
In summary, the data on three out of the four measures is going in the wrong direction. Persistent poverty is the only indicator where there has been an improvement on last year’s data, and that fall is relatively small. In terms of the trend (based on the rolling average) across all measures, progress can best be described as flat.
What impact has the Scottish Child Payment had?
The Scottish Child Payment was in full swing by 2022/23. As a reminder, the first payments began in February 2021 at the rate of £10 a week for each child under 6. In November 2021, the payment was doubled to £20, and a system of bridging payments was introduced for children between 6 and 16 ahead of full roll-out. In November 2022, the payment increased to £25 and eligibility was formally extended to all under 16s.
The 2022/23 period covers the increase to £20 for under 6s and should capture the bridging payments. Anyone interviewed for the survey after November 2022 would fall into the period of formal roll out for under 16s, and the increase to £25. Exactly how the DWP statisticians will have made allowance for all these changes may require a bit of digging around in the small print. But we can say with confidence that the 2022/23 figures should reflect at least some of the impact of the Scottish Child Payment, but perhaps with more to come in 2023/24.
In order to see the impact, the most straightforward thing to do is to compare Scotland with the rest of the UK where there was no Scottish Child Payment. For the time being, we’ll have to make do with the whole UK average until we have the time to trawl the regional tables, but this should give us an indication of whether the Scottish Child Payment is having an effect.
The relative child poverty rate in both Scotland and the UK average rose in 2022/23. In terms of the trend over time, it looks fairly flat. Certainly we are not seeing a divergence of Scotland away from the UK average and a cynic would perhaps say it looks like the opposite may be happening.
Chart: Relative child Poverty in Scotland and the UK (single year data with 2020/21 removed)
Source: Family Resources Survey
Why is this the case? We know that take up to the Scottish Child Payment has been substantial. It will take some time to get to the bottom of it. One explanation is that the survey method is not picking up people on the Scottish Child Payment in the normal way. Or it may be that other elements of changing incomes in Scotland are offsetting the benefits of the Scottish Child Payment.
Are we on track to meet the interim targets?
At the moment, it does not look like the interim targets will be met. 2023/24 is nearly at an end, and apart from some additional people on the Scottish Child Payment coming through following on from full roll-out, there have been no additional policies in 2023/24 that will have made a difference to the figures.
This comes hot on the heels of the Climate Change Committee (CCC) earlier this week stating that they no longer believe that the Scottish Government will meet its statutory 2030 target on climate emissions.
The CCC placed blame firmly on Scottish Ministers for not following through on their ambition with action on the ground, with electricity decarbonisation the only area where sufficient process has been made.
There are parallels with the the state of progress on Child Poverty. Both have seen significant progress on one key element (electricity decarbonisation and the Scottish Child Payment) but beyond that, plans and actions fall short of what is needed. There are also clearly risks with putting so much resource into one policy.
One thing to consider is that perhaps the only reason such progress has been made on these issues is because of the ambition set in place by the targets. But equally frustrating for many will be that progress has only been limited to these bit ticket items without the requisite broad system change which is required to meet the targets. And there will be no penalty to the Scottish Government for failing to meet the legally binding targets that it has set itself. Whilst no doubt the Scottish Government will seek to shift blame to Westminster cuts, there is no doubt that this is a failure of government and calls into question the usefulness of using legislation (and valuable parliamentary time) in setting targets that then aren’t met.
Authors
Emma is Deputy Director and Senior Knowledge Exchange Fellow at the Fraser of Allander Institute