Research round-up: No shortcuts to Scotland’s child poverty targets

This week, the Scottish Government published their child poverty progress report for 2024-25. The report lays out what policies have been undertaken to reduce child poverty and estimates the impact of the main measures.

In March, new statistics showed that Scotland had not met its interim child poverty targets. The final targets, due in 2030/31, are compared to official statistics in the figure below.

Table 1: Child poverty rates and interim targets

Target	Rate in 2023/24 (%)	Change since 2017/18 (pp)	Interim target (%)	Final target (%)
Relative poverty	22	-2	18	10
Absolute poverty	17	-5	14	5
Low income and material deprivation	9	*	8	5
Persistent poverty	23	**	8	5

Source: Scottish Government
* The survey questions used to derive material deprivation statistics changed in 2023/24, so direct comparison with earlier years is not advised. Based on the previous questions used, material deprivation of children was 14% in 2017/18.
** Persistent poverty is averaged over four years. In the four years of statistics that were based on data from 2017/18, the measure ranged from 13% to 19%.

The Scottish Government is required in legislation to publish a final delivery plan covering April 2026 to March 2031, which we expect next spring. We also expect Scottish political parties to lay out their plans to reach the targets in their manifestos ahead of next year’s Holyrood elections.

In the run-up to all these policy plans, several new pieces of research have come out looking both at where policy has likely had an impact on child poverty and what policies could help Scotland to reach the 2030 targets. These include:

• Two of our recent reports analysing the potential impacts and costs of policy packages to meet the 2030 targets and recommendations made by the Minimum Income Guarantee Expert Group,
• Analysis of how much different policy levers and combinations of policies could do to reach the 2030 targets from the Joseph Rowntree Foundation (JRF), the Institute for Public Policy Research (IPPR) Scotland, and WPI Economics, and
• Analysis from the Scottish Government on how current measures impact on poverty through 2029/30.

We’ve read through everything to see whether there was consensus on where we stand currently and what needs to be done next. It’s clear that some pretty heroic measures will be needed to meet the 2030 child poverty targets, certainly much more than what is currently being done. The research demonstrates different combinations of policies that could reach the targets, but all will need significant investment from government.

Read on to find out the details!

A note on reporting – some people use the child poverty rate, and some talk about the number of children in poverty. The former is usually rounded to the nearest percent, and the latter to the nearest 10,000. Handily, there are about 1 million children in Scotland, so when we say that child poverty was reduced by 1 percentage point, that is roughly equivalent to 10,000 fewer children in poverty.

Current policies have offset tough economic conditions rather than making real progress

We have seen only slow progress towards the 2030 relative child poverty target – from 24% in 2017/18, when the targets were set, to 22% in 2023/24.

The Scottish Government estimates that in 2025/26, current measures on child poverty will keep 70,000 children out of relative poverty, reducing the rate of relative poverty by 7 percentage points (pp). This implies that, in the absence of these policies, relative child poverty would have risen quite a lot since 2017/18.

Depending on the methods and assumptions applied, Scottish Child Payment alone will keep 30,000-40,000 children out of poverty this year.

These impacts are set against the effects of the pandemic and the cost-of-living crisis. As a result, we’ve seen relative poverty hold steady rather than decline as hoped.

Current spending is not sufficient to reach the 2030 targets

The Scottish Government has modelled the impact of current measures in each year up to 2029/30. The rest of the modelling focuses primarily on 2030/31, the year the final targets are due.

Estimates for the rate of relative child poverty in 2030/31 after current measures are accounted for range from 19% to 22%, nearly double the target of 10%. These are similar to the relative child poverty rate Scottish Government modelling has estimated for 2029/30 given the current policy package.

Mitigation of the two-child limit, which has been announced starting in 2026/27, is expected to reduce relative child poverty by 1-2 percentage points on the baselines described above, similar to Scottish Government estimates for 2029/30. Among households with three or more children, mitigation is expected to reduce relative child poverty by 5 percentage.

Different pieces of research varied slightly, but all found that a further 8-11 percentage point reduction will be needed to reach the relative child poverty target by 2030/31. These estimates set out the size of the challenge, as well as the approximate size of the investment needed to meet the targets.

There is scope for higher incomes from work to reduce child poverty – but it can’t do all the work

One consistent point made throughout the academic and third-sector research was that raising parents’ income from work could make a difference, but that it will not be nearly enough to reach the 2030 targets.

All the reports look at variations on higher parental employment, more hours for parents who already work, and higher pay per hour. Some of the variations included:

• Putting 12,000 additional parents into work (which was a commitment Scottish Government made in their last child poverty delivery plan, but later removed funding for),
• Increasing employment rates for parents of younger children to meet those of parents of teenagers,
• Increasing hours for parents who work to full-time,
• Making sure that all parents are paid at least the Real Living Wage, and
• Raising hourly pay for the lowest-earning parents by 10%.

Some also modelled combinations of these, giving us a fair idea of how impactful some variant of raising incomes from work could be.

In the most optimistic scenarios (those that assumed big increases in parental employment, hours, and pay), improving parents’ incomes from work reduced relative child poverty by 6 percentage points. This is absolute maximum impact we’d expect, given that most parents that can work already do.

Less ambitious scenarios, or those that targeted only one or two of the three main levers here, were associated with reductions around 2-3 percentage points.

None of this is to say that putting parents into work, enabling them to take on more hours, or ensuring that they are paid more per hour isn’t game-changing for those affected – but it is important to understand the scale of impact that can reasonably be achieved by employability and labour market policies.

It’s also difficult to say exactly what specific policies would be needed to achieve any of these changes, and therefore what they could cost. Investment in employability programmes would be important for raising employment rates, and working with employers would be needed to achieve higher pay rates.

The elephant in the room when it comes to the cost of raising parental employment or hours is childcare. Limited access to affordable childcare is a significant barrier for parents; childcare responsibilities were named as a barrier to accessing training or work by 21% of NOLB participants over 25.

Again, it’s difficult to say what addressing this would cost. We’ve estimated that a big expansion of universal childcare could cost around £3.3 billion. With some different assumptions, JRF ballpark around £2.2 billion. A previous JRF report looked more closely at how a big expansion could work.

Changes to social security also have potential (with some caveats)

Given the estimated impact of the Scottish Child Payment, devolved social security is a strong option for reducing child poverty.

The Scottish Government has already committed to mitigating the two-child limit from March 2026. Mitigation will reduce relative child poverty by around 1-2 percentage points and cost around £200 million in 2030/31.

Recent research has also analysed increases to the weekly rate of Scottish Child Payment in isolation, the impacts and cost of which are shown in the table below.

Table 2: Impacts and cost of changes to Scottish Child Payment

Lever	Description/amount	Estimated decrease in relative child poverty (pp)	Estimated cost (£m, 2030/31 prices)	Source
Main SCP weekly rate	40	1 (JRF)	190 (JRF)	JRF & WPI Economics
		2 (WPI)	230 (WPI)
	55	3 (FAI)	514 (FAI)	FAI & JRF
		2 (JRF)	430 (JRF)
	75	4	740	JRF
	85	5	900	JRF
	100	7	1140	JRF
Per-household premium on top of main SCP weekly rate	£20 for lone parents	0	110	WPI Economics
	£20 for young mums	0	20	WPI Economics
	£20 (WPI) or £81 (JRF) for those with disabilities	1 (WPI)	90 (WPI)	WPI Economics
		1 (JRF)	360 (JRF)	JRF
	£20 for those with infants	0	30	WPI Economics
	£20 (WPI) or £30.30 (JRF) for all priority families	1	160 (WPI)	WPI Economics
		1		JRF
SCP take-up	Increase take-up to 100%	0	70	JRF

Source: Summary of results from FAI, JRF, and WPI Economics reports
Notes: Some differences in impacts and costs come from modelling the same amount in different years, which changes the amount after uprating in 2030/31. The FAI and WPI reports set amounts in 2025/26 prices; JRF uses 2026/27 prices.

There were also several reports that looked at more targeted options within the Scottish Child Payment. Per-household premia on top of the weekly Scottish Child Payment rate for priority households, who have higher poverty rates to start with, achieve modest reductions in relative child poverty (1-2 percentage points) at a lower cost than raising the weekly rate for everyone by a similar amount.

One key concern around increases to Scottish Child Payment is that, as the amount rises, households may opt not to increase income from work if that would risk their entitlement to qualifying benefits. Because Scottish Child Payment is a top-up benefit, there is no gradual withdrawal (tapering) of the amount received past a certain threshold – households either receive qualifying benefits and get the full SCP amount, or they get neither. We don’t yet have good evidence on labour supply responses to Scottish Child Payment, but it’s possible that if the SCP rate were raised significantly, the impact on poverty could be curbed by reductions in work.

Rent reform could make a difference, but changes to social security payments related to housing might not

Housing costs are an important part of costs for most households, particularly those in poverty. The main poverty measures are calculated after housing costs, and therefore account for the impact of those costs on households’ living standards.

Several organisations have modelled the potential impact of adjustments to rent paid by households in poverty or changes to the Local Housing Allowance (LHA), which governs how much support for housing costs households can receive in their benefits.

Rent reforms have some potential, with WPI Economics estimating a 2.5 percentage point reduction in relative child poverty if private rents paid by households in poverty were reduced to the social rent rate paid by similar households.

On the other hand, changes to LHA rates seem to have a negligible impact on child poverty.

Ultimately, a combination of approaches is likely needed to reach the 2030 targets

Reports by us, JRF, and IPPR Scotland have published analysis of policy packages targeted at child poverty.

In all three, combined changes to income from work and social security payments (primarily Scottish Child Payment) would do the heavy lifting. The policy packages that are estimated to meet the targets are summarised in the table below.

Table 3: Impacts of policy packages to reduce child poverty

Employment	Parents’ hours	Parents’ pay	Social security	Estimated reduction in relative child poverty (pp)	2030 targets met?	Source
40,000 more parents in work	Minimum 22-37.5 hours/week (depending on household structure)	Paid at least the Real Living Wage	Scottish Child Payment doubled	9	Missed by 3 percentage points	IPPR
All priority family parents except those with disabilities or parents of infants	30-35 hours per week	Paid at least the Real Living Wage	SCP premia for families with infants (£47), with disabilities (£76), and for single parents (£40)	6	Missed by 3 percentage points	JRF
50,000 more parents in work	30-35 hours per week	Paid at least the Real Living Wage	SCP take-up = 100	7	Missed by 2 percentage points	JRF
			SCP = £40
50,000 more parents in work	30-35 hours per week	Paid at least the Real Living Wage	SCP take-up = 100	9	Yes	JRF
			SCP = £40
			SCP premia for families with infants (£47), with disabilities (£76), and for single parents (£40)
Employment rate for parents of younger children raised to equal that of parents of teens	35 hours for those moving into work; increases for those already working	Paid at least the Real Living Wage	Increase costs LHA can cover	10	Yes	FAI
			SCP = £150
Employment rate for parents of younger children raised to equal that of parents of teens	35 hours for those moving into work; increases for those already working	Paid at least the Real Living Wage	Increase costs LHA can cover	10	Yes	FAI
			SCP = £115
			SCP premium (£40) for families with infants or disabilities

Source: Summary of results from FAI, JRF, and IPPR reports
Notes: Some differences in impacts and costs come from modelling the same amount in different years, which changes the amount after uprating in 2030/31. The FAI report cited here sets amounts in 2030/31 prices, while JRF uses 2026/27 prices.

These packages give a sense of the scale of action needed to reach the 2030 targets.

Many organisations, in these reports and elsewhere, have called for the Scottish Government to set out concrete plans to meet the 2030 targets in the final delivery plan next year. The Poverty & Inequality Commission has recommended that for each proposed policy, the Scottish Government should identify:

• Which groups will benefit,
• The mechanism by which the measure will reduce child poverty,
• The estimated impact on child poverty (where measurable), and
• How the policy’s impact could be maximised and measured.

It will also be important to understand what different policies may cost so their effectiveness can be weighed against budgetary concerns.

Changes to social security are somewhat easier to cost, while it is more difficult to estimate the cost of measures that would get more parents into work. We estimated a total cost of the policy packages in our report around £5.4-5.6 billion in 2030/31, over half of which was from providing universal wraparound childcare and after-school care. Adding up across measures, JRF’s policy package comes in around £2.4 billion. Some of the difference in costs comes from what’s included (for instance, we include additional public sector pay costs to the government) or from how costs are calculated for childcare and employability.

Issues of costs and cost-effectiveness will also need consideration from political parties preparing manifestos ahead of the Holyrood elections next year. Indeed, the JRF report is explicitly constructed as a toolkit for parties working out their proposals for tackling child poverty.

Final thoughts

Each of these pieces of research demonstrate that reaching the 2030 child poverty targets is a sizeable challenge, but also that they are achievable through strategic investment in different policy areas.

Getting people into work to tackle child poverty has been championed by both the Scottish and UK Governments, but even extreme scenarios for parental employment are not sufficient to meet the targets. Policies to get people into work are also expensive relative to options within the social security system.

Additionally, it is worth considering how realistic increasing employment or pay would be. Only 26% of parents ever supported through the No One Left Behind employability programme have entered work, although greater childcare provision could certainly help increase that statistic. Similarly, significant pay growth may not be achievable given that real hourly pay has stayed largely the same since 2017.

Nevertheless, there is consensus across a number of organisations that combining higher income from work with other policies, particularly social security, does have the potential to reach the targets by 2030. The caveat is that meeting the targets will not come cheaply or easily – significant investment is needed, which means difficult fiscal decisions ahead.

Regardless of the route taken, decisions should be informed by the expected costs and impacts of different policy options. We hope that the delivery plan next spring will need to lay out what impact policies are expected to have to credibly reach the targets, including modelling through 2030/31, and that parties campaigning in the elections will consider the evidence carefully before making manifesto commitments.

You can read more of our analysis of the child poverty targets here, and more on our modelling in this blog post and this report.