Achieving Our Potential: A Framework to tackle poverty and income inequality in Scotland

2. INTRODUCTION

Why poverty and income inequality matter

We want a Scotland which is wealthier and fairer. We want to provide the opportunities - and the incentives - for all to contribute to Scotland's sustainable economic growth. All the evidence tells us that reducing poverty and the gap between the richest and the poorest support increased economic participation, improved social cohesion and stronger communities. By reconnecting large numbers of people in disadvantaged groups and communities to the mainstream economy, and encouraging work that pays fairly, we will help more people in Scotland to fulfil their potential; increase economic growth and participation in our labour market; and create greater social equity across Scotland.

We are clear that economic growth is about releasing Scotland's entrepreneurial and creative talents and sharing our increased prosperity to ensure that all of our citizens, whether in work or out, can flourish. That is why the Government made Solidarity one of the Golden Rules in our Government Economic Strategy and why it set the following target to reduce income inequalities in Scotland:

Our focus on poverty and income inequality reflects their importance to the life chances and outcomes of people in Scotland. We can only prosper as a nation if we remove the structural barriers that prevent so many of our people from prospering.

A fresh approach

Poverty in all its forms has blighted Scottish society for generations. We are determined to tackle the root causes of poverty rather than tinkering at the edges. Scotland can and must do better. Countries such as Finland, Norway and others have combined high levels of economic growth with significantly lower levels of income inequality than Scotland. They have shown that greater Solidarity is not just an outcome of economic growth, but a driver of that growth.

This is at the heart of our new approach. Delivering Solidarity will mean working across Government and public services in a joint national effort to create the conditions for more and better paid jobs in Scotland; to provide the skills needed to participate and progress in the workforce; and to remove the barriers that stand in the way of individuals realising their full potential. However, we must ensure that those who cannot participate in the labour market are not left behind.

Our National Performance Framework underpins this new way of working. The whole of Scottish Government and the public sector has moved to an outcome-based approach to performance. We are clear on our goals and how our progress to achieving these goals can be measured. Consequently, we have set the following National Outcome:

which will be tracked through a set of National Indicators, including:

and

This can only be achieved collectively. Our joint approach is founded on a new relationship of mutual respect and partnership between the Scottish Government and local government, as set out in the Concordat agreed in November 2007. Single Outcome Agreements now lay down our goals and targets including those for tackling poverty and income inequality for every area of Scotland. These have been developed between the Scottish Government and each local authority or Community Planning Partnership and they are critical to our approach.

This new flexibility for local partners and the move away from ring-fenced funding provides greater opportunities for local partnerships to develop policies and approaches which work in the local circumstances. For instance, the experience of poverty in rural areas differs in important ways to those in urban areas, and the services and responses put in place to deal with them must also differ.

We are committed to an approach which supports empowering people to make a difference to their own lives. We must adopt an approach that improves the capacity of individuals and their families to lift themselves out of poverty by developing their resilience. Tackling structural barriers is also important, for example market failures, unresponsive public services or prejudice and discrimination - that prevent people from accessing opportunities available to others.

How our policies work together

This Framework does not exist in isolation. It complements the Early Years Framework, and Equally Well, the report of the Ministerial Taskforce on Health Inequalities, all of which taken together form a coherent approach to addressing disadvantage in Scotland. There is a strong positive relationship between having the best start in life, enjoying good health, a good education, and having enough money to provide for yourself and your family. These approaches recognise these relationships. They set the context for future investment decisions for the public sector in Scotland, as over time we shift resources from dealing with failure to tackling its root causes.

This Framework has been developed in the context of our overall commitment to equality and tackling discrimination. Inequality and poverty are closely linked. We also remain committed to doing what we can to contribute to the UK target of eradicating child poverty by 2020. Our approach is based on the view that child poverty is best tackled as part of a broader effort to reduce poverty and inequality in Scotland, and that our income inequality target supports our focus on improving outcomes for our citizens.

What this Framework will do

This Framework builds on the good work already underway across Scotland and illustrates progress with actions in support of our shared objectives. On the basis of the available evidence and the response to our extensive consultation, the Framework sets out further priorities for action and investment to deliver improvement across four main areas:

• reducing income inequalities
• introducing longer-term measures to tackle poverty and the drivers of low income
• supporting those experiencing poverty or at risk of falling into poverty
• making the tax credits and benefits system work better for Scotland.

The Framework provides the context for future action while setting out some immediate steps. It sets out the ways in which the Scottish Government will support partners and strengthen the infrastructure necessary for successful action, and it sets out the contribution needed from wider Scottish society.