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

3. INCOME INEQUALITY AND POVERTY IN SCOTLAND - WHAT THE EVIDENCE AND THE CONSULTATION TOLD US

Poverty

The key measure of poverty used by Scottish, UK, and European governments considers relative income. Those with incomes below 60% of the UK median are considered to be poor as their incomes are so far from the norm that they face problems participating effectively in society. The Scottish Government and its partners will continue to use that definition.

In 2006-07, relative poverty affected:

• Around 840,000 individuals - 17% of Scotland's population
• 210,000 children
• 440,000 working age adults
• 180,000 pensioners - around 20% of all pensioners in Scotland.

The evidence also tells us that of all households, those headed by lone mothers with dependent children are most vulnerable to persistent poverty, and by far the most frequent route out of poverty for working age adults is through well paid and sustained employment. The quality of employment people are able to access is therefore crucial, as is removing barriers to that employment.

To tackle poverty effectively we need to tackle it across the board. Poverty is most visible in disadvantaged communities in urban Scotland, but it is no less real in rural areas.

We do not see the same concentrations of deprivation, but it exists nonetheless and is often exacerbated by issues of isolation and accessibility. The quality of employment is a particular issue in rural Scotland, where employment rates are high but jobs are often low-paid, seasonal, part-time and in low productivity sectors.

We also need to direct our attentions not just to those who are in poverty now, but those who live close to the margins and are in danger of falling into poverty. That is why we have set a challenging target of reducing income inequality and increasing the income of the poorest 30% in Scotland. We are committed not only to dealing with the symptoms of poverty now, but to lifting people out of poverty in a sustainable way, and to tackling poverty's root causes over the longer term.

Income inequality

The Government's Solidarity target makes the commitment to increase the share of income received by the poorest 30% of the population in Scotland by 2017.

This group contains:

• 1,500,000 individuals in 850,000 families;
• 370,000 children;
• 370,000 pensioners; and
• 760,000 people of working age.

In 2006-07, these households collectively received only 14% of Scotland's income, whereas the richest 30% received over half. Families in the three lowest income deciles had an average weekly income of around £220, whereas those in the highest three received around £630 per week.

A number of countries, which are similar to Scotland in scale and geographically close, such as Finland and Norway have greater equality of income and significantly lower rates of poverty than Scotland. We need to continue to learn from them.

Much of the evidence gathered as we developed this Framework will be of interest to those engaged in action on reducing poverty and inequality. We will publish a summary of that evidence on the Scottish Government website.

What the consultation told us

We received 138 individual responses to our Discussion Paper on Tackling Poverty, Inequality and Deprivation in Scotland. We also asked the Poverty Alliance to hold a series of focus groups around the country, culminating in a major Ministerial event in Glasgow which was designed to ensure that those most directly affected had their voice heard.

Many respondents expressed the view that paid employment for those who can work is the most effective route out of poverty but emphasised that jobs had to be good quality, with good pay and an opportunity for workers to develop their skills and progress. Respondents felt that barriers to employment such as benefit disincentives and access to appropriate and affordable childcare would have to be addressed along with greater focus on promoting equality. We were also given some important messages about the perceived lack of responsiveness of public services to the needs of those who are living in poverty in Scotland.

A number of respondents also recognised that paid employment is not an option for everyone, and that those who rely on benefits should not live in poverty as a result. Many respondents felt that the benefits system and Jobcentre Plus did not effectively help people back into work or alleviate poverty. Of the many who expressed an opinion, a majority believed that poverty could be more easily tackled if control over the benefits system was passed to the Scottish Parliament.

The analyses of our consultation exercise can be found online at: http://www.scotland.gov.uk/Topics/People/Social-Inclusion/ConsultationResponse