Best Start, Bright Futures - tackling child poverty: progress report 2023 to 2024

Ministerial foreword – Cabinet Secretary for Social Justice

Eradicating child poverty is the defining mission of this government, and we remain committed to doing everything we can within the scope of our powers and limited budget to finally end child poverty in Scotland. As we pass the mid-point of Best Start, Bright Futures, this report demonstrates the considerable action we have taken in the two years since our ambitious plan for Scotland was published and where we need to go further and faster.

While we have undoubtedly made progress, we have had to make difficult decisions to prioritise investment where it is needed most. In 2023-24 we faced one of the most challenging budget settlements since devolution, with the block grant worth 4.8% less than it was the previous year – and the ongoing requirement to prioritise our limited resources to mitigate the impact of UK welfare policies such as the Bedroom Tax and Benefit Cap. Families have also continued to bear the brunt of the cost of living crisis, and are still paying far more for essential goods and services than they were – pushing budgets to breaking point.

Despite the considerable pressures faced, we have continued to make progress in delivering the ambitious actions outlined in Best Start, Bright Futures. Of the 108 actions reported on this year, 60 are complete or delivering at scale, an increase of 20 from the same time last year. We have also continued to increase investment which benefits children in low income households to almost £1.4 billion – rising from £1.25 billion last year.

Across 2023-24 we have continued to provide immediate support to families through investment in the likes of our ‘game-changing’ Scottish Child Payment, awarding almost £430 million to families, and by mitigating the Benefit Cap as fully as possible within the scope of devolved powers. Having already increased our Scottish Child Payment in value by 25% from November 2022, we increased the value of all other Scottish benefits by 10.1% from April 2023, ensuring that they kept their real terms buying power for families. As a result of our decisions to protect the most vulnerable, our total investment in social security benefits and payments increased to an estimated £5.3 billion in 2023-24 – over £890 million more than is received from the UK Government for social security.

We also took key steps to build on our progress to date and to strengthen the foundations for future progress. We widened eligibility for Best Start Foods, removing income thresholds from qualifying benefits so an estimated 20,000 more children and pregnant women can benefit. While key powers over employment remain reserved to the UK Government, we strengthened our Fair Work First conditionality requiring all public sector grant recipients to pay at least the real Living Wage from 1 July 2023, ensuring we maximise the impact of public investment. We also continued our place based collaborations with Glasgow, Dundee and Clackmannanshire, focused on providing immediate support to families and delivering transformational change in the longer term.

Important milestones were also achieved. The Verity House Agreement cements the shared focus on child poverty as one of three shared priorities with Local Government, and the passage of the amended United Nations Convention on the Rights of the Child (Incorporation) (Scotland) Bill, will help to ensure that children’s rights are respected, protected and fulfilled under Scots law.

We know that our actions are making a difference. Modelling published in February estimates that 100,000 children will be kept out of relative poverty in the year ahead. This includes keeping an estimated 60,000 children out of relative poverty through investment in our ‘game-changing’ Scottish Child Payment. However, we are acutely aware of the scale of the challenge we face in meeting the 2030 targets and will continue to go as far and as fast as we can to deliver the progress needed.

Eradicating child poverty is our driving mission, and in the year ahead we will relentlessly focus on delivering value for money from existing investments as well as working towards the step change required. Our action will be supported by our progressive approach to taxation, including the introduction of a new ‘advanced rate’ of Income Tax, which will help to raise additional revenue to invest in our vital public services. And, through new place based partnerships, we will reach more families across Scotland and drive progress toward our shared ambitions for holistic and tailored support for families.

We recognise the pressure on household budgets and have committed over £3 billion in 2024-25 to policies which tackle poverty and protect people as far as possible during the ongoing cost of living crisis. This includes agreeing a Council Tax freeze which will benefit over two million Council Tax payers in Scotland.

We know that the UK Government could lift 40,000 children out of poverty by making key welfare changes, including abolishing the two-child limit and introducing an Essentials Guarantee, and will continue to call for the change needed.

We have set out, through our Building a New Scotland series, how we would deliver differently in an independent Scotland. Only with the full economic and fiscal powers of an independent nation can we use all of the levers other governments have to tackle inequalities, and we will continue to make this case. However, this will not stop us from taking all the action we can towards our goal now.

Shirley-Anne Somerville

Cabinet Secretary for Social Justice