Child poverty annual progress report: statement

Presiding Officer, tackling poverty and protecting people from harm is one of three critical missions for this Government. It is a shared endeavour across all portfolios, and indeed across Scotland. I want to be unequivocally clear from the outset that this government is committed to driving forward action at the pace and scale required to ensure our statutory child poverty targets are met.

Today several documents have been published. I have published the annual progress report on child poverty for 2022-23. This reflects the initial implementation of actions set out in Best Start, Bright Futures our second Tackling Child Poverty Delivery Plan, published last March, alongside additional action taken during the reporting year to strengthen protections in response to the cost of living crisis. In addition, recommendations from the Poverty and Inequality Commission were published today which I welcome.

Alongside the progress report we have published updated modelling which estimates that, as a result of our policies, around 90,000 fewer children are expected to live in relative or absolute poverty this year, with levels of relative and absolute poverty 9% points lower than would otherwise have been the case.

This includes lifting an estimated 50,000 children out of poverty through the investment in our Scottish Child Payment.

This considerable impact reinforces the importance of our actions to reduce child poverty. It also shows  what we can do to tackle child poverty head on within our limited powers and fixed budget and that we can make a difference.

Presiding Officer, I am, however, acutely aware that I am doing this with one hand tied behind my back.  It is only with the full powers of an independent nation that governments can use all levers such as economic, social security and employment to tackle poverty and inequalities.

Recently we have seen a cost of living crisis and the most challenging economic conditions in living memory which no one predicted when Best Start, Bright Futures was published. This has caused unprecedented hardship.

Spiralling energy costs has led to people having to choose between heating and eating with UK Government support for energy bills withdrawn in March. Soaring inflation has caused  food prices to increase by nearly 20% over the past year – and considerably more for some staples. 

Continual rising costs due to UK Government decisions - including the £100 billion cost to the UK economy of a hard Brexit, economic mismanagement under the Liz Truss government, and the ongoing impact of a decade of austerity – have resulted in even greater pressure on public service finances and pushed low income families to breaking point.

In the face of this challenge we have had to make difficult decisions in order to prioritise immediate support to people most impacted by the cost of living crisis, as well as to meet our requirements to deliver a balanced budget – a budget which has also been reduced due to inflation.

As the report sets out, we estimate that £3 billion was invested across a range of programmes targeted at low income households last year, with £1.25 billion directly benefitting children.

This represents an increase of £0.43 billion and £0.15 billion respectively, compared to 2021-22 and vital support at a crucial time for households.

Presiding Officer, the report provides the latest child poverty statistics, which relate to 2021-22 and the final year of our previous Tackling Child Poverty Delivery Plan. Whilst trends for poverty rates are stable on three target measures – including relative and absolute poverty - there is a low upward trend in persistent poverty. However, these levels do not yet capture the impact of the expansion and increase in value of the Scottish Child Payment, alongside other measures reflected within the modelling published today.

The annual progress report sets out that, as a result of action taken in 2022-23, 40 of the 101 actions set out in Best Start, Bright Futures are complete or ongoing, with a further 39 in progress and 19 in the early stages of development. And it outlines the action we have taken to provide immediate support to families as part of our overall approach to tackling child poverty.

We doubled our Scottish Child Payment to £20 a week from April 2022; delivered our planned expansion to under 16s and provided a further increase to £25 a week in November last year – this was described by anti-poverty organisations as a ‘watershed moment for tackling child poverty in Scotland’.

This was an increase of 150% over 8 months. It means that our five family payments, including the Payment, Best Start Foods and Best Start Grants, could be worth over £10,000 by the time an eligible child turns six – over £8,000 more than is available for families in England and Wales – and over £20,000 by the time an eligible child is 16.

By the end of March, 303,000 children were in receipt of the Payment, very close to predictions of the Scottish Fiscal Commission. But we are not complacent, and we are committed to doing everything we can to ensure that eligible families take up this unparalleled support.

Over 2022/23 we invested £84 million in Discretionary Housing Payments to support people with housing costs and mitigate the UK Government’s bedroom tax.  We also worked with our local authority partners to mitigate the UK Government’s unfair Benefit Cap as fully as possible within devolved powers backed by £8.8 million this year and last.

This is expected to help up to 4,000 families with around 14,000 children, many of them lone parent households who are disproportionately impacted.

In the last year we also acted to increase the value of eight Scottish Government benefits by 6% from 1 April 2022 – almost double the planned rate – and have further increased twelve benefits by 10.1% from April this year, providing more money to people who need it most.

Despite the significant pressure facing the Scottish Budget, we took the opportunity to go further where we could through our Emergency Budget Review increasing the immediate support available to families.

This included doubling the final Bridging Payment in December 2022 to £260, with payments made in 2022 putting a total of £92 million in the pockets of families of around 143,000 school age children at a time when they needed it most.

We doubled investment in our Fuel Insecurity Fund to £20 million, helping tens of thousands of people to meet their energy costs – and will triple this to £30 million in the year ahead.

And in addition to increasing investment for our Scottish Welfare Fund, committing £1.4 million for the Islands Cost Crisis Emergency Fund and £1.8 million to tackle food insecurity, we introduced emergency legislation to give tenants increased protection from rent increases and evictions.

We have also taken important steps to deliver change in the longer term.

For example, in early years, we have set out our approach to expanding our childcare programme over the rest of this Parliament and commenced early phasing of community level systems of school age childcare with a further £15 million committed for this important work in the year ahead.

And to help drive forward the whole systems change needed, we established new pathfinder approaches in Dundee and Glasgow and invested £32 million of Whole Family Wellbeing Funding to deliver a long term shift towards earlier, preventative intervention with families.

So whilst we have made vital progress, we recognise that the challenging circumstances of the past year have meant that it has not been possible to deliver the levels of investment in key measures anticipated when Best Start, Bright Futures was published.

This included making the difficult decision to reallocate funds from our employability services to enable us to respond to the cost of living crisis. However in the year ahead we will make up to £108 million available for the delivery of employability support and will work with partners to significantly increase the reach of our services.

Scotland’s public finances are under more pressure than at any time in the Parliament’s history. We fully recognise that tough choices will need to be made about existing budgets in order to drive the progress needed, including looking at how we target our investment to deliver the greatest impact, and we will not shy away from the hard choices and tough decisions that will be needed.

At the Anti-Poverty Summit, the First Minister convened in May, our stakeholders, partners and those with lived experience reinforced that the approach we are taking is the right one, and that we must continue to deliver with the urgency, pace and scale required.

Presiding Officer, we are determined to do more to tackle and reduce child poverty. As is clear from what I have outlined, in the past year, despite the challenges of our economic and budgetary circumstances , we have taken action to tackle child poverty head on and progressed the actions set out within Best Start, Bright Futures. We have provided immediate support to families impacted by the unprecedented cost of living crisis. And we have gone further to increase protections for families and mitigate the harm of UK Government policies.

The modelling published today reinforces that we are not just holding back the tide of poverty in Scotland, we are turning the tide – with 90,000 fewer children expected to live in poverty this year as a result of the measures we are taking.

In the coming year we are committed further investment to accelerate progress and will strengthen our partnership approach, including through our new deals for business and local government.

As a government we will continue to do everything within the scope of our limited powers and fixed budget to ensure that the statutory child poverty targets are met, and to drive forward progress with urgency and at the scale required.

And we will continue to make the case for the full powers of a normal nation so we can fully tackle poverty and create the fairer nation that we all long to see.