Child Poverty Strategy for Scotland - Our Approach - 2014 - 2017

Introduction

This revision of the Child Poverty Strategy for Scotland builds on the actions already taken under the 2011 Strategy.

• We continue to aspire to a Scotland where no child is disadvantaged by poverty
• We continue to focus our efforts on tackling the underlying causes of poverty relating to material resources and children's outcomes

Although progress has been made since 2011 against the targets set out in the Child Poverty Act 2010 (the Act), there remain far too many children in Scotland living in poverty and there is concern that progress is becoming increasingly difficult to maintain.

The Child Poverty Act 2010

The Act sets out UK-wide targets relating to the eradication of child poverty. It provides that it is the duty of the UK Government to ensure that the child poverty targets are met in relation to the year commencing 1 April 2020. These targets relate to levels of child poverty in terms of: relative low income, combined low income and material deprivation, absolute low income and persistent poverty. These targets are detailed in Section 4 of the Act. Child poverty in Scotland is affected by a mix of devolved and reserved policy measures. The Act requires that the UK Government produce a UK-wide Child Poverty Strategy and report on it annually. This will be relevant to tackling child poverty in Scotland in so far as it covers reserved policy measures which apply to and impact on Scotland, such as policy on personal taxation and benefits. The Act also requires Scottish Ministers to produce a Scottish Strategy, review and revise it every three years, and report annually. That Strategy must focus on policy matters that are devolved to the Scottish Parliament and Scottish Ministers.

Scottish Ministers published their first Child Poverty Strategy for Scotland in March 2011. That Strategy is therefore due for revision.

The Child Poverty Act can be found at:
http://www.legislation.gov.uk/ukpga/2010/9/contents

Progress against Targets

Three of the four child poverty targets have been defined. Between 2008/09 and 2011/12, all three child poverty indicators reported a decrease in the child poverty rate:

• The percentage of children in relative poverty Before Housing Costs (BHC) decreased from 21% to 15%, a reduction of 60,000 children
• The proportion of children in absolute poverty (BHC) decreased from 20% to 16%, a reduction of 40,000 children
• The percentage of children in material deprivation and low income combined decreased from 12% to 8% between 2010/11 and 2011/12¹, a reduction of 40,000 children

In general there has been a decrease in the percentage of children living in relative and absolute poverty (BHC) between 1998/99 and 2011/12, with both relative and absolute child poverty rates in Scotland in 2011/12 at their lowest levels since 1994/95².

The most significant reductions in child poverty occurred between 1998/99 and 2004/05, with much of this reduction having been driven by increased entitlements to state support, such as the introduction of Child Tax Credits and Working Tax Credits in 2003. Support for low income working families had a significant impact on reducing the rate of child poverty, particularly when measured as an absolute rate. Rates of child poverty did not change significantly between 2004/05 and 2008/09. However, since 2008/09 there have been further decreases in child poverty in Scotland, with 60,000 fewer children living in poverty in 2011/12 compared with 2008/09 (and a decrease in the rate of child poverty from 21% to 15%).

While there have been significant decreases in child poverty in recent years, estimates show relative child poverty in Scotland is set to increase to levels previously seen in 2003/04, due to the impacts of welfare reform³. The IFS estimate an additional 50,000 children in Scotland will be living in poverty by 2020.

The fourth target on persistent poverty has not been defined or reported on previously. The Act allows both the target, and if necessary an alternative measure, to be prescribed in the regulations before 2015. The Understanding Society survey will be used for the measure. Scotland level analysis from Understanding Society is expected to be available in 2015⁴. This will be used to establish a persistent poverty figure for Scotland and for the UK.

The chart below presents recent Scottish poverty trends for the three child poverty indicators currently available with an indication of the targets themselves.

Child Poverty in Scotland: 1998/99 to 2011/12

We produced annual reports in 2012 and 2013. These set out progress against the statutory targets and actions across Scotland designed to address child poverty. Taken together they provide a record of progress on the aims set out in 2011.

Further details can be found at:
http://www.scotland.gov.uk/Topics/People/tacklingpoverty/ChildPoverty/childpovertystrategy2012report

http://www.scotland.gov.uk/Publications/2013/09/2212

National Performance Framework

The Scottish Government's Purpose is to create a more successful country with opportunities for all in Scotland to flourish through sustainable economic growth. To achieve this, we need to break the cycles of poverty, deprivation, unemployment, health inequalities and poor educational attainment which have become deeply embedded in our society, particularly in our disadvantaged communities.

The focus on poverty and income inequality is reflected in this Government's Economic Strategy, through the Solidarity target: "to increase overall income and the proportion of income received by the three lowest income deciles as a group by 2017"and also the Cohesion target designed to reduce inequalities in economic participation across Scotland.

Tackling poverty and income inequality and improving outcomes for children and young people, are also reflected through the National Outcomes and Indicators, in particular:

• "We have tackled the significant inequalities in Scottish society"
• "Our children have the best start in life and are ready to succeed"
• "We have improved the life chances for children, young people and families at risk"
• "Our young people are successful learners, confident individuals, effective contributors and responsible citizens"
• "We realise our full economic potential with more and better employment opportunities for our people"
• "Decrease the proportion of individuals living in poverty"
• "Increase healthy life expectancy at birth in the most deprived areas"
• "Increase the proportion of school leavers in positive and sustained destinations"

Alongside the targets in the Child Poverty Act and those set out in the EU2020 strategy on poverty levels, these measures provide further evidence in key areas relating to eradicating child poverty and reducing the impacts of disadvantage on children in Scotland.

Further details on the National Performance Framework can be found on Scotland Performs at: http://www.scotland.gov.uk/About/Performance/scotPerforms

Characteristics of Families in Poverty

These headline figures do not highlight the different characteristics and circumstances of families with children living in poverty or the causes of poverty. Life for children and families living just below the poverty line is likely to be quite different from those on the lowest incomes. The causes of poverty will vary across households and the chances of moving out of poverty will also depend on individual and family circumstances.

Employment remains the key pathway out of poverty. Relative poverty rates for households with all adults in employment are considerably lower than average, while the risk of poverty for households where the head or spouse is unemployed is considerably higher⁵. Families with no adults in employment are over-represented at the bottom of the income distribution⁶.

While the employment characteristics of a household have a strong effect on the risk of poverty, the reasons why a household is not in employment are also important⁷. The household circumstances may present additional barriers to taking up employment, meaning some families will not be in employment temporarily, while others will be so over a longer period.

Some groups face a significantly higher risk of poverty. These include:

• Both single parents and families with three or more children face a higher risk of poverty. Evidence suggests that where childcare is neither available nor affordable, this acts as a barrier to seeking employment⁸. The lone parent employment rate is significantly lower than that for all women in Scotland⁹.
• Families containing a disabled person are at significantly higher risk of poverty. This is particularly so where the disabled adult is not in receipt of full disability benefits. The employment rate for adults with a disability is nearly half that for those who do not have a disability¹⁰. Additionally, of those not in employment or actively seeking employment, over a quarter had a disability or ill-health¹¹.
• Families from some ethnic backgrounds face significantly higher risks of poverty compared with the White British population. The employment rate for White British population is significantly higher than that for ethnic minorities¹².
• Families containing adults with low qualifications. Low qualifications limit the opportunity to gain employment and to progress into higher paid employment.

In 2012, 58% of children were living in households where all adults (of working age) were in employment, with 28% living in households where at least one adult was in employment. Fourteen percent of children in Scotland in 2012 were living in households where no adults were in employment¹³.

However, employment per se does not guarantee a life above the poverty line. Over half of children living in poverty in 2011/12 were living in families where at least one adult was in employment (in-work poverty). This can be due to factors such as low wages, under-employment and insecure and transient employment and the cost and availability of childcare. Of families living below the poverty threshold, couples with children were most likely to be in employment whilst single parents were least likely to be in employment¹⁴.

For many families in poverty, there remain significant barriers and disincentives to employment and moving into employment can present a significant level of risk. Significant inequalities in employment and low pay still exist: throughout the recession there was an increase in part time working and in the numbers of people working part time but wanting full time employment¹⁵.