Covid Recovery Strategy: for a fairer future

3. Financial security for low income households

The impacts of the pandemic have been profound for low income households. Many households were struggling before the pandemic but low income households^[23] have been able to save less, have taken on more debt, and been significantly affected by labour market impacts.

Low income limits choice and restricts freedom; it can bring anxiety, stress and uncertainty; it can be a contributory factor in family breakdown; it is a key driver in homelessness, crime and addiction; and it can lead to significant health problems and widen health inequalities, particularly if experience of low income is long-term.

We know that some groups are more likely than others to experience low income. For example, children in the six priority family types identified in our Tackling Child Poverty Delivery Plan^[24] account for around 90% of children living in poverty in Scotland. These families are set out in Figure 4 below.

We will take a strong equality-led approach to everything we do to tackle low income.

Figure 4: Groups more likely to experience low income

• Groups more likely to experience low income include
• Families with a child under one year old
• Minority ethnic families
• Lone parent families
• Larger families with three or more children
• Families with a disabled adult or child
• Families with young parents

We will build on the ‘Calls to Action’ from the Social Renewal Advisory Board (SRAB), to sharpen our focus on reducing poverty and disadvantage, embedding a human-rights approach, and advancing equality.^[25] A number of recommendations from the SRAB in common with recommendations from the National Advisory Council on Women and Girls (NACWG), including around extending access to childcare, increasing opportunities to secure fair work, and changing ways of working based on what has worked during the pandemic – are at the heart of this strategy. The Citizens’ Assembly of Scotland also made a number of recommendations around financial security for low income households that have informed our approach and recommended that we should identify issues which can lead to people falling into poverty.

Reducing and ultimately eradicating child poverty is central to realising the change we need. This means meeting the interim targets of the Child Poverty (Scotland) Act 2017 in 2023-24. The 2022-26 Tackling Child Poverty Delivery Plan is due for publication in March 2022; this will contain a number of game-changer policies across the key enablers of financial security such as employment, transport and childcare and will build on the actions to tackle poverty that are set out in this Strategy.

The work of Social Security Scotland is also critical to our efforts to bring about a fairer and more inclusive Scotland and we have placed the values of dignity, fairness and respect at the centre of our social security system. Scotland is currently responsible for a relatively small element of social security, with the UK Government retaining responsibility for many key working age benefits like Universal Credit. We will continue to call for increased social security powers in Scotland and for the UK Government to reverse its damaging plans to cut the £20 increase to Universal Credit introduced during the pandemic.

While social security is important in achieving financial security, we must also consider other vital components such as access to housing, transport and heating. Housing to 2040 – Scotland’s first long term housing strategy – sets out our ambitions for how we want the housing and communities of the future to be. The pandemic has brought into sharp focus the fundamental importance of safe, good quality housing for all and how quickly households can move into fuel poverty as a result of external factors. Housing to 2040 sets out our commitment to a new Rented Sector Strategy, to be published by the end of the year, that will set out an ambitious New Deal for Tenants and tackle both affordability, for example through rent controls, and housing quality in the sector. This, alongside increasing the housing available is all vital for our long term recovery from Covid and ensuring people have safe, warm homes that meet their needs. We also set out in Housing to 2040 our commitment to taking action to realise the right to adequate housing in Scotland, through the introduction of a new Human Rights Bill. This new legislation should result in an increased awareness of people’s housing rights. We also recognise the role of safe and affordable public transport in tackling inequalities and connecting communities across Scotland.

In the midst of a pandemic, we made things happen quickly. We had a clarity of ambition and a common purpose which we need to retain. We need strong communities, a vibrant third sector and thriving businesses working with national and local government, to drive Scotland’s longer term resilience. We do not expect partners to wait for permission to solve problems, we trust them to do good work in a way that delivers for and with communities.

Over the next 18 months, to improve financial security for low income households we will:

• Commence work to expand funded early learning and childcare for children aged 1 and 2, starting with low-income households within this Parliament. In the coming year we will start engagement with families, the early learning sector and academics to design how the new offer will work.
• Design a wraparound childcare system providing care before and after school, all year round, where the least well-off families will pay nothing. The design will be driven by the needs of families, build on existing provision and will, where possible, be integrated with the design of an offer of free breakfasts and food provision.
• Begin the early phasing-in of community level systems of school age childcare (in 2022-23), targeted to support the six priority groups in the Tackling Child Poverty Plan. This early phasing will build on learning from our Access to Childcare Fund projects and input from our People Panel to help us test and understand how we can build a system of school age childcare to support a community. They will also consider and develop the role that organised children’s activities can play in a school age childcare system alongside the regulated childcare sector to support families, provide choice and improve access to these activities for children from low income households. We will ensure that these systems meet the childcare needs of families before and after school.
• Provide over £8.65 million for the Parental Employability Support Fund in 2021-22, and invest at least a further £15 million across 2022-24. This helps low income families identified as being most at risk of experiencing poverty, including disabled parents to increase their earnings, by gaining and progressing in fair work, and providing intensive, person centred key worker employability support.
• Through our No One Left Behind approach with Local Government and the third sector, we will provide £20 million over the next 12 months for employability focused interventions for long-term unemployed people. Through this active labour market policy which targets those who are most vulnerable, we will provide intermediate employability services, including wraparound support and access to appropriate training. This approach will provide people with skills to effectively compete and move into jobs across sectors, including new and emerging ones, where there are skills shortages.
• Roll out the Scottish Child Payment to children under 16 by the end of 2022 and set out, through our spending review, the route to doubling Scottish Child Payment to £20 per week, per child as quickly as possible during this Parliament. We will set out how and exactly when this commitment will be met when we publish the Budget Bill.
• Provide free school lunches to every child in primary school and to all children in state-funded special schools by August 2022. We have already provided universal free school meals for primary 4 pupils from August 2021. We will begin primary 5 provision in January 2022, with primary 6 and 7 being introduced from August 2022.
• In the next year, develop plans to deliver free breakfasts to all primary and special school children, and start to pilot provision. We will also commence the phased roll out of a food offer during the school holidays, starting with those who will benefit the most.
• Reduce the costs of the school day to families across Scotland. In our first 100 days, we have increased the School Clothing Grant for pupils from low-income households, increasing this vital support to at least £120 for primary school pupils and £150 for secondary school pupils in time for the start of the new school year. We will increase each grant each year by inflation and will work to enable local authorities to automate this payment if they choose to.
• Housing costs – particularly rent or mortgage costs – represent the most significant financial outlay that most households have to make. Making sure that housing is affordable is essential to tackling poverty and affordable housing supply is key. We will deliver a further 110,000 affordable homes by 2032, with at least 70% in the social rented sector and 10% in our remote, rural and island communities.
• Begin to implement our second Benefit Take-up Strategy from October 2021. This will set out our approach to maximising the take-up of Scottish benefits – working with key partners to improve targeting of information and advice; challenge myths and stigma around claiming benefits; and continue to remove barriers to accessing social security in Scotland. We will explore automatic payment for devolved social security benefits to make it as easy as possible for people to maximise their incomes. The 2021 Benefit Take-up Strategy will build on learning from the first strategy. Evidence from the £600,000 Benefit Take-up and Income Maximisation Funds launched as part of the first strategy will inform a new approach to supporting stakeholders to extend and share good practices around removing barriers to Scottish benefits.
• Publish our Fuel Poverty Strategy by the end of the year to address the main drivers of fuel poverty.
• Commission a Fair Fares Review of the discounts and concessionary schemes which are available on all transport modes, and consider options against a background where the costs of car travel are declining and public transport costs are increasing.
• Introduce a Community Bus Fund, supporting local transport authorities to improve local public transport in their areas. The fund will support local transport authorities to explore the full range of options set out in the Transport (Scotland) Act 2019, including municipal bus services.
• Invest £10 million during this Parliament to increase accessibility to advice services in a range of places, including £2.9 million over two years to place welfare rights advisors in up to 150 GP surgeries in Scotland’s most deprived areas providing support to many who have never accessed traditional advice services before. This service will launch in October 2021, with all participating surgeries offering in-house welfare rights advice by January 2022. Over the next 18 months, we will build on existing projects to ensure more people are able to access advice to maximise incomes and improve wellbeing in places where they are comfortable, focusing on the priority families from the Tackling Child Poverty Delivery Plan.