Regional economic development, inclusive growth and child poverty in Scotland

John H. McKendrick and Stephen Sinclair

Scottish Poverty and Inequality Research Unit
Glasgow Caledonian University

Purpose

The Scottish Government commissioned this research from the Scottish Poverty and Inequality Research Unit at Glasgow-Caledonian University to evidence the extent to which child poverty is currently a focus for local and regional economic policy, and provide insight as to how economic development approaches can better contribute to reducing levels of child poverty in Scotland.

The views expressed in this report reflect the findings emerging fom the research and observations from the researchers involved.

Acknowledgements

We are grateful to the interviewees for giving time to share their thoughts and experiences. We are particularly grateful to the Scottish Government staff who supported this work.

Context of the research

The Scottish Government has set in statute ambitious targets to significantly reduce levels of child poverty by 2030, with increasing income from employment identified as one of the three drivers to deliver this aspiration. Action to deliver on the ‘national mission’ to tackle child poverty entered a new phase with the launch of Best Start, Bright Futures, the second Child Poverty Delivery Plan in March 2022, which committed to strengthening collaboration and joined up working across departments, services, and sectors.

The Poverty & Inequality Commission have argued that meeting the 2030 target will require ‘more transformational change’, including action to reshape the economy[1]. There is no single policy which will deliver the change needed on its own. Rather, as the Scottish Leader’s Forum Action Group on Child Poverty observed: ‘we must draw the maximum impact from every action taken and investment made. We all need to re-examine our strategic approach to child poverty and see how we can identify better and more effective interventions that accelerate our progress.’[2] The step-change required to make a significant impact on child poverty involves more effective use of all government powers and applying the ‘big levers’ available, including economic development; planning; housing; transport; employability, skills, and education; childcare, and social security. In this spirit, the End Child Poverty coalition have urged local authorities to use the full range of their powers to maximise household income and reduce costs, including more effective use of economic development policies[3].

The Scottish Government recognise that measures to tackle child poverty must align with local and regional economic development policy. The first Child Poverty Delivery Plan stated that ‘we will work with local authorities and Regional Economic Partnerships across Scotland to promote, monitor and evaluate activity designed to maximise regional inclusive growth, including a focus on delivering strong and sustained reductions in child poverty’[4]. However, as several commentators have noted, ‘Identifying the impact of regeneration on poverty is not straightforward. Regeneration programmes have rarely been conceived directly to tackle poverty’[5]. Nevertheless, despite the challenges involved, it is necessary to examine how local and regional economic development policies can contribute to reducing child poverty in Scotland.

Research aims

The purpose of the study is to examine the relationship between regional / local economic development measures and child poverty policy in Scotland. In particular, the aim is to document how these respective areas of work relate to each other and identify how they might be better integrated. This is not a policy evaluation. Rather, the intention is to gather evidence on the experiences, reflections, and recommendations from those involved in developing and delivering regional economic development and regeneration initiatives and analyse their views on how these relate to and could contribute to reducing child poverty. The research has two substantive objectives:

• Identify focus and overlap: examine the extent to which and how regional and local economic development partnerships and initiatives in Scotland address child poverty.
• Identify promising practice: highlight examples of interesting economic development projects or policy processes and consider the potential transferability of such actions.

Research methods

The project involved three inter-related activities:

• Background and context - summarising key findings from the literature on the relationship between inclusive economic development and child poverty and gathering the opinions of experts in Scotland on these issues.

• Key document analysis - conducting systematic analyses of the Local Child Poverty Action Reports (LCPARs) published in 2020 to identify references to local economic development and reviewing City Growth Deals documentation to identify references to child poverty.

• Case study analyses - interviewing representatives from different sectors in three local authorities in Scotland to document the extent to which regional / local economic policies and ecosystems address child poverty issues.

Key findings

Findings from these three programmes are collated under six themes.

Focus on child poverty

• Child poverty is a recognised problem. There were no dissenting voices among those interviewed in the three case study areas on the need to tackle child poverty, and there was much awareness of the scale of the challenge in each area.

• Child poverty is a relevant issue. Tackling child poverty was understood to be an important societal goal and was also an issue that personally motivated the work of several interviewees. It was also widely accepted as relevant to local economic development work.

• Child poverty is not a headline issue. Despite agreement about the importance of child poverty and its relevance to local economic development work, no-one interviewed presented it as an explicit and primary goal. Interviewees defined their headline and priority issues in relation to improving conditions and addressing economic challenges in their local areas.

• Reducing child poverty is a consequence of economic development more than an imperative. Although there was some recognition among interviewees of an economic rationale for tackling child poverty per se, a more common view was that economic development could have a positive impact in reducing child poverty.

• Policy and priorities in transition. There was a clear sense of a growing focus on child poverty - or at least a strengthening focus on some of the factors conducive to tackling child poverty, particularly inclusive growth - in local economic development work. This was evident in how existing activities were ‘retrofitted’ as relating to child poverty and how new work was conceived of and regarded in relation to it.

• Trickle down approach. There was an evident belief in a version of ‘trickle down’ impact. That is, the view that economic development would itself reduce child poverty and associated problems. There was also evidence of a more contemporary variant of this view: that community wealth building and inclusive growth measures would lead reduce child poverty. Consistent with conventional trickle-down thinking, the benefits of economic regeneration tended to be accepted as a truism, although some interviewees did articulate some of the processes involved in reducing poverty.

• Concerns over the alignment between inclusive growth, community wealth building and child poverty. Most interviewees considered that inclusive growth and community wealth building measures would reduce child poverty. However, some expressed concerns these approaches would not necessarily reduce child poverty and could in fact distract from tackling it effectively.

• Low pay and skills gaps. Low pay and a mismatch between some applicants’ skills and local employment opportunities were identified in each case study area as inter-related problems which needed to be addressed. However, the nature of the ‘low pay’ and ‘skills gap’ problems were different in each area.

• Local economic challenges. In addition to low pay, some particular local economic issues were identified in each case study areas. Examples of such issues included start-up failure rates, local labour shortages, a need for micro-qualifications, population health issues, and mismatches in labour market geography. Child poverty itself tended not to be raised when such issues were discussed.

Consideration of particular ‘child poverty’ issues

• Childcare and the foundational economy. Childcare was only acknowledged by interviewees as a factor contributing to child poverty after prompting. However, one case study area had a stronger focus on the ‘Foundational economy’, and the importance of childcare to improving returns from work was better understood there.

• Transport. Transport was identified in each case study area as a significant barrier to reducing child poverty. This was often discussed in relation to a particular locality or population group.

• Child poverty conceived as a ‘young adult’ issue. Although there was acknowledgement of the wide array of problems that child poverty raises for families, some interviewees interpreted the issue from a professional perspective as concerning the labour market prospects of young adults. 

• Covid as an epiphany. For many interviewees, one consequence of Covid was to increase awareness of the scale and nature of child poverty in their area. Although it was acknowledged that the pandemic intensified the problem, poverty was not regarded as short-term consequence of Covid; rather it has made a wider range of professionals more aware of local child poverty.

Understanding the drivers for concern over child poverty

• Child Poverty (Scotland) Act. There was little - and often no - reference in interviewees to the 2017 Act and the ambition to significantly reduce levels of child poverty. However, some interviewees referred to Local Child Poverty Action Reports and were aware of the joint responsibility of local authorities and local health boards to produce these.

• Local drivers. There was a strong sense that interest in child poverty was driven by local factors, such as interviewees’ awareness of local problems and assessments of failed attempts to tackle the problem.

• Local champions. In one area where child poverty was widely regarded as a less serious problem, the persistence of a concerned professional in forcing the issue onto the agenda was acknowledged.

• Regional economic strategies as catalyst. There was general belief that regional strategies were a catalyst for driving the poverty agenda forward. Interestingly, some interviewees regarded this as providing an opportunity for localities which had made progress to share and influence practice in neighbouring areas.

Measuring impact

• No blueprint. No reference was made in interviews to existing work to enable the impact of local economic development activity on child poverty to be assessed clearly, consistently, and confidently.

• Sharpening of impact metrics. Although presented as ‘work in progress’, local economic development metrics were becoming more granular (particularly in the large city case study authority, but also in each case study area), and the focus was becoming more closely aligned to the priorities of the Child Poverty (Scotland) Act; in particular, targeting priority groups.

• Openness to learning and sharing practice. There was much interest in improving measurement and enthusiasm to learn from existing practice. This was also evident from external partnerships which had been developed to improve evaluation frameworks.

• No aversion to targets and measurement. Despite some caveats about targets (e.g., the risk of skewing activity towards what can be measured, or metrics that are inappropriate to local context), there was support for setting targets to sharpen the focus of local economic development activity on tackling child poverty.

• Desire to disentangle local impact. The complexity surrounding child poverty made it difficult to identify the impact of particular interventions. However, improving attribution was regarded as a desirable goal.

Facilitating a stronger focus on child poverty

• Collaborative working. Interviewees acknowledged the need for mechanisms to facilitate collaboration; although these were not regarded as flawless, they were nonetheless viewed as helping to develop a stronger focus on child poverty.

• Going local and listening to experience. There was no widespread advocacy among interviewees of the need to orient practice to local needs and ‘lived experience’, but where this was acknowledged, there was a strong conviction that it would lead to more effective actions.

• Private sector - in and out. Opinions were mixed on the extent to which the private sector was central to tackling child poverty. Although there was much reference to positive private sector engagement, some frustrations were also evident. Concern was expressed that the private sector was at times implicitly presented as ‘the problem’, or that the contribution of private enterprise was marginalised or overlooked. The need to improve what low paid workers received from employment was recognised by several interviewees.

• Community benefit clauses. There was much support for the potential of community benefit clauses to improve returns for local areas; however, it was agreed that their contribution to tackling child poverty could be greater.

• Well-being on the agenda. It was agreed that the growing interest in a wellbeing economy was strengthening the focus on child poverty. However, it was felt that the line of sight between wellbeing and child poverty policies should be made clearer.

• Local is not parochial. Although it was felt that some local environmental and climate change policies (such as highlighting food miles) could become regressive and protectionist, it was also believed that interest in environmental issues provided an opportunity to present, promote and support local producers.

• Traditional barriers. Some of the barriers to strengthening the focus on child poverty were familiar to those in local government and third sector organisations: under-resourcing, lack of time for reflection and short-term funding. Several such issues had been intensified by Covid. In one case, new needs were identified and addressed using Covid funding - anticipating that these challenges would not end as we recover from the pandemic, but the funds provided to address them would not be available in the future.

• Timeframe for impact. A view articulated by some was the concern that the usual timeframe for economic development activity was problematic in the face of current challenges and recent trends. In particular, it was felt that the contemporary intensification of child poverty makes it harder for medium-to-longer term economic development activities to be regarded as successful.

• Mixed opinions on optimal geography. There was recognition that national objectives were sufficiently flexible to allow for local priorities to be addressed. On the other hand, traditional concerns over an inequitable ‘postcode lottery’ were also expressed. Interestingly, some interviewees felt that the optimal scale for some interventions was at the regional level.

Promising practice

• Work in progress. A strong theme to emerge was that economic development policy was in the early stages of transitioning to accommodate a stronger focus on the inclusive economy, with implications for tackling child poverty. There were several references to ‘some time next year’ as being a better time to revisit the child poverty issues discussed in the interviews.

• Private sector organisations as anchor institutions or community supporters. Several interviewees were keen and able to demonstrate how locally focussed private sector enterprise (and social enterprise) supported community needs. This was not regarded as a recent innovation but rather as routine and an overlooked aspect of business-as-usual.

• Local procurement as a programme rather than an aspiration or a target. There is growing interest in using public procurement for local wealth building and redistribution. Best practice was described as supporting local businesses to compete for such contracts.

• Working with parents to extend reach and shift mindsets. Interesting examples were provided of new ways of engaging parents to help develop the career prospects of young people.

• Intelligence hub. There was growing recognition of the need to improve metrics, monitoring and evaluation of the impact of economic development activity on child poverty. One innovation presented as a success in this area was the development of the work of specialist teams to advance this agenda.