Income supplement: ministerial statement

Presiding Officer, twenty years ago when this Parliament was reconvened, it was because the people of Scotland wanted its own parliament to make its own decisions on the priorities of the Scottish people. Reducing child poverty is a clear example of where we can do that.

When the UK Government decided to remove the child poverty remit from the Social Mobility Commission and abandon its child poverty targets, this government didn’t agree. We withdrew from that Commission and brought forward our own Child Poverty (Scotland) Bill, introducing new statutory targets to reduce child poverty.

The Bill was unanimously passed and followed by the first Tackling Child Poverty Delivery Plan. That is devolution in action. That is where collectively we can make a difference.

Today, I have published a First Year Progress Report on that delivery plan which shows we’ve been working hard to build the foundations for transformational change.

The most recent poverty statistics for 2017-2018 show that almost a quarter of children live in relative poverty in Scotland.

These figures, though lower than at UK level, are totally unacceptable. They predate the delivery plan but the challenge we face is clear and this government is determined to tackle it.

Our progress report shows that - after the first year - 48 of the 58 actions in the plan are already in progress or being delivered.

For example, we launched our new devolved employability service, Fair Start Scotland, in April last year. Job outcomes are encouraging and service users are positive about their experiences, and our programmes don’t penalise people through sanctioning benefits. This is a real divergence from the previous UK Government’s Work Programme.

The progress report also demonstrates the great package of support this government provides for families throughout childhood - from birth to school, and beyond - all helping to reduce costs for families. One example of this is that, in partnership with local government, we set the national minimum School Clothing Grant at an increased level of £100, from the start of this academic year, backed by joint annual investment of £12 million.

In November, we launched our new Financial Health Check Service, through Scotland’s network of Citizens Advice Bureaux. This provides families with the help they need to maximise their incomes and beat the poverty premium.

Since the publication of the delivery plan, we are now delivering through our new social security system new benefits to low income households.

All three elements of Best Start Grant are now open to families across Scotland, backed by £21 million this year. The unprecedented number of applications we have received shows that if you take away barriers, remove stigma, and encourage people to apply, people will take up the benefits on offer.

On Monday, the third Carers Allowance Supplement was paid to increase financial support for carers. This means £452.40 a year more is going to carers here than outwith Scotland.

The Poverty and Inequality Commission has welcomed the activity underway and advised us that our investment must match the scale of ambition – we agree. The progress report provides a first estimate of our direct spend on low income families - £527 million in 2018-2019 alone.

But of course, this is not the whole story. This estimate does not include the social contract that delivers the universal services we all enjoy and from which our society benefits. A multi-billion pound package of additional investment is in place in key areas to help all children and all parents, whether low income or not, realise their full potential.
2019-20

As a government, we are proud of what we’ve achieved already and we will keep on delivering.  Over the next year, we will build on a number of key areas. For example, progressing on delivering our massive investment in universal Early Learning and Childcare which will save families on average £4,500 per child each.

On Monday, I launched a new £3 million fund to support delivery of accessible and affordable, community-based childcare and experiences for school aged children.

And, by the end of the year, we will launch our new programme of parental employment support to help parents return to work or progress in their careers.

Presiding Officer, this government is taking action in challenging times. This week, the United Nations Special Rapporteur on Extreme Poverty is at the UN to set out the damage being caused by the UK Government’s policies.

His reports make for shocking reading. Professor Philip Alston said the social security safety net was being systematically dismantled; he called out the two child limit for the despicable policy it is; and railed against the four-year benefit freeze.

These disastrous UK Government policies that are driving increases in child poverty are rightly described by the Rapporteur as 'punitive, mean-spirited and often callous'.

The Scottish Government does not have the power to reverse or scrap UK reserved policies. We have previously estimated that welfare cuts since 2010 would amount to £3.7 billion annually by 2020-2021. Prof Alston said it was ‘unsustainable’ for devolved administrations to mitigate everything.  I agree.

For those who don’t want these policies, rather than being content with mitigation, why not join me in calling for full powers over areas such as employment and social security so we don’t have to tackle disadvantage with one hand tied behind our backs?

Our commitment to work towards introducing an income supplement for low income families within the lifetime of the delivery plan is a flagship policy designed to shift the curve of child poverty. 

Over the last year, the Scottish Government has undertaken a thorough assessment of a range of options - in line with the original two tests set out in the Delivery Plan.

In line with the first test, we looked at how to target families who need the additional income most to lift children out of poverty. This analysis of costs and impacts is published today.

In line with the second test, we also considered how to ensure a robust and viable delivery route that protects the safe and secure transfer of the devolved benefits. These are brought together in a position paper, also published today.

Presiding Officer, a year ago today, the First Minister appointed me as Communities Cabinet Secretary and Shirley-Anne Somerville as Cabinet Secretary for Social Security and gave both of us responsibility for tackling poverty and we have worked closely together on the income supplement policy.

Reducing poverty and achieving a fairer Scotland is why we came into politics. We don’t want to live in a country where we have to mitigate against the policies of another government.

Where children go hungry because their families have had to wait months for their first Universal Credit payment.

Where 85% of benefit spending remains under the control of another government. Where we can’t change the minimum wage to tackle in-work poverty. The majority in this Parliament don’t want this either.

But while we do not yet have all the powers we need, we are not content to sit blithely by and allow the children of Scotland to bear the brunt of Tory austerity. Our ambitions require bold action. We must use the powers we have to deliver on our commitment to tackle poverty.

That is why I am delighted to confirm that we will use our new social security powers to introduce a new benefit to tackle child poverty.

This new financial support will be delivered by Social Security Scotland and called the Scottish Child Payment.

By the end of 2022, this Payment will be for all eligible children under the age of 16.

The Payment will be monthly and will be uprated annually in line with inflation and all children in eligible families will be entitled to this support. There will be no cap on the number of children in this or any other social security policy in Scotland.

The Payment will be based on qualifying benefits including Universal Credit, Jobseekers Allowance and Child Tax Credits.

However, as Universal Credit is not due to be fully rolled out until 2023 at the earliest, many families will still be in receipt of legacy benefits. This would make automation of the service – always complex and time-consuming – particularly challenging.

So, in order to deliver the new payment, Social Security Scotland will manage an application-based process. As with all benefits delivered by us, we will work hard to get maximum take-up.

While we will introduce the Scottish Child Payment by the end of 2022 – at a time when we are delivering a suite of complex devolved benefits – we have listened to the voices of front-line poverty campaigners, including people with lived experience, who are facing the impact of UK Government welfare cuts now.

We have therefore looked carefully at what is deliverable within an earlier timescale; considered what the effects to other aspects of our social security programme might be; and sought an approach that will have the biggest impact on children living in poverty.

The outcome of that work is that I am delighted to announce we will introduce the Scottish Child Payment for all eligible children under six by the end of this Parliamentary term, much, much earlier than our original commitment.

The approach we have decided upon is informed by these two facts. Almost 60% of all children in poverty live in a family with at least one child under the age of 6. And we know that making a difference in the early years of a child’s life has the biggest impact on long term outcomes.

Presiding Officer, we must shift the curve on child poverty and providing direct support to parents can do just that.
Therefore I can announce today that our new Scottish Child Payment will be £10 a week.

For a two child family, this additional financial support of over £1000 a year will make a major difference.
Presiding officer, the Scottish Child Payment is a significant turning point in our action to tackle child poverty, and one which will benefit hundreds of thousands of children.

The decisions we have taken to enable early delivery from next year will benefit 140,000 households with 170,000 children and is a substantial investment in families in Scotland.
When the policy is fully rolled out by the end of 2022, 410,000 - over a third of Scottish children - will be eligible for the Payment.

We expect the Scottish Child Payment to lift 30,000 children out of relative poverty altogether and reduce the relative poverty rate by 3 percentage points, as well as increasing the family incomes of many tens of thousands more.

The Payment will help prevent poverty for families on insecure incomes just above the poverty threshold, who are facing UK Government welfare cuts; and it will help children at risk of material deprivation, another of our targets.

A payment that prevents deprivation and protects those who need our support is something this Government and this Parliament can and should be proud of.

The Scottish Government is today making a conscious and deliberate decision to prioritise action to tackle child poverty for the remainder of this parliament and beyond.

But doing what we know is right, and doing so early, means tough decisions and choices. 

Tackling child poverty will be central to the Budget and Spending Review in the coming months.

There will also be implications for the delivery of other aspects of our social security programme.

Audit Scotland’s recent report noted that “it is difficult to see how the programme could progress more quickly”.  So it is clear that we will need to make the necessary space to deliver the new Payment early and successfully. And it is important to be open with Parliament from the outset.

We have already carried out extensive work to ensure we can deliver. We are also aware we will need to actively manage the delivery of the Payment within a highly complex and challenging existing programme.

Therefore, over the summer, officials will carry out further formal assessment of the challenges and develop a clear plan for how to mitigate them. This will include any issues relating to IT systems, staffing, supplier management and our enabling services.

I can say now that we will absolutely deliver Disability Assistance for Working Age People – our replacement for PIP – in early 2021 as outlined to Parliament in February.

We are on track to deliver our first disability benefit, Disability Assistance for Children and Young People, next summer as announced.

Our expectation is that the launch of our new claims service for Disability Assistance for Older People, the devolved form of DWP’s Attendance Allowance, may need to take place in 2021, rather than in 2020 as originally planned.

There may be an impact on the launch date for new claims of Scottish Carer’s Allowance, which may need to move back a few months to early 2022.

There could also be an impact on the date when we expect to complete the transfer of benefits cases from DWP to Social Security Scotland.

We have today responded to an initiated question on the implications of this on social security delivery. The Social Security Secretary will update Parliament with more detail in the autumn following the completion of the impact assessment.

These are difficult decisions – but ones that we are making for the right reasons. After all, the risk of not delivering on the ambition of the Payment is that we do not shift the curve on child poverty in the way we know we have to.

That is why, given the commitment across this parliament towards tackling child poverty and the collective agreement to the targets set, the support of all MSPs to enable the early introduction of this Payment is crucial.

Presiding Officer, our progress report sets out the first year of action and the clear steps we have taken towards genuine reductions in child poverty. These actions demonstrate our commitment to eradicating child poverty and offer a glimpse of what is possible when we have the powers and the will to do so.

The Scottish Child Payment on its own stands to be one the most progressive policy proposals put forward since devolution. It will be backed by significant investment and Scotland will be the only part of the UK that is making such a serious commitment to reducing and ultimately eradicating child poverty.

The Scottish Child Payment of £10 a week is bold and it is ambitious. And vitally, it will reduce child poverty. And tackling child poverty - head on - is the only way we can make Scotland the best place to grow up.