Tackling child poverty delivery plan: progress report 2022 to 2023

Ministerial foreword Cabinet Secretary for Social Justice

Shirley-Anne Somerville

Tackling poverty and protecting people from harm is one of three critical and interdependent missions for the Scottish Government – alongside our focus on the economy and strengthening and delivering effective public services. We remain committed to driving forward the action needed to substantially reduce levels of child poverty in Scotland at the pace and scale required to meet the statutory targets.

As our second Tackling Child Poverty Delivery Plan, ‘Best Start, Bright Futures’, was being published in March 2022, the first signs of the cost of living crisis were emerging. Across 2022-23 we have faced some of the most challenging economic conditions in living memory. The soaring cost of essentials, including energy and food, has impacted on all households across the country, with a severe and disproportionate impact on those on the lowest incomes. Whilst, at the same time, recovery from COVID-19, Russia’s illegal invasion of Ukraine and continual increasing costs due to the UK Government’s decisions, including the £100 billion cost to the UK economy of Brexit and the ongoing impact of a decade of UK Government austerity has placed ever greater pressure on household budgets and public service finances.

Despite these most challenging of circumstances, the Scottish Government has continued to deliver on actions which have provided immediate and meaningful support to low income households and, in particular, the six priority family types that we know are more likely to experience child poverty.

This progress report highlights that 40 of the 101 actions set out in 'Best Start, Bright Futures' are complete or delivery is ongoing. We estimate that £3 billion was invested across a range of programmes targeted at low income households, with £1.25 billion directly benefitting children.

For low income families this includes delivering the planned expansion and further increase in the value of our Scottish Child Payment in what anti-poverty campaigners described as a ‘water- shed moment for tackling child poverty in Scotland’. In 2022 we increased the Scottish Child Payment by 150% from £10 per week per eligible child to £25 and extended it to under 16s. In the year ahead, around 370,000 Scottish children will be eligible for this Scottish Government benefit which is unique to Scotland, with the payment estimated to lift 50,000 children out of relative poverty.

We have also raised the incomes of thousands of families hardest hit by UK Government welfare changes and cuts, working with local authorities we invested around £84 million in Discretionary Housing Payments to support people with housing costs and mitigate the UK Government’s bedroom tax, this included £2.6 million to mitigate the UK Government’s Benefit Cap as fully as is possible within the scope of devolved powers. We also introduced legislation to freeze rents in the private and social rented sector and increase protections for tenants in response to the cost of living crisis.

Over the past year we have also strengthened the protections for the lowest income households in the face of the cost of living crisis, allocating almost £3 billion to support policies which tackle poverty and protect people as far as possible.

This includes taking decisive action to double investment in our Fuel Insecurity Fund to £20 million in 2022-23 and tripling investment to £30 million this year. We doubled the final December Bridging Payment made to low income families with school age children to £260 per child meaning that ahead of the extension of Scottish Child Payment our bridging payments provided almost £170 million in direct financial support over two years to families.

In large part due to the actions we have taken to date, together with those we will continue to take forward under ‘Best Start, Bright Futures’, based on current projections we anticipate both levels of relative and absolute poverty being around 9 percentage points lower than they would have been by 2023-24 in the absence of Scottish Government policies.

We recognise that transformational change is needed to meet our statutory child poverty targets. We have taken key steps necessary to deliver this change, including making the first Whole Family Wellbeing Funding investment, working with Children’s Services Planning Partnerships to support earlier intervention with families, ensuring families get access to the right support at the right time, moving towards prevention and reducing the need for crisis intervention. We are further investing in systems transformation by commencing work on new pathfinder approaches focused on delivering whole system change, bringing services together to provide more holistic support and build more trusting relationships between services and those who need them most.

Whilst we have made significant progress in a number of areas, challenging economic conditions have meant that it has not been possible to commence delivery of other key actions at the scale we had originally envisaged. This includes making the difficult decision to reallocate the additional in-year investment planned for employability services in order to enable the government to respond to the cost of living crisis in the immediate term.

The Scottish Budget for 2023-24 rightly continues to prioritise child poverty and will continue to see the lowest income households paying less tax than anywhere else in the UK. Due to the progressive Scottish Income Tax policy choices we have made, an additional £0.5 billion will be raised for our public services this year.

Whilst child poverty levels in Scotland are consistently below that of the UK as a whole, we fully recognise that tough choices will need to be made about existing budgets in order to drive the progress needed. We will not shy away from the hard choices and decisions that will be needed to reduce poverty. We know that after the past year of soaring costs of living and reducing budgets, this will be all the harder, and all the more necessary.

In the year ahead we will make further progress with implementing ‘Best Start, Bright Futures’. And we will continue to focus on how we strengthen our partnerships across the public, private and third sectors, including through our new deals for local government and business, in order to maximise our collective impacts on child poverty.

At the First Minister’s Anti-Poverty Summit, convened in May 2023, our stakeholders, partners and those with lived experience reinforced that the approach we are taking through ‘Best Start, Bright Futures’ is the right one and that we must continue to deliver with the urgency, pace and scale required. Tackling child poverty is a national mission, and it will take all of us, working together across society, to make the change needed.

Over the coming year we will continue to focus on long term prevention of child poverty as well as mitigating the impacts of the ongoing cost of living crisis. We will retain a sharp focus on emergent challenges, whilst retaining a focus on delivery. Working together with our key partners, we will drive forward the action needed at a scale and pace that provides support to those who need it most and takes the action needed to reach our child poverty targets.

Only with the full economic and fiscal powers of an independent nation can we use all of the levers required to truly eradicate inequality and poverty. However, in the meantime, we will continue to use our fixed budget and all the powers we have to substantially reduce child poverty in Scotland and to protect families as far as possible from the harm inflicted by UK Government policies and the ongoing cost of living crisis.

Shirley-Anne Somerville Cabinet Secretary for Social Justice