Bringing Hope, Building Futures: Tackling child poverty delivery plan 2026-2031 – annex 11: Consumer Duty Impact Assessment (CDIA)

Annex 11: Consumer Duty Impact Assessment (CDIA)

Title of the policy/proposal/decision

Bringing Hope, Building Futures: Tackling Child Poverty Delivery Plan 2026-2031

Directorate/Division/Team

Directorate: Tackling Child Poverty & Social Justice

Division: Tackling Child Poverty

Team: Tackling Child Poverty Policy Unit

Planning

The Child Poverty (Scotland) Act 2017 (“the Act”) sets in statute ambitious targets to significantly reduce rates of child poverty in Scotland by 2030.

The final tackling child poverty delivery plan under the Act covers the period 1 April 2026 to 31 March 2031 and aims to:

• Set out a strategic framework to drive continued progress in delivering on the national mission to eradicate child poverty and meet the four statutory child poverty targets - relative, absolute and persistent poverty and combined low income and material deprivation - set out in the Act.
• Outline specific action to be delivered in 2026-27 which will drive continued progress against the targets.
• Build on evidence of the drivers of poverty reduction to drive progress on four key themes: increasing earned incomes; reducing the costs of living; maximising incomes from social security; and supporting children and families to thrive.

It builds on action taken over the life of the first two plans:

• Every child, every chance: tackling child poverty delivery plan 2018 to 2022
• Best Start, Bright Futures: tackling child poverty delivery plan 2022 to 2026

As set out in Section 9 of the Act, the delivery plan must set out:

a) the measures that the Scottish Ministers propose to take during the period of the plan for the purpose of meeting the child poverty targets,

b) an assessment of the contribution the proposed measures are expected to make to meeting the child poverty targets,

c) an explanation of how that assessment has been arrived at, and

d) an assessment of the financial resources required to fund the proposed measures.

As the plan is considered to be strategic in nature, a Consumer Duty Impact Assessment (CDIA) will be undertaken to consider the impact of the plan as a whole on consumers in Scotland and how to reduce harm. In accordance with Consumer Scotland’s guidance, ‘harm’ may include a wide range of potential negative outcomes for consumers, including situations that cause consumers stress, cost them money and take up their time.

The Act defines a consumer as either an individual or a small business that purchases, uses or receives goods or services in Scotland, where those goods or services are supplied in the course of business. The duty covers consumers of services provided by government departments, local government and other public authorities. All users of public services are consumers regardless of whether or not they pay directly for that service. A consumer can also refer to potential or future consumers.

Given the plan will include a focus on certain services provided by the Scottish Government and local partners, this impact assessment will consider whether there are any potential negative outcomes for individuals and families using and receiving these services. Furthermore, it will consider the impact of the plan’s aims to increase incomes for a section of the population, though impacts should only be positive in this regard.

Poverty affects a wide range of families with a variety of protected characteristics. However, around 90% of all children in poverty in Scotland live within the six priority family types identified in our first delivery plan: lone parent families, minority ethnic families, families with a disabled member, families with a mother aged under 25, families with a child under one and larger families (3+ children).^[1] This CDIA will therefore focus primarily on the impact on these family groups.

In addition to statistical data and existing research into tackling child poverty from a variety of organisations in Scotland, the Scottish Government conducted an extensive and targeted consultation process in 2025 to inform the themes, areas of intervention, and the actions committed in the plan. This engagement with stakeholders from a wide range of organisations and with lived experience of poverty will be key to informing this impact assessment and mitigating against any negative outcomes for consumers.

Evidence Gathering

Existing research/reports/policy expertise

The plan sets out a strategic framework for delivery across 2026-31 and the analysis presented in this CDIA is a summary of consideration across the four strategic themes and fifteen interconnected areas of intervention which make up the focus of the plan. This CDIA is not intended to replace policy specific assessments. This CDIA should be read, understood and used together with the other impact assessments which together have been used to inform the contents of the plan.

The plan builds on the work that has been undertaken through the first two delivery plans and has been informed by an extensive evidence base of research and policy expertise in relation to tackling child poverty, including the focus on priority family groups and the key drivers of child poverty reduction. Since the publication of the first plan, the Scottish Government has produced annual progress reports outlining the action that has been taken and the impact towards the child poverty targets. Local Authorities and Health Boards also jointly publish annual Local Child Poverty Action Reports, setting out what they are doing to reduce child poverty in their local area.

National child poverty data

The Child Poverty Act 2017 contains four income-based targets to reduce child poverty in Scotland by 2030 and the Scottish Government holds key statistical data for tracking progress against these targets. High level data and analysis can be found at child poverty summary and child poverty analysis.

This data shows that child poverty rates have remained broadly stable over the last decade. It is estimated that 23% of children (240,000 children each year) were living in relative poverty after housing costs in 2021-24. Before housing costs, it is estimated that 22% of children (220,000 children each year) were in relative poverty.

Detail of progress toward the interim targets can be found in the 2024-25 annual progress report. The latest data on poverty will be published on 26 March, reflecting a new link to DWP administrative data, which will help to further our understanding of poverty in Scotland.

Child poverty data and analysis is also available from independent sources, including:

• The End Child Poverty Coalition produced a report in June 2025 alongside Loughborough University with estimates of child poverty after housing costs in parliamentary constituencies and local authorities.
• Joseph Rowntree Foundation’s annual report regarding poverty in Scotland includes a focus on poverty rates over time and progress towards the targets.

• Public Health Scotland host a child poverty prevention dashboard, with a range of quantitative indicators to help local areas tell the story about local child poverty and its drivers.

Evidence of what works

A Cumulative Impact Assessment and impact reports for the main policies are published alongside the plan. These documents, alongside the statutory annual progress reports published, tell us what is working in the national mission to eradicate child poverty and have informed the policy package set out in the plan.

The previous plan covering 2022-2026 contained a comprehensive evidence review on what works in tackling child poverty. Based on wide consensus across national stakeholders and supported by other international approaches, the review emphasises:

• Having clear targets supported by policies that directly impact on poverty rates
• Tackling poverty across all three drivers (income from employment, cost of living and income from social security and benefits in kind)
• Having a combination of various policies that support families most in need, and recognising that there is no single way to experience poverty, but a wide range of unique experiences.

In June 2025, the Scottish Government published an international review of approaches to tackling child poverty. This report – and the series of case studies that underpin it – explores different European countries’ choices and routes to tackling child poverty and how the Scottish Government might learn from them to improve the lives of families. The focus of this report is to:

• Draw out the key factors that have either reduced child poverty levels or kept them consistently low;
• Identify the policies that have been central to achieving those outcomes;
• Explore the extent to which national governments and/or wider factors have, in each case study, influenced these poverty-reduction outcomes; and
• Examine the feasibility of applying these approaches in a Scottish context, accounting for both historical differences and availability of policy levers.

Overall, the report found that rather than there being any single silver bullet, context matters alongside implementing a combination of policies that, taken together, deliver poverty reduction.

Much of the existing evidence in what works to tackle child poverty was reinforced by the study and has informed some areas of intervention and actions contained in the plan. For example, there is a particular emphasis in the international review on social security and the importance of policies which support parents to enter and remain in the workplace, such as childcare and tailored support through active labour market policies.

Priority families

Evidence continues to suggest that the priority family groups set out above experience poverty at a higher rate than the rest of the population. Therefore, the 2026-31 delivery plan will continue to focus on addressing the barriers faced by these families. We will continue to monitor and evaluate the impacts our policy package over the life of the plan to ensure it has the impact required.

It is important to note there is significant intersectionality within these groups and, whilst we will focus our efforts on those most at risk of experiencing child poverty, we will use the priority family types as lenses through which we address the key barriers experienced by different groups. For example, among children in relative poverty:

• 49% of children in lone parent families also have a disabled family member
• 50% of children in a family with a younger mother are also in a lone parent household
• 49% of children in families with three or more children are also in a family in which someone is disabled

Families with experience of multiple disadvantage are often among those deepest in poverty and experience most challenges to getting out of poverty. Most of these families are also likely to fall into at least one of our priority groups. Therefore, it is important that policies are mindful of the intersectionality, specific support needs and multiple barriers people can face.

Key drivers of poverty reduction

The first two delivery plans set out that tackling child poverty most effectively results from the inter-relationship between three key drivers of poverty reduction:

• Increasing income from employment
• Reducing cost of living
• Increasing income from social security and benefits in kind

Evidence shows that this driver approach remains relevant and appropriate. The third delivery plan will therefore build on this approach and, supported by views gathered from key stakeholders, also ensure that the plan supports children and families to thrive.

Consultation/feedback from stakeholders

As set out above, in addition to statistical data and existing research into tackling child poverty from a variety of organisations in Scotland, the Scottish Government conducted an extensive and targeted consultation process in 2025 to inform the themes, areas of intervention, and the actions committed to in the plan.

Through this engagement, the Scottish Government gathered feedback from community based and national third sector organisations, local authorities, health boards, COSLA, and the Scottish Parliament, in line with the requirements of the Child Poverty (Scotland) Act 2017.

We also engaged with over 90 parents with lived experience of poverty, supported by key partners including the Poverty Alliance. Changing Realities and Migration Policy Scotland, and with over 180 young people, facilitated by a range of partners including Young Scot, Child Poverty Action Group, MCR Pathways, Sistema and Aberlour. This engagement with stakeholders from a wide range of organisations and with lived experience of poverty was key in understanding the impact of the plan on consumer outcomes, particularly those in or at risk of poverty.

There was broad consensus across the consultation and engagement activities that the four strategic themes tested are appropriate, and there was no evidence that harm would be experienced by consumers as a result. However, there were some suggestions for refinement and additional themes:

1. Increasing earned incomes by supporting and providing opportunities for parents and carers, to enter, sustain and progress in work. This includes through the likes of employability support and the provision of essential infrastructure such as childcare and transport.

Suggestions from consultation

• Avoid a ‘work at all costs’ framing.
• Ensure a focus on the quality of employment and progression.

2. Reducing the costs of living and maximising incomes from social security to allow families to live dignified lives and meet their basic needs. This includes through the likes of social security, affordable homes, and advice services.

Suggestions from consultation

• Separate maximising income from social security and reducing cost of living.

3. Delivering holistic and whole family support to improve outcomes and wellbeing and enable families to better engage with other services that directly increase their incomes. This includes through action focused on preventing families falling into poverty and wider community-based support.

Suggestions from consultation

• Greater emphasis on early days of childhood and mental health and trauma.
• Clarity of language and meaning.

4. Supporting children and young people to reach their full potential and to break the cycle of poverty in the longer term. This includes through the likes of early years support, education, and post-school transitions.

Suggestions from consultation

• Greater focus on first 1,000 days and earlier development.

Consultation/feedback directly from children and young people

As noted above, children and young people themselves were consulted directly as part of the engagement process through sessions facilitated by partner organisations representing children’s interests. This included:

Young Scot

• Developed a survey for young people to capture views and experiences to inform development of the plan.
• Delivered 3 engagement sessions with young people to capture a mix of lived experiences including; care experienced young people and young parents.

MCR Pathways

• Engaged 35 young people in roundtable and via school network.
• Young people-led engagements with around 130 practitioners, partners and mentors in MCR network.
• Delivered 3 roundtable events for young people, practitioners and mentors in the MCR network.

Sistema

• Engaged 74 young people via Big Noise Communities – primary and secondary school.

Child Poverty Action Group

• Engaged approximately 50 young people via Voices Network.

Aberlour

• Engaged with young people through Guardianship services as well as services from Glasgow and Moray.

Themes that emerged from the consultation with children and young people included:

• More youth clubs/activities needed for young people
• Awareness raising programmes
• Tackling stigma – kindness is important
• Families need support with childcare, employment
• Parity between vocational and high education post-school routes
• Support for mental health
• Cost of the school day
• Trusted adults

No specific gaps in evidence have been identified which may prevent determination of impact. The consultation process was wide-ranging and gathered views of consumers from across each of the priority groups to understand the impact of the plan with regards to their individual contexts and needs.

Assessment and Improvement of Proposal

Evidence shows that the approach taken in the previous two delivery plans has made a significant difference, with rates of relative child poverty in 2023-24 falling to the lowest level in almost a decade.

Driven by evidence of the drivers of poverty reduction, and the views of those who shared their experiences with us, the plan focuses on four key themes and 15 interconnected areas where further progress is needed in order to eradicate child poverty in Scotland:

Increasing earned incomes

• Providing aligned skills and employment support for parents and young people
• Expanding the availability of flexible and affordable childcare for families
• Ensuring public transport is available, affordable and accessible and connects parents and young people to work
• Driving positive change in labour market and workplace conditions

Reducing the costs of living

• Delivering more social and affordable homes for families
• Ending child homelessness
• Making homes cheaper to heat
• Tackling public sector debt

Maximising incomes from social security

• Strengthening support through social security
• Maximising take-up of Scottish and UK Government benefits to ensure all families receive the support they are entitled to
• Increasing accessibility of money and debt advice for families

Supporting children and families to thrive

• Supporting young families: investing in early child development
• Ensuring children and young people can reach their full potential
• Delivering Whole Family Support
• Making best use of data to support children and families and improve public services

Analysis of the four themes and 15 interconnected areas of intervention has not identified any negative impacts on consumers, but rather the potential for positive impacts on families by increasing their incomes and reducing the costs of living to ensure they have more money to pay for essentials.

The actions set out under the first theme focus on improving access to employment, which we know offers a sustainable route out of poverty for many families. As part of this, there is an emphasis on improving the accessibility and affordability of two key services for consumers in Scotland – childcare and transport. This includes:

• Investing over £1 billion in 2026-27 in funded Early Learning and Childcare, providing 1140 hours of funded childcare for all three and four year olds and eligible two year olds - supporting parents to access work, training and learning, and giving children the best start in life.
• Providing free bus travel for over 2.4 million people, including all children and young people under 22 and disabled people, backed by investment of £465.8 million, saving families over £3,000 across their child’s life and connecting almost 800,000 children and young people to new opportunities and activities, including work, training and learning.
• Investing up to £19 million in 2026-27 to develop a new Transport to Employment offer for low income parents. This will support parents with transport costs to access training and employability support whilst also increasing the availability of transport options for parents accessing work. It will also focus on addressing challenges faced by lone parents and families in areas where accessibility, availability and affordability of transport can affect pathways into work.

Though individual actions may target specific consumer groups such as disabled people or young people, the overall package should have a positive impact on consumers – particularly those vulnerable to poverty – through making these public services more accessible and affordable.

The actions set out under the second theme focus on supporting families with the cost of living and improving their lives and outcomes. As part of this, there is an commitment to delivering more social and affordable homes as well as making all homes cheaper to heat. This includes:

• Investing a record £4.1 billion over the next four years as part of a wider investment of up to £4.9 billion in affordable homes. This is estimated to support delivery of 36,000 affordable homes and provide up to 24,000 children with a place to call home. This planned investment supports our continued commitment towards the delivery of 110,000 affordable homes by 2032, of which at least 70% will be for social rent and 10% in rural and island communities as well as our wider all-tenure ambition.
• Tackling fuel poverty and supporting greater energy efficiency through Warmer Homes Scotland and Area Based Schemes (ABS) delivery programmes, with the 2026-27 budget including up to £64 million in funding for locally designed and delivered ABS projects. Heating, insulation and renewable measures installed through Warmer Homes Scotland saved households around £450 a year on average on their fuel bills in 2024-25.

The overall policy package aimed at reducing the costs of living should have a positive impact on consumers not only through providing them with more money to pay for other essentials, but also through making further services such as social housing and energy more affordable.

The actions set out under the third theme should also have a positive impact on consumers who use and receive services related to social security and advice regarding financial wellbeing. This should benefit consumers both through maximising their incomes and strengthening the accessibility of advice services delivered by national and local government. This includes:

• Introducing a Scottish Child Payment Premium for children under 1, which will increase the total payment amount to £40 per week during 2027-28 benefitting an estimated 12,000 children. With families with a baby more likely to live in poverty or deep poverty, this will provide vital additional support in the first year of a child’s life.
• Delivering a national, multi-channel Parental Employability and Financial Support campaign to help families access available support. This will include locally targeted and tailored signposting to information, advice and support to apply for benefits they are entitled to – including reserved benefits such as Universal Credit.
• Publishing the next Benefit Take-up Strategy for Scottish Government benefits, setting out how we will support take up of devolved benefits over 2026-2031.
• Investing over £27 million in welfare, income maximisation and debt advice services over the next two years through multi-year grants, providing stability and certainty for the sector, improving staff retention and therefore service quality, which we expect will support at least 80,000 households each year.
• Providing funding of £6 million for the Advice in Accessible settings Fund by the end of 2028-29, which we expect will support over 7,500 people each year.

Supported by views gathered from key stakeholders, the fourth theme of ‘supporting children and families to thrive’ should benefit families in Scotland who encounter multiple and overlapping challenges that require bespoke and nuanced responses. Action in the plan focuses on support that is person-centred and meeting families where they are. This key theme will positively impact consumers in Scotland by allowing them to access support services where they need, when they need it and for as long as they need it.

For detailed assessments of the impact on consumers in island and rural areas, see the Island Communities Impact Assessment. See the Equality Impact Assessment for assessment of the plan's impact in relation to protected characteristics.

No specific changes have been required as a result of this assessment. Stakeholders have been broadly supportive of the policy and no negative impacts on consumers have been identified which would require a reversal of the policy or a change in approach. We will continue to monitor the impact of the policy package set out in the plan on consumers.

Decision

Throughout the development of the plan, and in completing this CDIA, the Scottish Government has considered the impact of the plan on consumers in Scotland, particularly with regard to how to reduce harm and achieve the best result for consumers. Given the focus of the plan, the assessment has focused on the impact on those in or at risk of poverty (particularly from the six priority family groups) and how they use and receive relevant services.

In addition to the large evidence base already held by the Scottish Government through statistical data and existing research, the extensive consultation and engagement exercise undertaken in developing the plan has been crucial in understanding its impact on consumers. This included with consumers themselves, through targeted engagement with those with lived experience of poverty as well as organisations representing the interests of various stakeholder groups.

As a result, no negative impacts on consumers have been identified. There may be positive impacts on outcomes for individuals and families given the plan’s focus on increasing earned incomes, maximising incomes from social security and reducing the costs of living.

The plan sets out a strategic framework for delivery across 2026-31 and the assessment presented in this CDIA is a summary consideration across the four strategic themes and fifteen interconnected areas of intervention which make up the focus of the plan. This CDIA is not intended to replace policy specific assessments. Some policies are already in implementation, while other commitments in early development may require their own CDIA to ensure that impact on consumers is considered.

SCS Sign Off

I am satisfied that the impact on consumers as required by the Consumer Scotland Act 2020 in completion of the Consumer Duty Impact Assessment has been met.

Name: Alice Hall

Job title: Deputy Director, Tackling Child Poverty

Date: 23 February 2026

Ministerial Sign Off

I am satisfied that officials have considered the impact on consumers as required by the Consumer Scotland Act 2020 in completion of the Consumer Duty Impact Assessment.

Minister's name: Shirley-Anne Somerville

Minister's title: Cabinet Secretary for Social Justice

Date: 4 March 2026

Publication

Date published to SG website: 12 March 2026

Monitoring and Review

The updated Tackling Child Poverty Evaluation Strategy published alongside the plan sets out how we will monitor and evaluate action taken by the Scottish Government and its partners to meet the four ambitious targets for 2030, as set out in the Child Poverty (Scotland) Act 2017.

There are three key elements of assessment:

1. Monitoring child poverty

Data for the four child poverty targets are published annually alongside the progress report.

2. Monitoring the drivers of child poverty

A refreshed Child Poverty Measurement Framework has been developed to demonstrate how the drivers of poverty are changing over time.

3. Assessing the impact of policies and external factors on poverty and its drivers

The measurement framework is used to help produce annual reports of the drivers and impacts. The updated measurement framework published alongside the plan will support future progress reports.

The impact on the plan on consumers will continue to be assessed throughout this ongoing monitoring and evaluation. Individual policy areas should also continue to monitor impacts on consumers as they develop and implement their policies.