Bringing Hope, Building Futures: Tackling child poverty delivery plan 2026-2031 – annex 5: Cumulative Impact Assessment

1. Summary

Since the publication of the second Tackling Child Poverty Delivery Plan, Best Start, Bright Futures, we have published a series of updates designed to estimate the impact of Scottish Government policies on child poverty. This report provides modelling based on the latest UK and Scottish Government budgets, along with an additional year of historical data.

The Tackling Child Poverty Delivery Plan for 2026-31 provides a framework for action across 2026-31, allowing for an incoming Scottish Government to reflect their policy priorities and further action within annual progress reports. In line with this approach, the delivery plan sets out initial action with a focus on 2026-27. On this basis, modelling does not account for the future choices of an incoming Scottish Government, formed after the May 2026 Scottish Government election, which may have a material impact on poverty rates. Estimates of impact and poverty projections beyond 2026-27 should therefore be treated with caution.

The report focuses on two of the four statutory measures of child poverty, namely relative and absolute poverty after housing costs. Relative poverty is defined as having household income below 60% of the UK median. It therefore compares the incomes of households at the lower end of the income distribution with those in the middle. Absolute poverty is defined as having household income below 60% of the 2010-11 UK median, adjusted for inflation. It therefore tracks the extent to which low incomes are keeping up with prices.

The report also contains analysis on deep (or ‘severe’) poverty, defined as having household income below 50% of the UK median; and low income, defined as having household income below 70% of the UK median. For all measures, household income is defined by taking total household income from all sources net of tax, subtracting housing costs, and adjusting for household composition (‘equivalisation’).

All modelling is subject to a degree of uncertainty, relying on a number of assumptions and simplifications, and this modelling is no different. The results presented in this report, particularly projections of outturn poverty rates, should therefore be treated with caution. The estimated projections this year carry an additional degree of uncertainty given planned revisions to the underlying survey data by the Department for Work and Pensions as detailed later in this publication, in addition, to the upcoming Scottish Parliament elections. Poverty projections are not a forecast, they are an estimate of future trends in low-income poverty levels under a specific set of assumptions.

The report finds that:

• Scottish Government policies are estimated to keep 100,000 children out of relative poverty in 2026-27, with the relative child poverty rate ten percentage points lower than it would be without these policies in place. This impact grows over time to reach eleven percentage points (110,000 children) by 2030-31.
• In terms of absolute child poverty, Scottish Government policies are estimated to keep 70,000 children out of poverty in 2026-27 on this measure, with the absolute child poverty rate seven percentage points lower than it would be without these policies in place. This impact grows over time to reach eight percentage points (80,000 children) by 2030-31.
• The Scottish Child Payment, in isolation, is estimated to keep 50,000 children out of relative poverty in 2026-27, with the relative child poverty rate five percentage points lower than it would be without the policy in place.
• The estimated impacts of the policy package on deep child poverty are equivalent to, or greater than, the impacts on relative child poverty. The deep child poverty rate is projected to be eight percentage points lower in 2026-27 than it would be without the policy package in place, representing some 70,000 children who would otherwise be in deep poverty. Since deep poverty is a more severe measure of poverty, the impacts are proportionately greater. An estimated 50% of children who would be in deep poverty without the policy package in place will be kept out of deep poverty in 2026-27, compared to 41% on the relative measure and 26% on the less severe low-income measure.
• Relative child poverty is projected to fall to 18% and absolute child poverty projected to fall to 15% by 2030-31. These are above the 10% relative child poverty and 5% absolute child poverty targets set out in the Child Poverty (Scotland) Act 2017. However, this modelling only takes into account policies that are currently in place or have been announced, and represents current economic forecasts. These estimates are likely to change in the future.
• The effects of a number of Scottish Government policies have not been included in this modelling due to a lack of data or evidence to support their inclusion. These are likely to reduce child poverty further, and include measures such as Whole Family Support and expansion of Early Learning and Childcare.
• Poverty and inequality statistics are being further refined in the coming year, including a new link between survey data and administrative records. This could result in a change in the level of child poverty in subsequent reports due to more accurate recording of households’ income.