Bringing Hope, Building Futures: Tackling child poverty delivery plan 2026-2031 – annex 6: Impact of policies on child poverty

Delivering more social and affordable homes for families

Our ambition is to deliver 110,000 warm and affordable homes by 2032 as part of continued investment through the Affordable Housing Supply Programme (AHSP), with 70% for social rent and 10% in rural and island communities. Discretionary Housing Payments will continue to mitigate the effects of the benefit cap and the Local Housing Allowance freeze for families in Scotland to improve affordability. Tenants in Scotland will be given greater protection against issues of disrepair in their homes such as damp and mould through the introduction of Awaab’s Law (Investigation and Commencement of Repair (Scotland) Regulations 2026).

Actions included

• Discretionary Housing Payments (Continuation) - £106m
• Mitigate Local Housing Allowance Freeze (New) - £9m
• Affordable Housing Supply Programme (Strengthened) - £925.9m
• Awaab’s Law (New) - £N/A

Total investment in 2026/27 - £1.04bn.

Impact of actions committed

Type of impact

These measures will have a direct impact on income from benefits/social security by providing additional benefit support, and an indirect effect on costs of living by increasing the supply of affordable homes meeting minimum condition standards via the Affordable Housing Supply Programme.

They will also have an indirect impact on enhanced life chances through promptly addressing damp and mould in the rented sector via Awaab’s Law.

Potential size

Over the next four years, the ambition is that the Affordable Housing Supply Programme will help support the delivery of 36,000 affordable homes which is estimated could provide a warm, safe home for up to 24,000 children (estimation based over four year spending review period 2026/27 to 2029/30).

In 2026/27 we are making £15.5m of Discretionary Housing Payments available to help mitigate the impact of the benefit cap. This includes £7.6m for families who will receive limited or no additional support from the removal of the two-child limit because of the cap. In Scotland 97% of all households affected by the benefit cap are families, and around 70% are lone parent families, making this policy highly targeted.

In addition, the increase in Discretionary Housing Payments to mitigate the effects of the Local Housing Allowance freeze for families is forecast to affect up to 18,000 families with 31,000 children by the end of 2026/27.

In 2024 around 19% of private sector renters and 22% of renters in the social sector were households with children. Evidence suggests children and babies may be more vulnerable to the risks of damp and mould, so although Awaab’s law is not directly targeted, households with children may benefit more than some other groups from improvements to conditions in this sector.

Certainty

High certainty of impact related to additional benefits support. Moderate certainty of impact related to Awaab’s Law. Direct evidence of impact on children/families is more limited for the Affordable Housing Supply Programme as information about recipients of homes and their previous circumstances is not available. Estimates of families and children benefiting from newly delivered Affordable Housing Supply Programme homes are based on characteristics of households across the whole social rented sector from the Scottish Household Survey.

Priority families targeted by the actions

Allocation of homes based on need will benefit all priority families and wider groups relevant to child poverty. The social rented sector has higher rates of people with disabilities than other tenures. Increasing the availability of social rented homes that meet minimum standards for accessibility and housing conditions via the Affordable Housing Supply Programme is likely to benefit those with disabilities. The programme also supports the delivery of specialist housing identified by Local Authorities as a priority via flexible grant subsidy arrangements.

There are some priority groups that are likely to benefit from this area of focus: lone parent households and those with three or more children. Specifically, we know that around 70% of households affected by the benefit cap are lone parents. Further, given the removal of the two-child limit and the increased funding being made available to support households with new or higher benefit cap deductions, we know this funding will also benefit families with three or more children.

The Discretionary Housing Payment support funding for Local Housing Allowance freeze mitigation will benefit all priority families and wider groups relevant to child poverty. According to Scotland’s 2022 census, black and minority ethnic groups are more likely to reside in Scotland’s private rented sector, and therefore may be more likely to benefit from this intervention.

Mitigating the Local Housing Allowance freeze will allow local authorities to support families currently in temporary accommodation to find settled homes in the private rented sector.

Tracking progress

It is not currently possible to quantify the direct contribution of the Affordable Housing Supply Programme towards national child poverty outcomes because direct allocation of homes is not measured. However, a recent external evaluation on the social value of social housing did capture lived experience of positive impacts on children with families of moving to a new social rented home. Annual out-turn reports are published which from 2023-24 includes information on larger family homes delivered as part of the Affordable Housing Supply Programme. This new code was introduced in 2022-23 and there is a time lag as new projects start to use it, where appropriate.

Local authorities provide spending data on Discretionary Housing Payment awards broken down by funding stream (bedroom tax mitigation, benefit cap mitigation, Local Housing Allowance assistance and core purposes), and therefore we are able to monitor coverage of this policy.

It is not currently possible to produce a robust estimate of the effect of Local Housing Allowance shortfalls on national child poverty measures. Local authorities will provide mid-year and end-year spending data – these will allow for monitoring of the level of funding being delivered to families.