Child poverty and support the most vulnerable: letter to UK Government

Dear Mel,

Ahead of the Spring Budget, I am writing to set out key actions which we are calling on the UK Government to take to tackle child poverty and support the most vulnerable in our society.

In Scotland, we are doing everything within the scope of our powers and limited budget to tackle poverty and meet our ambitious child poverty targets. The Scottish Budget 2024-25 unapologetically directs our resources to those in greatest need, with distributional analysis demonstrating that the Scottish tax and social security system is progressive.

It is estimated that 100,000 fewer children will live in relative poverty in 2024-25 as a result of Scottish Government’s policies, with relative poverty levels 10 percentage points lower than they would have otherwise been. This demonstrates the considerable impact that our clear focus on tackling child poverty is having in Scotland. I urge the UK Government to follow our lead and to bring forward a strategy with a similar level of ambition to that of our Tackling Child Poverty Delivery Plan – Best Start, Bright Futures.

However, despite the considerable action we are taking, many of the powers needed to eradicate poverty remain reserved to the UK Government. The Spring Budget is an opportunity for you to take the action needed to transform the lives and outcomes of people across the UK, starting with the actions set out below.

Match the Scottish Child Payment in reserved benefits

In the year ahead we will invest a record £6.3 billion in social security benefits to support the most vulnerable in our society, a full £1.1 billion more than the UK Government gives to the Scottish Government for social security. This includes investment in our Scottish Child Payment, which will increase in value by inflation to £26.70 per eligible child, per week, from April 2024.

Together with our three Best Start Grant payments and Best Start Foods, our Five Family Payments could be worth over £10,000 by the time an eligible child turns 6 and around £25,000 by the time an eligible child turns 16. This compares to less than £2,000 for families in England & Wales.

The Scottish Child Payment has been described as a ‘game-changer’ by anti-poverty stakeholders, with the payment estimated to keep 60,000 children in Scotland out of relative poverty next year. I urge you to match our investment in the Scottish Child Payment by increasing equivalent support through reserved benefits.

Introduce an Essentials Guarantee

As set out in my letter of 29 September 2023, there is considerable evidence that the current level of social security support is not sufficient and is leading to unnecessary hardship across the UK. Scottish Government analysis, published on 28 February 2024, estimates that introducing an Essentials Guarantee as proposed by the Joseph Rowntree Foundation, and uprated by inflation, could result in 30,000 fewer children in Scotland living in relative poverty in 2024-25, with around the same impact on absolute child poverty.

More broadly, an Essentials Guarantee would transform the lives of millions of people across the UK, helping to reduce the need for crisis support, tackling the depth of poverty experienced, and ensuring that social security benefits adequately cover the cost of essentials. This would immeasurably strengthen the safety net provided by social security, and provide the foundations needed for people to move out of poverty. That is why I am urging you, once again, to legislate to put an Essentials Guarantee in place as soon as possible.

Reverse punitive welfare policies

Without addressing wider unfairness in the social security system, an Essentials Guarantee is not sufficient. That is why I continue to urge you to abolish the two-child limit, benefits cap, the bedroom tax, and both the young parent penalty and five week wait in Universal Credit. These policies restrict the amount of support available to some of our most vulnerable people, disproportionately affecting women and children, and build unnecessary hardship into the social security system.

Recent analysis by the Resolution Foundation underlines the urgent need to review these policies. They warn that, by the end of the decade, the benefit cap and two-child limit are due to drive the majority of large families into poverty. They estimate that abolishing these policies next year would cost £3 billion and would lift 490,000 children across the UK out of poverty overnight.

As you know, the Scottish Government is already prioritising our limited resources on mitigating the benefits cap and bedroom tax, with around £1 billion spent on mitigating welfare reforms in the last 14 years. Scottish Government analysis estimates that reversing the two child limit, together with reintroducing the Family Element in Universal Credit, would lift a further 10,000 children out of relative poverty in Scotland, in addition to our policies. I urge you to take action and reverse these damaging policies immediately.

Commit to ensuring Local Housing Rates continue to meet basic rent levels

The freeze to Local Housing Allowance (LHA) rates has also had a significant effect on households in Scotland. In August, LHA rates did not cover the rents of over 40,000 households in Scotland. Of these, the average shortfall for those on Universal Credit was nearly £1,500 per year. While I welcome that LHA rates are being raised in 2024 and you have committed to review LHA rates annually, I note that there is no commitment to link the rates to the 30th percentile of local rents. I call on you to end the uncertainty that households have when taking out a tenancy and commit to ensuring that LHA rates will be sufficient to meet these basic rent levels in future years.

Abolish sanctions and enhance access to financial support when starting work

As you know in Scotland, we have taken a different approach to devolved employability support; our services remain voluntary, and we want the support we provide to be seen as an opportunity, not a threat, with fairness, dignity and respect at its heart. There is considerable evidence that conditionality, and in particular the use of sanctions, is counterproductive in efforts to support people into sustainable work and causes unnecessary hardship. I call for you to urgently abolish the use of sanctions in the social security system.

I welcome the recent positive engagement between Scottish Government and HMRC officials, and the agreement of Treasury Ministers to exempt Scottish local authority payments made to parents starting work from tax and national insurance. Whilst this ensures that parents receive the full benefit of support offered from local authorities limited resources, further action is needed. Stakeholder feedback and anecdotal evidence suggests that financial support through the Jobcentre Plus Flexible Support Fund is still too difficult to access, and not reaching those who need it most. I call on you to commit to proactively promote the help and support available, to ensure that everyone can get the help they need, when they need it. To this end, I ask that eligibility of this fund is re-considered, and people accessing devolved employability support are also able to make use of the support provided by the Flexible Support Fund.

Reverse planned Work Capability Assessment changes

Having recently met with Disabled Peoples Organisations (DPO) to discuss the proposed UK Government Work Capability Assessment (WCA) reforms, I remain deeply concerned that the changes will expose more people to work conditionality and the threat of benefit sanctions. The evidence shows that sanctions do not work and are in fact harmful to people's health and wellbeing, further punishing our most vulnerable people.
Removing the Work Capability Assessment risks conflating incapacity and disability payments – not everyone who is sick and not able to work will qualify for disability payments. There is no safety net for people with short-term ill-health and sickness to manage their condition and live a dignified, independent life. I call on you to stop the implementation of these changes which will lead to disabled people and those with long-term health conditions losing out financially.

Promote uptake of reserved benefits

In Scotland, we actively and vigorously encourage people to apply for the benefits they are eligible for and strive to make applying as easy as possible. We do this through unique initiatives such as a free and independent advocacy service which actively supports disabled people to access and apply for Social Security Scotland benefits, and in-house welfare rights advisors embedded in 180 GP practices in Scotland’s most deprived communities.
It is estimated that in the region of £19 billion of social security support and social tariffs go unclaimed in the UK each year. Ensuring that everyone receives the support they are entitled to has the potential to make a significant positive impact on levels of poverty and deprivation in the UK. I urge you to follow our lead and commit to taking the steps needed to increase uptake of UK Government benefits across the country.

There is no single action in isolation that can bring an end to poverty in the UK. However, as demonstrated in Scotland, with clear focus and determination, change is possible. Poverty lies at the heart of many of the key challenges faced across our communities and I urge you to use the Spring Statement to introduce the policies urgently needed.
I am copying this letter to the Chief Secretary to the Treasury and the Secretary of State for Scotland for awareness.

Yours sincerely,

SHIRLEY-ANNE SOMERVILLE