Chapter 7: Poverty and Social Exclusion
Promoting inclusive growth is central to Scotland's Economic Strategy. Improving equality and tackling inequalities - social, regional and inter-generational - are not only desirable outcomes in themselves, but are also essential for improving economic performance.
This chapter sets out the actions being undertaken throughout Scotland to deliver inclusive growth, tackle child poverty and income inequality and maximise the potential of all areas of Scotland. These policies and actions cover one of the European Commission's Country-Specific Recommendations to the UK relating to improving the availability of affordable, high-quality, full-time childcare, and strongly support the Europe 2020 flagship initiative, "European platform against poverty and social exclusion".
Europe 2020 headline target:
The number of Europeans living below the national poverty line should be reduced by 25 per cent, lifting over 20 million people out of poverty.
Current Scottish Performance
Progress in Scotland in this area is measured through the Scottish Government's National Performance Framework, which includes measures relevant to poverty and social inclusion. Scotland's current performance is presented in Table 5.
Table 5 - Current Scottish Performance Against Poverty and Social Inclusion Indicators
Change Over Year
Proportion of income earned by the top 10% compared to the bottom 40% (Solidarity Target)
Increased from 121
Reduce the proportion of individuals living in poverty - this is measured in terms of the percentage of people living in relative poverty (below 60% of UK median income before housing costs)
17% of the population in relative poverty
Increased from 16% in 2013-16
Reduce children's deprivation National Indicator - this is measured in terms of percentage of children in combined material deprivation (based on a suite of questions in the Family Resources Survey) and low income (below 70% of UK median income) before housing costs
11% of children in combined material derivation
Increased from 10% in 2014-17
Delivering Inclusive Growth
The Europe 2020 vision of inclusive growth is for a high‑employment economy delivering economic, social and territorial cohesion. The Europe 2020 Strategy identifies that this will require making full use of labour potential; spreading the benefits of economic growth to all areas; ensuring access and opportunities for all throughout the lifecycle; and promoting gender equality.
As highlighted in Chapter 2, inclusive growth is a central priority of Scotland's Economic Strategy. The Scottish Government is committed to ensuring that economic growth is inclusive and is shared across all of the people and parts of Scotland. A more cohesive economy that improves the opportunities, life chances and wellbeing of every citizen in Scotland not only improves outcomes for individuals and households, but is a critical driver of economic performance over the long term. This approach - which includes investing in the early years, promoting fair work and protecting households from current economic pressures - is embedded in the foundations of Scotland's Economic Strategy.
Making growth more inclusive is important for improving both Scotland's economic competitiveness, reducing wider inequalities, and improving opportunities for all. As highlighted previously, the Scottish Government is working with partners to drive this agenda across a range of areas, including:
- Initiatives to improve the quality of workplaces in Scotland, such as the Business Pledge.
- Carrying out an Enterprise and Skills Review to ensure that public agencies are delivering the support that young people, universities, colleges and businesses need.
Tackling poverty and inequality is central to what the Scottish Government is seeking to achieve. In October 2016, the Scottish Government published the Fairer Scotland Action Plan (FSAP), which sets out 50 selected actions over this Parliamentary term under five themes of:
- A Fairer Scotland For All;
- An End To Child Poverty;
- A Strong Start For All Young People;
- Fairer Working Lives; and
- A Thriving Third Age.
In December 2018 we published our second update on the FSAP, highlighting considerable progress we have made. This update also recognises our continued commitment to the original ambition: to build a better country - one with low levels of poverty and inequality, genuine equality of opportunity, stronger life chances and support for all those who need it.
Key achievements to date include:
- Becoming the only part of the UK to introduce a Socio-Economic Duty which asks key public bodies to consider carefully the impacts on tackling poverty and reducing inequality whenever they are taking major, strategic decisions
- Providing £13 million from the Aspiring Communities Fund to 140 community-led projects to tackle poverty and promote social inclusion at localities across Scotland
- Launching a new Financial Health Check service, backed by £3.3 million over 2018-20. This service will help low income individuals maximize their income by ensuring that they are not paying the poverty premium and that they are receiving all the benefits, grants and exemptions to which they are entitled.
- Providing a baby box to every new-born in Scotland since August 2017
- Establishing a £50 million Tackling Child Poverty Fund to get innovative work off the ground to help low income families via local and national activity.
- Increasing Carer's Allowance from £62.70 per week to the same level as Job Seeker's Allowance (£73.10) and made a commitment to increase the levels for those caring for more than one disabled child.
Every Child, Every Chance
In March 2018 the Scottish Government published 'Every Child, Every Chance: The Tackling Child Poverty Delivery Plan 2018‑22'. This is the first of three delivery plans which will be published by the Scottish Government in order to meet the ambitious targets set out in the Child Poverty (Scotland) Act 2017. The Plan sets out a range of actions aimed at meeting the targets by increasing family incomes and reducing household costs.
Key commitments include:
- Investing an additional £12 million for intensive parental employment support; helping parents to enter and progress in work;
- Almost doubling publically funded early learning and childcare by 2020 and have committed to delivering a draft strategic framework on After School and holiday childcare, for public consultation in Summer 2019;
- Continuing our commitment to the real Living Wage by working to lift at least 25,000 more people onto this rate through our work to build a Living Wage nation;
- Working towards introducing a new income supplement for low income families;
- Investing £2 million to expand the Children's Neighbourhoods Scotland programme to improve a range of outcomes for children;
- Establishing a new £7.5 million innovation fund with the Hunter Foundation.
The first report outlining our progress on delivering these actions will be published by the end of June 2019, however our Plan has already started to deliver by:
- Establishing a new agreed minimum amount for the School Clothing Grant of £100, in every local authority in Scotland - estimated to benefit 120,000 children this year.
- Successfully launching the first stage of the Best Start Grant providing £600 to low-income families on the birth of their first child and £300 for subsequent children.
- Launching a new Financial Health Check Service, estimated to help 15,000 families each year to maximise their incomes and reduce costs.
Progress reports will be published annually on the Delivery Plan. Alongside this Local Authorities and Health Boards will publish jointly publish progress reports outlining the action they have taken, and plan to take in future. The first of these reports will be published by the end of June 2019.
The Scottish Government's Social Security (Scotland) Act 2018 was unanimously passed by the Scottish Parliament on 25 April 2018 and put in place the legislative framework to create a new social security system based on dignity, fairness and respect. This includes the safe and secure transition of 11 benefits and the establishment of a social security agency for Scotland - Social Security Scotland officially became an executive agency of the Scottish Government on 1 September 2018.
The first benefit to be delivered by Social Security Scotland was the Carer's Allowance Supplement. Carers tend to live in lower income households. The Scottish Government has increased Carer's Allowance by 13% for carers in Scotland through the Carer's Allowance Supplement. In 2018-19 this has provided over 75,000 carers with an extra £442, and will be increased annually in line with inflation.
In autumn 2019 the Scottish Government will introduce a Young Carer Grant, and £300 annual payment for carers aged 16 and 17 (and 18 if still at school) caring for 16 hours or more weekly for someone in receipt of certain disability benefits. The aim of the Young Carer Grant is to help young people improve their quality of life and help them improve their health and education outcomes. Recipients of the Young Carer Grant will also be provided with free bus travel from 2020-21, subject to successful piloting.
The Scottish Government also replaced and expanded on the Sure Start Maternity Grant with the Best Start Grant Pregnancy and Baby Payment in December 2018. This increases the payment to the first child from £500 to £600 and introduces £300 birth payments for second and subsequent children. A further two additional payments of £250, per child, will be introduced at key transition points in the early years and are set to be delivered by summer 2019. The extra money provided through the Best Start Grant will help decrease the financial pressures on the household, which can have negative effects on maternal health, mental health, parenting skills and family relationships.
The Scottish Government intends to introduce a Job Grant for young people aged 16 to 24 who are starting work after a period of 6 months or more out of paid employment. The Job Grant will comprise of a one-off payment of either £250 or £400, the higher amount being payable to young people who have children. The Job Grant aims to meet the immediate costs of transitioning into employment, as well as contributing towards longer‑term outcomes, such as improvements in employment and health.
Funeral Expense Assistance will launch in summer 2019, replacing the current Department of Work and Pensions Funeral Payment in Scotland. The Scottish Government will widen eligibility by 40% compared to the current payment, providing improved support to far more people on low incomes who are struggling with funeral costs. This widened eligibility is backed by around £2 million of Scottish Government funding in the first full year of operation. Delivery of Funeral Expense Assistance is one of ten actions in our Funeral Costs Plan, which was published in August 2017.
The Scottish Government has maintained the Scottish Welfare Fund, a grant based scheme delivered by local authorities, at £38 million to provide help to the most vulnerable in times of crisis. From 1 April 2013 until 30 September 2018, 316,095 individual households in Scotland have been helped with awards totalling more than £181 million. £76.3 million of that has gone to households with children, that is 42% of the total amount awarded.
Expanding Early Learning and Childcare
The Scottish Government continues to take strong action to improve the availability of affordable, high-quality, full time childcare.
In Scotland, through the Children and Young People (Scotland) Act 2014, entitlement to funded early learning and childcare (ELC) increased to 600 hours for all 3 and 4 year olds and to eligible 2 year olds. The Act also made it a legal requirement for local authorities to consult parents in order to increase flexibility and choice over how ELC is accessed.
The Scottish Government is committed to further expanding the entitlement and will nearly double the funded early learning and childcare entitlement to 1,140 hours per year by 2020.
This will be high quality, flexible early learning and childcare that is accessible and affordable for families.
In December 2018 the Scottish Government published the new Funding Follows the Child approach will be introduced in August 2020 alongside the statutory roll-out of the expanded entitlement. This approach is 'provider neutral' and is underpinned by a National Standard that all settings who wish to become a funded provider - regardless of whether they are in the public, private or third sector, or if they are a childminder - will have to meet.
However, the evidence is clear that if ELC is to help give children the best start in life and contribute to closing the poverty related attainment gap, it must be of high quality. That is why at the heart of the National Standard are a clear and consistent set of quality criteria, recognising that the ELC expansion is fundamentally about improving the early years' experience of Scotland's youngest children.
Whilst the National Standard sets a minimum quality threshold for providers delivering the funded hours, we want to see quality enhanced further still - and more settings continuously striving to improve the quality of ELC across the sector. The Scottish Government published a Quality Action Plan in October 2017, which contains 15 actions to further embed and strengthen quality in early learning and childcare.
The expansion will require substantial increases in the workforce and investment in infrastructure. To support this the Scottish Government and COSLA have agreed a multi-year funding package which will see annual revenue investment in early learning and childcare increase by around £567 million on 2016-17 levels. £476 million in capital funding will also be provided over the four year period to 2020-21.
The funding package also includes funding to support the payment of sustainable rates to providers delivering the funded entitlement; to enable payment of at least the real Living Wage to all childcare workers delivering the funded hours; and to provide a free meal to every child attending a funded ELC session from August 2020.
On 19 December 2018 the Scottish Government published a Delivery Support Plan for Providers, to set out how providers, including childminders, will be supported through the transition to 2020. This builds on existing support including the 100% rate relief for private properties wholly or mainly used as day nurseries, which was introduced in April 2018.
The total benefit to families from 1,140 hours of funded entitlement is estimated to be worth around £4,500 a year per child, enabling more families to keep more of their income. This will make a vital contribution to the Scottish Government's priorities to grow Scotland's economy, tackle inequality, and close the attainment gap.
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