Learning from 25 years of preventative interventions in Scotland

13. Scottish Child Payment (SCP)

Scottish Child Payment: Reducing Child Poverty through Targeted Payments

The Scottish Child Payment (SCP) was introduced in 2021. It provides payments every four weeks to families receiving a qualifying reserved means tested benefit (e.g. Universal Credit) for each child under 16. Data and modelling indicate that SCP is acting to reduce the number of children growing up in poverty in Scotland.

Reducing child poverty will lead to improved outcomes for children and families and could reduce demand on future public services, and contribute to increased revenue from taxation through improved employment outcomes.

Introduction

The SCP is an example of a downstream primary preventative intervention. The introduction of the SCP marks a significant policy departure from the rest of the UK. It is anticipated that SCP will lead to measurable reductions in levels of child poverty in Scotland.

Context

Growing up in poverty is associated with a range of negative outcomes. Children growing up in poverty are less likely to do well at school, more likely to experience social and behavioural difficulties and more likely to have poorer mental and physical health.^[285] Experiencing poverty for any period of time has an impact on children and families’ outcomes and wellbeing^[286] and the effects of growing up in poverty often result in worse outcomes across the life course. It has been estimated that child poverty costs Scotland around £3 billion a year.^[287]

There are a number of ways of conceptualising and measuring child poverty. The most commonly used definition which is used by the Scottish Government, UK Government and EU considers children to be in poverty if they live in households with less than 60% of equivalised median household income. This is a relative measure that is affected by levels of inequality within society.

Levels of relative Child poverty have changed over time as a result of economic conditions and deliberate policy choices. After two decades of consistently low levels of child poverty in the 1960s and 1970s the percentage of children in poverty in Scotland doubled during the 1980s and by 1990, children had displaced pensioners as the single largest group in poverty. In the 1990s child poverty in the UK was higher than any other country in the EU. By 1997 around one in three children were living in poverty in Scotland.

In the lead up to the 1997 General Election, the UK Labour Party promised to halve child poverty by 2010. In 1999 Prime Minister, Tony Blair, committed to ending it "in a generation". Once elected a series of policies were introduced which served to substantially reduce child poverty, most notably additional spending on benefits and tax credits. As a result of these interventions, and the commitment of the newly established Scottish Executive, rates of child poverty fell by over a quarter between 1999 and 2005.^[288]

Since 2003-04 Scotland has had a lower rate of child poverty than the rest of the UK. In 2017 the Scottish Government passed the Child Poverty (Scotland) Act. This Act was unanimously supported by all of the political parties in Holyrood. The Act introduced challenging targets for 2030 and interim targets in 2023/24. The Act also committed the Scottish Government to publish Child Poverty Delivery plans in 2018, 2022 and 2026. No corresponding child poverty reduction targets were set for other parts of the UK.

Response

There was a recognition from Ministers and civil society that bold action would be required to meet the challenging new child poverty targets. In 2017 and 2018 anti-poverty organisations were beginning to coalesce around a campaign to increase child benefit payments in Scotland and increasingly organisations were beginning to recognise the potential role of Scotland’s newly created Social Security Agency with its focus on ‘dignity’, ‘fairness’ and ‘respect’ as a catalyst for reducing child poverty.

The Poverty and Inequality Commission advised the Scottish Government that ‘investment in social security is needed if the targets are to be met’^[289] and the Scottish Government responded by committing to introduce a new income supplement for low income families in the 2018 Child Poverty Delivery Plan.^[290] This announcement was warmly welcomed by anti-poverty stakeholders and marked a significant policy divergence for Scotland from the rest of the UK.

The 2019-20 Programme for Government set out a Scottish Government commitment to bring forward regulations to introduce a new Scottish Child Payment (SCP) of £10 per week.^[291] Five different policy options were initially modelled to understand their effectiveness in reducing child poverty.^[292] The SCP was designed in consultation with members of each of the six priority groups identified in the 2018 Child Poverty Delivery Plan. Detailed considerations in relation to how to maximise impact and take up were set out in Equality^[293] and Fairer Scotland impact assessments.^[294]

Legislation to introduce the SCP was progressed on an accelerated timetable. The policy development included targeted engagement with stakeholders but did not include a formal public consultation and the payment was introduced through the use of regulations rather than primary legislation.^[295]

Intervention

SCP is intended to deliver regular, additional financial help to low income families. Its purpose is to assist with the costs of raising a family, but it is up to recipients to choose how they spend the money. The payment began in 2021 as a weekly sum of £10 for each eligible child in the family under six, paid every four weeks. Eligibility is linked to receipt of UK Government means tested benefits.

The payment amount doubled to £20 per week in April 2022. In November 2022 the payment was extended to include eligible children under 16 and increased to £25. It was further uprated to £26.70 from April 2024 and is due to increase again in April 2025 to £27.15. The total spend on the SCP in 2023/4 was £429m. This is forecast to increase to £471m in 2025/6.^[296]

The broad aims of the SCP at the point of introduction were to:

• Achieve a reduction in child poverty of three percentage points when the benefit is fully rolled out, compared to if the benefit had not been in place
• Reduce the depth of poverty by increasing incomes of people not just below the poverty line but those further below it
• Ensure a sustainable and lasting reduction in poverty for families with children.

The short and medium term outcomes and longer term impacts associated with SCP are set out in Figure 1. These include a number of preventative outcomes.

Source: Scottish Government (2022) Interim Evaluation of Scottish Child Payment

This diagram shows a logic model of the Scottish Child Payment intervention. It shows the expected immediate, short-term, medium term outcomes and the long-term impacts.

The immediate outcomes include: SCP is well promoted; SCP and its eligibility criteria are well understood; SCP is taken up; Making an application is clear and easy; Applications are processed in a timely manner; Awareness is raised about other forms of support; Clients feel they have been treated with dignity fairness and respect.

The short-term outcomes include: Increased child-related spend, Reduced pressure on household finances; Reduced money-related stress; Children are able to participate in social and educational opportunities; and Improved position of main carers within households.

The medium-term outcomes include: Reduced incidence of debt; Improved health and wellbeing; Reduced incidence of material deprivation; Reduced barriers to education and the labour market; and Positive impact on Scottish economy.

The long-term outcomes include: Reduced child poverty; Reduced inequality of outcomes for children; and Reduced incidence of social exclusion.

Monitoring and Evaluation

As set out above the introduction of the SCP was informed by detailed analytical work. This included work to model the impact of the new payment in reducing the number of children in poverty.

In addition to this analysis an interim evaluation was commissioned and published in July 2022.^[297]

Whilst it is too early to understand fully how the SCP is supporting improvements in medium to long term outcomes the interim evaluation of the SCP concluded that it is ‘likely to have contributed positively to the Scottish Government’s long-term aims’.^[298]

Further evaluation of the SCP is underway and will report in summer 2025. It will use quantitative data from a large-scale survey, complemented by qualitative data from interviews to assess the medium-term impact of the payment on debt, material deprivation, food insecurity, and health and wellbeing. It will measure outcomes for both households and children, and how the payment affects different groups based on factors such as demographics and household characteristics.

Key Findings

a) Reduction in Child Poverty

In 2023-24, the first full year in which SCP was rolled out to under-16s and increased in value, 22% of children in Scotland were living in relative poverty – a reduction from 26% in the previous year, when SCP was partially rolled out.^[299] Scottish Government analysis has found that the child poverty rate would have been four percentage points higher in 2023-24 if SCP had not been in place.^[300] A similar impact is modelled for 2025-26, with the relative child poverty rate in that year estimated to be four percentage points lower than it would be without SCP in place.

Over recent years there have been several attempts by organisations such as the Joseph Rowntree Foundation,^{[301],[302],[303]} the Scottish Parliament^[304],[305] and the Fraser of Allander Institute^[306],[307] to model and quantify the impact of the SCP on child poverty. Whilst this modelling has been based on different assumptions and was conducted at different points in time they have all concluded that the SCP has a substantial impact on reducing child poverty.

b) Improved Outcomes

The interim process evaluation was largely based on qualitative interviews and identified a number of positive effects for children and families. Participants reported that they had been able to spend more money on their children, which included enabling children to participate in social and educational opportunities.

The SCP was also found to have helped reduce financial pressure on households and helped families to avoid getting into debt. Participants also reported improved parental physical and mental health through ensuring that families could afford to eat and improving mental health through reducing parents’ financial worries around everyday budgeting.

Analysis from the Fraser of Allander Research Institute suggests the SCP successfully reduces food bank usage for specific types of households, particularly single-adult households.^[308]

Evidence submitted to the Scottish Parliament’s May 2024 inquiry on the SCP provided further qualitative examples of the impact of the SCP:

“The Scottish Child Payment has helped so much. I have three children and felt like I was moving from one money crisis to the next. Now that I get a payment for my older son as well it’s been a bit of a lifesaver. I still struggle don’t get me wrong but if it wasn’t there well I’d be in really bad debt.” ^[309]

c) Scotland’s relative performance

There is evidence to suggest that SCP is improving Scotland’s performance on child poverty relative to other UK nations. Child poverty statistics published in March 2025 showed that for 2023-24, 22% of children living in Scotland were in relative poverty compared with 31% of children living in within the UK^[310]. The latest statistics showed a four percentage point annual reduction in the percentage of children in Scotland in relative poverty. Distributional analysis for the 2025/6 Budget shows that the SCP is the largest single contributor to the improved financial resources of low income households relative to the rest of the UK.^[311]

The 2023 Joseph Rowntree Foundation ‘Destitution in the UK’ report^[312] concluded that ‘Scotland had improved its position, having experienced by far the lowest increase since 2019. This may be indicative of the growing divergence in welfare benefits policies in Scotland, notably the introduction of the Scottish Child Payment.’ Similarly, the Trussell Trust^[313] found that Scotland saw a smaller percentage increase in the number of food parcels for children from November 2022 to March 2023 compared with the same period in 2021/22 than other UK nations. It suggested that this may be related to the extension of eligibility for SCP and the increase to £25 a week introduced in November 2022.

d) Effective implementation and high take up

The preventative impact of the SCP is also likely to have been amplified as a result of effective administration of the payment by Social Security Scotland. The latest statistics estimate that the take-up rate (the proportion of people eligible for the payment who go on to get it) of SCP for all children aged under 16 in 2023-24 is 89%. Analysis of quarterly SCP take-up rates throughout 2023-24, for June, September, December and March, show estimated take-up rates for all children aged under 16 steadily increasing over that time. The estimated take-up rate of SCP for children aged under 6 in 2023-24 is 97%.^[314] The difference in these take-up rates may be explained by children aged under 6 having been eligible for SCP for longer, since February 2021, while children aged 6 to 15 have only been eligible since November 2022. The Scottish Fiscal Commission^[315] expect take-up rates for children aged under 6 and under 16 to broadly converge over time.

Learning and Next Steps

The SCP is an example of a targeted primary preventative intervention. It has been described as a ‘game changer’ by the Scottish Poverty and Inequality Commission. By increasing the disposable income of eligible families with children up to the age of sixteen, it could over time contribute to reducing levels of child poverty in Scotland. In the meantime, the evidence to date suggests that the payment is being used to cover essentials and provide opportunities for children to participate in activities that their families would not otherwise be able to afford.

The level of cross party support for the SCP is also notable. For example, all five of the main political parties in Scotland pledged, in their manifestos for the 2021 election, to double the SCP weekly payment.

Whilst the SCP has been an effective preventative intervention there will inevitably be opportunities to further refine the delivery and development of SCP.

More recently there have been calls from some stakeholders to further increase SCP and modelling to suggest that ‘increases to SCP are the most effective tool available to the Scottish Government’ to meet its child poverty targets.^[316] However in reality meeting the 2030 targets is likely to require a package of measures, the Poverty and Inequality Commission have been clear in their advice that “reaching the targets through use of devolved social security powers alone is not realistic.”^[317] While an income supplement for low income families will contribute towards meeting the child poverty targets, a range of other policies and programmes will also be required to meet the 2030 Child Poverty targets.