Minimum Income Guarantee: report - a roadmap to dignity for all

Introduction

What is a Minimum Income Guarantee?

A Minimum Income Guarantee is a minimum level of income, which varies by need, below which nobody will fall. The cost of living crisis has demonstrated that no one is entirely protected from financial hardship, and that we must go further in providing a safety net. Anyone might need a helping hand at some point in their life, and a Minimum Income Guarantee, delivered through a combination of fair and accessible paid work, reform on costs, high-quality services and adequate social security, would be there as a reassurance for all. No matter your current position in life or what might happen in the future, you will be guranteed a minimum standard of living.

Everyone in Scotland should be able to live with dignity and financial security. However, that is far from the current reality for many and current trajectories show not enough is being done, despite positive steps. The Fraser of Allander Institute project that, even with mitigation of the two-child limit, 20% of Scotland’s children will still be living in relative poverty in 2030-31 unless further action is taken.^[13] This is simply not good enough and leaves us far from meeting Scotland’s legally binding child poverty targets, which include a target that fewer than 10% of children in Scotland live in relative poverty by 2030. Around 8% of households reported having visited a food bank in the last six months with 12% reporting that they had not eaten for a whole day on three or more occasions because they didn’t have enough money for food.14 Poverty is also deepening; the poorest families – those living in very deep poverty – had an average income that was 57% below the poverty line, with this gap increasing by almost two-thirds over the past 25 years.15

This must change. Financial insecurity can affect anyone at different points in their lives and is harmful to society. Living with dignity and financial security is key to unlocking opportunities for all, allowing everyone to reach their potential and thrive.

This report by us, the independent Minimum Income Guarantee Expert Group, outlines how a Minimum Income Guarantee could be introduced in Scotland. It offers a roadmap, setting out the foundational steps using existing powers, in some instances greater flexibility and the current resources available to the Scottish Government. It then outlines the further steps necessary to realise the full potential of a Minimum Income Guarantee. In this way, the report aims to set out a long-term ambition and vision for the future starting here and now.

What do we mean by financial security and living with dignity?

Financial security means having enough money to live comfortably, and that household costs are manageable and can be planned for. It means people having access to savings, affordable credit and advice when they need it. It also includes having security for the future and the ability to recover from financial shocks.^[16]

A dignified standard of living goes beyond definitions of destitution or poverty, towards having enough money to meaningfully participate in society and the ability to access the things that make up a socially acceptable standard of living. In this report we draw on the Minimum Income Standard developed by Loughborough University, which sets out a level of living standards including material needs such as housing, clothing, food, furniture, toiletries and other household goods, and more intangible needs, such as communication, connection and social interaction.^[17]

The process of developing the Roadmap and its recommendations

The Scottish Government set out its commitment to begin work on a Minimum Income Guarantee in its Programme for Government in 2021/22, which included commissioning and providing support and funding for this work.^[18]

This followed years of work by stakeholders in Scotland, leading up to the publication of IPPR Scotland’s report ‘Securing a living income in Scotland: Towards a Minimum Income Guarantee’^[19] in 2021. This set the foundations for the design of a Minimum Income Guarantee for Scotland and secured cross-party support for the idea following the 2021 Scottish Parliament elections.

The Scottish Government established a Minimum Income Guarantee Steering Group in 2021 to consider both design and delivery issues and make recommendations that would enable a Minimum Income Guarantee to be introduced over time. It was made up of a cross-party Strategy Group and this Expert Group with representation from academia, trade unions, and third sector poverty and equality organisations.

We published our interim report^[20] in March 2023, outlining initial thoughts around what a Minimum Income Guarantee could look like in Scotland. This included the development of a set of foundation principles for design and delivery of a Minimum Income Guarantee. It set out the remaining questions that we would need to address, such as: what income level the Minimum Income Guarantee would be set at; who would be eligible; and how fair work, services and social security could interact. This final report aims to answer these questions, and to more broadly outline how a Minimum Income Guarantee can be delivered.

Working with people with lived experience of financial insecurity has been fundamental to answering these questions and creating a roadmap to delivery. The first decision we made was to commission an Experts by Experience Panel to help to shape the work. Made up of diverse members of the public with current or past experiences of financial insecurity, the Experts by Experience Panel deliberated on the complexities of designing a Minimum Income Guarantee and provided rich insights which have informed our decision-making. This process was iterative and supported live decisions. Evidence from each panel meeting was presented and reflected in Expert Group meetings. The Panel’s meeting notes have not been published, however a summary of their views can be found across Expert Group meeting minutes and evidence papers. The Experts by Experience Panel’s final report was published in July 2024. This provides an overview of their deliberative discussions and sets out principles for decision-makers, now and in the future, for design and delivery. This has been built into our Roadmap.

Throughout the development of this Roadmap we considered a range of evidence to reach decisions and inform the direction of a Minimum Income Guarantee in Scotland; the evidence papers and meeting minutes are available online and are referenced at relevant sections of this report.

We also commissioned further research to help inform our thinking and again this work is referenced in this report and available online.

• WPI Economics: Economic Impact of a Minimum Income Guarantee: Analysis of economic theory and policy evidence
• WPI Economics: How to pay for a Minimum Income Guarantee
• Progressive Partnership: Framing a Minimum Income Guarantee
• The Collective: Intersectional Analysis of the work of the Minimum Income Guarantee Expert Group

Building on the interim report, we have used these outputs to form an ambitious vision for a Minimum Income Guarantee.