Tackling child poverty delivery plan: progress report 2022 to 2023

Introduction

This is the first annual report for ‘Best Start, Bright Futures’, the Scottish Government’s second Tackling Child Poverty Delivery Plan for the period 2022-26. Across the reporting period of April 2022 to March 2023, the UK has faced the worst cost of living crisis in living memory, with increases in the price of essentials including food and energy disproportionately impacting on those living on the lowest incomes, and soaring inflation placing ever greater pressure on public finances.

The Scottish Government acted decisively through the Emergency Budget Review to enhance the immediate support available for people and businesses impacted by the cost crisis and to rebalance the Scottish Budget - which was estimated to be worth £1.7 billion less in November 2022 than when it was introduced to Parliament in December 2021.

These challenging circumstances have meant that it has not been possible to deliver the levels of investment in key measures anticipated when ‘Best Start, Bright Futures’ was published in March 2022. However, as reinforced at the First Minister’s Anti-Poverty Summit in May 2023, there is broad support for the approach set out and for the continued need to focus on both those actions which provide immediate support to families and those which will deliver positive impact in the medium to longer term.

The way that actions are delivered are key to the Plan’s success. Therefore, in 2022-23 we have taken a new approach to delivery. We established robust governance arrangements to oversee implementation of the Plan, including the creation of a new Tackling Child Poverty Programme Board. The approach we have taken is one of the first transformational change programme of this size in the Scottish Government, driving collective leadership, collaboration and accountability for improving the lives of children and families most affected by poverty.

Following the first year of this governance approach, we undertook a review of the Tackling Child Poverty Programme Board to assess its impact and to understand what lessons could be taken into year two of the Plan. Findings from the review suggest that the Board has improved cross-government accountability and ownership of actions in the Plan, with the Board implementing recommendations to further strengthen governance in the year ahead in order to support greater cross government working to deliver on commitments at the pace and scale required.

As we take forward actions in the next year, we will give consideration to the recommendations made by the Minimum Income Guarantee Expert Group in their interim report – including in areas such as support for childcare costs, automating benefit entitlement and promoting fair work practices – and look forward to receiving their full report in 2024.

It is important to note that ‘Best Start, Bright Futures’ was published alongside our Keeping The Promise Implementation Plan, which sets out the actions and commitments that will be taken across government as part of our commitment to Keeping The Promise by 2030. There is a clear relationship between poverty and the care system, and The Promise tells us that it is impossible to review Scotland’s care system without properly considering the pervasive impact of poverty. The stabilisation of family circumstances through effective whole family support is providing a platform for income maximisation and employability within families that are receiving it, and evidence from The Promise tells us that meeting our child poverty targets is likely to help us keep more children at home and keep The Promise.

As set out in the Medium Term Financial Strategy, the Scottish Government will prioritise the programmes which have the greatest impact on delivery of the three missions set out in our policy prospectus. Tough choices and targeting will be needed to ensure we reduce levels of child poverty.

The first section of this report details key progress in implementing the actions set out in ‘Best Start, Bright Futures’ and additional action taken during the reporting year to strengthen protections in response to the cost of living crisis.

Updates are set out under the thematic areas of focus for the first year of our new programme approach to delivery, with a focus on the impact of actions and key developments over the reporting period. In this section we also respond to observations made by the Poverty and Inequality Commission in relation to specific policies, and detail how we will work to address these through our next steps.

Brief updates on actions committed within the Plan which have not been incorporated within this section can be found within the ‘at a glance’ table later in this report.

Section two of this report sets out our latest assessment of progress toward the targets set in statute by the Child Poverty (Scotland) Act 2017, including for each of the six priority family types^[1] identified in ‘Best Start, Bright Futures’, and considers trends in the drivers of child poverty reductions.

This section includes the first data (2021-22) reflective of the impact of the COVID-19 pandemic on levels of child poverty in Scotland. Whilst the most recent single year data shows a slight drop in relative and absolute poverty, alongside low income and material deprivation, longer term data shows that levels of poverty are broadly stable. In relation to persistent poverty, data shows a slow upward trend.

However it is important to note that these levels do not yet capture the impact of the expansion and increase in value of the Scottish Child Payment, alongside other measures implemented in 2022-23.

The full impact of the ongoing cost of living crisis is not yet known. However, available evidence shows that low income households are entering this crisis with less resources and tools at their disposal. Increasing income through paid employment is an important tool. However, there remain challenges for many to increase the amount they work. Importantly, many people struggle to find work that matches their skills, which may pay better. In addition, for many families, the real value of benefits is sharply eroded by high inflation.

Whilst economic modelling cannot precisely account for what may happen, particularly in the context of the cost of living crisis, inflation rises and ongoing international instability, we anticipate on the basis of current information that around 90,000 fewer children are expected to live in relative and absolute poverty as a result of Scottish Government policies, with around 19% of children projected to live in relative poverty, and around 16% of children projected to live in absolute poverty in 2023-24. However, as the economic situation evolves and the actual impact of our policies becomes clearer, this Government will continue to consider further actions required over the lifetime of the Plan to achieve our statutory targets, to support families, and break the cycle of child poverty.

The third section of this report includes a series of ‘at a glance summaries’ providing quick reference to key information regarding progress and action in relation to child poverty.

This includes: an overview of progress on each action committed in ‘Best Start, Bright Futures’; a short progress update on actions not included within the main body of this report; detail of investment through our Tackling Child Poverty Fund; the latest estimates of spend targeted toward low income households and children; and details of how this report meets the requirements of the Child Poverty (Scotland) Act 2017, including the Scottish Government’s response to the recommendations of the Poverty and Inequality Commission.

As in previous years, this report is accompanied by a series of annexes with further technical information.

At Annex A we provide updated data and trends in relation to each of the 26 indicators included within our updated Child Poverty Measurement Framework. This annex is discussed in the second section of this report.

Annex B provides an update of the Cumulative Impact Assessment. This presents updated modelling of the projected relative and absolute poverty rates in Scotland.

Annex C sets out our approach to reporting evidence by each of the six priority family types identified, and sets out how best to utilise the priority family concept to inform development and delivery of effective policy.

We will also shortly publish an additional annex detailing an evidence review in relation to the impact of the cost of living crisis for families living in poverty.