Understanding the changing nature and context of poverty in Scottish rural and island communities since 2010

Executive summary

Introduction

Rural poverty rates in Scotland rose from 13% in 2012-2015 to 18% in 2018-2021. This report explores this rise and the distinct challenges facing rural and island communities. It brings together analysis from a wide range of datasets and sources, alongside insights from stakeholders and experts by experience, to provide an overview of poverty trends and patterns of poverty in Scottish rural and island communities from 2010 onwards, as well as the nature of poverty experienced in these communities. The report identifies potential drivers of these observed changes and outlines implications for policy, practice and research, while also making suggestions on how to enhance the data infrastructure to support improved analysis of rural and island poverty. The analysis explored multiple poverty measures and poverty proxies to capture diverse household experiences. It also applied Scottish Government geographical classifications to enable granular, local level analysis.

Key findings

• While rural Scotland has overall experienced lower poverty rates than urban areas since 2010, significant and widening disparities in rates of poverty exist between rural, remote and island communities.
• Remote rural areas (including most Scottish islands) and remote small towns have experienced a marked and consistent, although temporary, increase in relative poverty after housing costs between 2012 and 2017, while rates in urban areas have remained broadly stable.
• In remote areas, the poverty rate increased from one in eight individuals to one in five individuals during this period, resulting in poverty rates more closely aligned with thoseseen in urban areas.
• The increase in relative poverty between 2012 and 2017 primarily affected working-age individuals in remote areas.
• Since 2018, relative poverty rates in remote areas have broadly returned to the lower levels seen previously.
• Accessible rural areas saw a consistent, small increase in relative poverty between 2015 and 2019 from one in seven individuals to one in six individuals.
• However, a small but steady increase in child poverty was noted in accessible rural areas from one in seven children in 2014-17 to one in five children in 2018-21, narrowing the gap between child poverty rates in these areas and in the rest of Scotland over this period.
• Relative poverty rates among pensioners showed a consistent, slightly rising trend across Scotland, with rates remaining geographically comparable across areas.
• In-work poverty increased in both remote and accessible rural areas, with rates now approaching those seen in the rest of Scotland.

Children in low income families

• Between 2015 (when data became available) and 2023, the proportion of children in relative low income families increased from one in seven to one in five across Scotland, with islands and remote areas experiencing the same upward trend despite lower baseline rates.
• Island and remote areas show a distinct poverty profile, with nearly three-quarters of children in relative low income families having a working parent, compared to six in ten in other areas in Scotland.
• Since 2015, relative low income families in rural, islands and remote areas have shown a steady increase in the proportion of children in lone parent families, and they now represent a majority. The opposite pattern is seen in larger cities.

Fuel poverty

• Nearly 80% of fuel poor households in remote rural areas were in extreme fuel poverty in 2019.
• For the whole of Scotland, fuel poverty rates declined between 2013 and 2019, particularly in large urban areas and accessible small towns, from one in three households to one in four households in fuel poverty.
• In 2019, households in remote rural areas experienced higher levels of fuel poverty than households in other geographical areas, except for households in remote small towns that showed similar levels. Four in ten households in remote rural areas were fuel poor in 2019.
• In 2023, one in three households were fuel poor in Scotland, indicating a reversal of the declining trend seen up to 2019.

Food insecurity and free school meal registrations

• Food insecurity remains lower in rural areas, affecting one in ten households compared to one in seven in the rest of Scotland between 2019 and 2023. Over the same period, free school meal registrations were also consistently lower in rural areas compared to other areas and showed smaller increases over time.

Potential drivers of rural and island poverty trends

• These variations in poverty trends between geographical areas are likely to result from multiple intersecting factors related to changes in demographics, employment challenges, housing pressures, geopolitical changes and access to public services amongst others.
• Geographical variations in demographic and employment trends are likely to be closely related to poverty patterns. Between 2011 and 2021, accessible rural areas experienced population and working-age growth with low unemployment, while remote areas faced working-age population decline, household composition shifts towards smaller, older households, and drops in the temporary employment rate that coincided with rising relative poverty.
• Housing trends reinforced geographical poverty patterns, with remote small towns experiencing declining levels of owner-occupation and rising levels of private renting. The relative poverty increases seen between 2012 and 2017 disproportionately affected all renters in rural areas, among whom there was a rise in poverty. Nevertheless, rural areas maintained better overall housing affordability compared to urban areas, despite geographical convergence over time.
• Rural and island communities face compounding housing pressures from short-term holiday lets removing residential housing stock and structural disadvantages including older, less energy-efficient properties with limited mains gas connection, increasing the risk of fuel poverty.
• The views of stakeholders and experts by experience highlighted that the centralisation of public services (e.g. moving services to fewer, more central locations) may create barriers to access for rural and island communities, while limited retail competition may drive up local costs, creating a ‘rural premium’ that disproportionately affects low income households.
• The lead up to and aftermath of Brexit were identified across multiple sources as contributing to the relative poverty increases between 2012 and 2017, with Scottish Government analysis confirming that many economically vulnerable areas were in rural and island communities.

Key implications for policy, practice and research

This analysis of rural and island poverty trends and potential drivers points to several key implications for policy, practice and research.

• Geography and area accessibility are critical factors in poverty resilience, with analysis revealing different poverty trends and experiences across area types that require tailored policy responses. Without focused, place-based action that recognises these geographical and accessibility disparities, poverty in all its forms across demographic groups and household types is unlikely to be effectively tackled, leaving these communities vulnerable to future fluctuations in poverty.
• Remote and island communities face distinctive employment challenges including low wage levels, job quality, job fragmentation and seasonal patterns that increase in-work poverty risks beyond simple job availability issues. These factors require careful consideration when developing targeted interventions for different geographical areas.
• The demographic profile of children in low income family households appears to be changing. Among relative low income households in rural and island communities, lone parent families now predominate. Lone parent families represent a priority family type at greater risk of poverty. As such, changes in the profile of household types in rural and island areas should be considered as part of the third Tackling Child Poverty Delivery Plan.
• Housing pressures in remote, rural and island areas compound poverty risks as a demographic shift toward smaller household compositions creates supply mismatches with existing, predominantly larger and older, housing stock. Short-term holiday lets further reduce housing availability in these areas. The vulnerability of all renters to increasing rents was also exposed during the increase in rural poverty between 2012 and 2017. Policy interventions should consider these specific supply and tenure vulnerabilities in geographically distinct communities.
• Remote rural areas require urgent fuel poverty interventions due to high rates of extreme fuel poverty levels and structural energy disadvantages. A comprehensive approach could include targeted, tenure-neutral housing energy efficiency programs for low income households, exploring options to enhance competition among alternative fuel providers and scoping out community energy solutions. However, such initiatives would be contingent on addressing critical skills shortages in remote rural areas and the Scottish islands.
• A review of free school meal eligibility criteria and registration processes could help determine whether they adequately support rural and island families, where registrations remain consistently lower despite higher rates of children in relative low income working families. This could examine whether eligibility thresholds reflect rural living costs, and address registration barriers through targeted awareness campaigns.

In summary, remote, rural and island households face concentrated challenges including increasing in-work poverty, fuel poverty and the emerging challenge of lone parent families becoming the dominant family type among relative low income households. Without targeted, cross-cutting interventions, these geographical inequalities will continue to undermine Scotland’s poverty reduction goals, including its ability to meet the 2030 Child Poverty Targets.

Strengthening the data infrastructure for rural and island poverty analysis

• Data limitations continue to hamper rural and island poverty evidence, with cross-sectional surveys producing volatile estimates due to small sample sizes and declining response rates. Addressing these gaps requires strategic use of administrative data to improve sample efficiency. In addition, continued investment in the Scottish Island Survey is essential and enhanced data collection mechanisms for remote areas should be developed to enable reliable analysis of compound poverty challenges across all geographical contexts.

• Comprehensive data linkage capabilities should be embedded within existinggovernment data strategies to enable longitudinal, multi-dimensional poverty analysis across Scotland, particularly within and between mainland rural, remote and island communities. This requires connecting administrative datasets, surveys, and healthcare, employment, earnings, education, housing and transport data to understand compounding disadvantages, with continued investment in both administrative and survey data to capture contextual information. Implementation should combine immediate data improvements with long-term infrastructure development. This includes better use of existing datasets, unlocking underutilised local authority and commercial services data potential, and building internal Scottish Government analytical capacity.