How can the
government meet the Child Poverty (Scotland) Act's statutory interim targets for child poverty?
Given the levers available to the Scottish Government, additional social security interventions will likely be required to close the remaining gap of 7.2 percentage points.
These social security interventions could be a combination of changes to better cover housing costs through existing benefits, premia applied to other means tested benefits for certain groups, or an increase in an existing payment such as the Scottish Child Payment (SCP). Other potential levers, like rent controls or an increase in the stock of social housing, are left for further research.
We explore options and conclude that increases to SCP are the most effective tool available to the Scottish Government. We find that, in addition to the other policies modelled, increasing SCP to £150 for everyone, or to £115 for all children plus a per-household premium of £50 for some priority households, would be the size of investment needed to meet the 2030/31 targets. We also model an intermediate amount of £40 per week, per child for SCP, as well as the £50 premium on its own. Our analysis highlights that a more targeted approach to SCP where some priority households receive premia may make progress towards the child poverty targets at a lower cost.
The cumulative cost of the policies we have modelled is between £4.6 and 4.9 billion in current prices. This is a substantial investment, equivalent to about 75-80% of the budget for devolved benefits in Scotland in 2024/25. About 60% of the cost comes from the childcare and afterschool care expansions that would be required to support greater parental employment. We highlight that increasing spending on the Scottish Child Payment is more cost-effective, achieving a greater impact on child poverty at a lower cost.