An independent assessment of progress in eliminating poverty and reducing social exclusion in Scotland.
As well as low income, the report covers issues from work and education to health and housing. As such, it covers both devolved and non-devolved responsibilities. The analysis is built around a set of 46 indicators organised into four chapters.
The report provides an overall picture of what has happen to poverty and social exclusion in Scotland over the last decade. Its findings include:
This report provides an essential resource and guide for policymakers and others wanting to take stock of what is happening and seeking to understand the challenges that lie ahead.
It is complemented by a website (www.poverty.org.uk) which provides updates to the graphs and further analyses. There are also separate reports available on Wales and Northern Ireland, and on the United Kingdom as a whole.
The current measurement of income poverty
A household is defined as being in income poverty ('poverty' for short) if its income is less than 60% of the contemporary Great Britain median household income. In 2004/05, the latest year for which data is available, this was worth £100 per week for a single adult with no dependent children, £183 per week for a couple with no dependent children, £186 for lone parent with two dependent children and £268 per week for a couple with two dependent children. These sums are measured after deducting income tax, council tax and housing costs (including rents, mortgage interest, buildings insurance and water charges). The money left over is therefore what the household has available to spend on everything else it needs, from food and heating to travel and entertainment.
The UK Government's first target was to reduce child poverty by a quarter by 2005 compared with 1998/99. In Scotland, this target was achieved.
This situation in Scotland contrasts with that for Great Britain as a whole, where the target was missed. However, this was because there were only small falls in child poverty in two particular regions, London and the West Midlands: if these two regions are excluded, then the Great Britain target would have been achieved. So, the rate of reduction in child poverty in Scotland since 1998/99 has been similar to that in Wales and most of the English regions.
|1997/98 to 1999/00||2002/03 to 2004/05|
|Children in working families||Total number||830,000||820,000|
|Number in poverty||130,000||100,000|
|Children in workless families||Total number||250,000||210,000|
|Number in poverty||190,000||150,000|
|All children||Total number||1,080,000||1,030,000|
|Number in poverty||330,000||250,000|
Table 1 summarises the poverty status of children in 2002/03 to 2004/05 compared with 1997/98 to 1999/00. (1997/98 to 1999/00 is the baseline period for the UK Government’s child poverty target.) It shows that the reduction in child poverty is due to a combination of three factors:
Quantitatively, the first two factors have been more important than the third: most of the fall in child poverty has been due to the reduced poverty risks for both working and workless families rather than from the shift into work. These risks have reduced for each work status with tax credits and increases in out-of-work benefits for families with children the driving forces behind these changes.
Two-fifths of all children in poverty live in households where someone is in paid work. Most of these are in two-parent families. Clearly, work has not been the route for these families to escape poverty.
For pensioners in Scotland, like elsewhere in Great Britain, the poverty rate has fallen rapidly from around 28% in the mid-1990s to around 18% in recent years, with the introduction of the Pension Credit the driving force behind this. Just one in six of all people in income poverty are now pensioners. The pensioner poverty rate, which used to be almost as high as that for children, is now similar to that for working-age adults.
In contrast, the poverty rate among working-age adults without dependent children has risen from around 15% in the mid-1990s to 18% in recent years. The 360,000 working-age adults without dependent children are now the biggest single group in poverty, at more than a third of the total.
For all working-age adults, with and without children, the poverty rate is unchanged at 18%. Given that the proportion of working-age adults in workless households has reduced from around 23% in the mid-1990s to 19% in recent years, one would have expected the poverty rate also to have gone down. But the risk of poverty for working-age adults in every work status is now higher than a decade ago, offsetting reductions in poverty from the shift into work. This is a very different picture from that for children where decreased risks by work status have added to the reductions in poverty from the shift into work.
What lies behind these increased risks? Issues arise with both the two main premises of the UK Government's anti-poverty strategy, namely 'work as the route out of poverty' and 'security for those who cannot work'.
Regarding 'work as the route out of poverty', two-fifths of working-age adults in poverty already have someone in their household in paid work, noticeably higher than a decade ago.
The link between in-work poverty and low pay is complex, as it is individuals who are paid but households whose incomes are counted in measuring poverty. For a variety of reasons – including working long hours, living with others who also work and additional money now available via tax credits – the great majority of low-paid workers do not live in households deemed to be in poverty. But most workers whose households are in poverty are themselves low paid: low pay is therefore a major cause of in-work poverty.
Two-thirds of low-paid employees in Scotland are women. This is largely because many more women than men work part-time, and part-time work (for both men and women) carries a high risk of low pay. So, for example, 43% of all part-time workers were paid less than £6.50 per hour in 2006 compared with 17% of female full-time workers and 12% of male full-time workers. The low pay of part-timers, rather than the low pay of women, would seem to be the immediate problem.
Regarding 'security for those who cannot work', who counts as 'unable' to work or what would constitute 'security' for them have never been clear. In this context, it is noticeable that, whereas Income Support levels for households with children and for pensioner households have risen relative to earnings, those for working-age adults are now worth 20% less relative to earnings than in 1997.
Disabled people are of particular concern regarding out-of-work poverty. Whilst the proportion who are working has increased, from 30% in 1998 to 35% in 2005, it remains well below that for lone parents (55%) and for those neither disabled nor lone parents (85%). Half of those aged 25 to retirement who are not working are disabled; three-quarters of working-age people reliant on out-of-work benefits on a long-term basis are sick or disabled.
The overall picture is one of steady improvement. For example, compared with a decade ago, the average tariff score in S4 Standard Grades is up from 150 to 170 and the percentage of school leavers going on to full-time higher or further education is up from 45% to 52%.
However, these headline indicators risk masking a picture of apparent stagnation in the proportions failing to achieve minimum qualifications at 16 and beyond. So, for example, the average tariff score for the bottom fifth in S4 Standard Grades was, at 50, no better in 2005 than in 1999 and the 25% of 19-year-olds who lack SVQ2 or equivalent is the same as a decade ago.
The concern here is that the lower a person's level of qualifications, the higher their risks of being out of, but wanting, work and of being low paid if in work. For example, those with no qualifications are twice as likely to be lacking but wanting paid work as people on average; if working, they are two-and-a-half times as likely to be low paid.
The vast majority of those achieving SVQ2 or equivalent at age 16 gain further academic or vocational qualifications. But half of those who fail to achieve this standard at age 16 do not achieve it by age 24. Furthermore, the half who do make further progress appear to achieve it by age 18. In other words, failure to reach that level by 16, whilst important, is not decisive but becomes so if not rectified by age 18.
The issues analysed include housing, quality of services and neighbourhoods. In most cases, data is only available since 1999 and so the scope for analysing trends is limited, but suggests:
All the indicators and graphs can also be viewed at Poverty.org.uk where the graphs are updated as new data becomes available.