Scotland risks seeing a rising tide of poverty due to the economic impact of Coronavirus unless political parties commit to bold action on job training, affordable housing and an income lifeline for families at next year’s Holyrood election.
In its annual state of the nation report, Poverty in Scotland 2020, the Joseph Rowntree Foundation (JRF) shows that the country went into the pandemic with unacceptably high levels of poverty. It also reveals that people and places already at greatest risk of poverty are facing mounting challenges.
The analysis sounds a warning bell: Scotland is not on course to meet its interim child poverty targets within three years. Currently, 230,000 children are growing up in poverty (24%) – an increase on 5 years earlier – while the target is to reduce this number by a quarter to 18% by March 2024.
The pandemic has had a serious impact on jobs and financial security, with workers already in poverty hit hardest. Areas with a high number of lower-paid at-risk jobs - in accommodation and food, retail and wholesale, manufacturing and entertainment sectors - face the threat of increased poverty.
The pandemic has also resulted in a drop in hours worked. Mean working hours in Scotland dropped from 32 per week at the start of 2019 to 25 in the period up to June 2020. This is a deeply concerning indicator since escaping in-work poverty relies on the ability to work enough hours at the Real Living Wage.
Jim McCormick, Associate Director Scotland of the Joseph Rowntree Foundation, said:
“We went into the pandemic with unacceptable levels of poverty. The resulting economic storm risks blowing us even further off course. People and places already at greatest risk of poverty face tougher times ahead unless we are bolder in our approach to recovery.
“Now is a crucial moment for Scotland. The decisions we make will determine whether we reach our ambitious child poverty targets by the middle of the next parliament. As the shape of our economy changes, it is vital to do all we can to protect people’s jobs, homes and living standards, so more families are not pulled into poverty.”
By August 2020, the number of individuals in receipt of Universal Credit in Scotland – both in and out of work - had nearly doubled compared to January, to over 470,000 claimants. By May, claims by single adults with no children had increased three-fold while the number of couples with children claiming had doubled compared with the start of the year. The biggest increases in Universal Credit claims have occurred in Glasgow, West Dunbartonshire, North Lanarkshire, East Ayrshire and North Ayrshire.
Temporary increases by the UK Government to the standard allowances of Universal Credit and Working Tax Credit have stopped family income falling even further. Yet, this vital lifeline is planned to end in April. JRF warns that withdrawing this support would lead to a significant rise in poverty.
Our latest modelling reveals that, by keeping this lifeline, 1.2 million people in Scotland would benefit and a further 100,000 would gain if this increase was extended to key legacy benefits. In combination with the first phase of the Scottish Child Payment next year for children aged under six, we estimate that 25,000 fewer children would then be trapped in poverty.
Clear signs of financial strain are also bearing down on tenants. The Scottish Government has boosted the Scottish Welfare Fund to cover periods of crisis and Discretionary Housing Payments to help cover housing costs, as well as announcing a new Tenant Hardship Loan Fund. But even before the pandemic, 30,000 children were living in poverty only due to family housing costs. A major new programme of building affordable social homes in the next five years is needed as an economic stimulus and to drive down housing-related poverty.
This year’s report has been produced alongside an advisory group of people from across Scotland with first-hand experience of living on a low income.
“We need to put housing and humanity together – bringing kindness where it is lacking in the housing sector.”
Taylor (pseudonym), Glasgow, member of the lived experience advisory group
The report coincides with the start of Challenge Poverty Week in Scotland. It will be launched at an online event featuring a keynote speech by the Cabinet Secretary for Finance Kate Forbes MSP.
To get us back on course to reducing poverty in Scotland, we need to see:
- The Scottish Government strengthen employment measures quickly: working with employers, the National Training Transition Fund for people made redundant or at risk of losing their job needs to expand to meet the likely winter surge in unemployment while the Parental Employment Support Fund should be increased and extended across the lifetime of the next parliament.
- A stronger income lifeline for school-age children before 2022: while it may not be possible to extend the Scottish Child Payment faster, we call on the Scottish Government and COSLA to use local government payment channels (e.g. for Free School Meals) as an alternative in next year’s budget. This partial solution would be better than all eligible families having to wait longer for vital support.
- The Scottish Government committing to build 53,000 new affordable homes by 2026, 70% of which should be for social rent: they should prepare to step in with additional legislative protection and help with housing costs if existing support for renters proves insufficient to keep people in their homes.