Scotland must take steps to prevent country’s record on poverty unravelling

Scotland’s progress in tackling poverty is at a turning point and risks unravelling because of soaring housing costs for low income households, in-work poverty and the UK social security freeze.

In its latest state of the nation report, Poverty in Scotland 2017, JRF finds the country has made significant headway on reducing poverty over the last 20 years. Poverty is lower in Scotland than in the rest of the UK and falls in poverty among pensioners and families with children have been greater and more sustained.

However, the latest single year figures show an increase in child poverty in Scotland. This could be a very worrying trend if it continues and also emerges in next set of figures, which look at three-year averages.

Recent IFS projections show that child poverty in Scotland is expected to rise from 23% to 29% by 2021, due to UK social security decisions as well as long-term changes in the economy.

JRF says threats to Scotland’s progress in reducing poverty are emerging. It is urging the Government to use its draft Budget next month to ensure its record continues.

JRF’s report found:

  • Higher housing costs are hitting low income households. 37% of the lowest-income households now spend more than a third of their income on housing – a commonly used indicator of high housing costs – rising over the last 20 years (from 24% in 1994/97) years and particularly in the last decade
  • People on low incomes are more likely to be living in sub-standard housing. More than 4 in 10 homes still do not meet the Scottish Housing Quality Standard. Despite sustained progress in the last decade, half of homes in the private rented sector do not meet this standard and the poorest fifth of households are more likely to be living in sub-standard housing than the richest fifth (51% compared with 32%). This gap has widened over time, from 8 percentage points in 2004/5 to 19 points in 2015
  • More working families are facing poverty. Overall, 43% of working age adults in poverty live in workless families, while 57% live in families where at least one adult is in work. This contrasts with the situation two decades ago, when 52% of those in (working age) poverty lived in workless families, and 48% in those with at least one person in work. One in four part-working families is in poverty – where at least one adult is working and one is not. This has stabilised over the last decade, while the rate has carried on rising in the rest of the UK. This is a key area for Scotland to protect and improve on.

JRF recommends the Scottish Government:

  • Use City-Region and Growth Deals to help low-paid workers progress into better-paid jobs through an Advancement Service. Over a decade, about one in five low-paid Scots fully escape low pay. The Scottish Government and local leaders could work with employers in sectors such as hospitality - which has the highest proportion of staff paid below the Living Wage, part-time workers and women and BME workers - to improve skills, training and progression. Ear-marking 10% revenue from the Apprenticeship Levy could support 5,000 workers directly to make progress through careers advice, coaching, training and digital skills
  • Driving up housing standards and reduce costs for tenants. An estimated 180,000 private-rented homes are sub-standard. If the Scottish Government boosted its rolling loans fund for improvements, private landlords could make improvements to improve energy efficiency and reduce heating bills. If one in five of these homes took a loan over the next three years, 37,000 tenants could see faster improvements to their housing
  • Ease the financial pressure on families with children. The Scottish Government should top up UK payments such as child tax credit or the child element of Universal Credit, or route extra support through existing local government schemes, such as more generous school clothing allowances or council tax rebates.

Campbell Robb, chief executive of the Joseph Rowntree Foundation, said:

“Scotland has a proud record in reducing poverty over the last 20 years, with significant falls in pensioner and child poverty. It has meant thousands of families across the country have enjoyed better living standards, financial security and better prospects.

“But Scotland stands at a turning point as the challenge facing families on low incomes changes. The rising cost of housing and the challenge of low-pay and in-work poverty – as well as the impact of UK social security decisions - mean the country’s progress is in peril.

“Scotland’s record shows progress can be made with sustained effort, but these findings highlight that these gains are fragile and need to be protected. The upcoming Budget provides a chance to tackle the long-term drivers of poverty and fix the foundations for the next generation of families.”