‘People can't wait’ - when could Scotland’s new Income Supplement be introduced?

24th June 2019

A new report out today 24 June 2019 from the Institute for Public Policy Research.

As part of IPPR Scotland's work in partnership with the Joseph Rowntree Foundation on poverty in Scotland, we have been travelling across the country to hear from people living at the sharp end of poverty. One of the most consistent things we've heard is that families in poverty need help now - ‘people can't wait'. The message is clear: for families in poverty in Scotland, things are hard and they’re getting even harder.

Last year, the Scottish Government announced its plans to introduce an Income Supplement to help to reduce child poverty in Scotland. Though details are not yet clear, its aim is to make progress on delivering this by 2022, as part of its plans to meet the new legally binding targets to reduce relative child poverty in Scotland to 18% by 2023/24 and 10% by 2030/31. But we wanted to consider whether, and how, an Income Supplement could be introduced sooner, because every week and every month of delay is likely to count.

We know from the numbers that child poverty has been getting worse in Scotland, and we know that it’s projected to get far worse over the coming years. The Scottish Government’s own projections see child poverty projected to reach unprecedented levels by 2030/31 - even higher than the last peak in the early 1990s. More recent projections from the Resolution Foundation confirm a similar trend, poverty is due to increase significantly over the next few years in Scotland - and it’s likely it has already begun to happen.

We’ve looked at both Scottish Government and Resolution Foundation projections. What we’ve found is that between the year the Scottish Government set its new targets (in 2017/18) and the year of Scotland’s interim targets on reducing child poverty (2023/24), child poverty is projected to increase dramatically. Without action, child poverty could increase by over 50,000 children over this time. That’s around 25 more children each day, 170 more children each week and over 750 more children each month entering poverty than leaving poverty in Scotland. Without question, much of this increase has stemmed from UK government decisions to cut benefits, and from a UK economy that’s struggling to maintain, never mind improve, living standards. But there is a lot that Scotland can do.

Sometimes the scale of the numbers can seem overwhelming but turning the tide of poverty in Scotland is possible and we know what we need to do to make it happen. Housing and pay are incredibly important factors driving poverty today. The Scottish Government deserves credit for investing significantly in affordable housing over the next few years and for its aim of delivering fairer more inclusive growth. But even with the right level of ambition, both of these agendas, and the Government’s wider plans, would take some time to deliver the impacts on poverty and inequality we need to see. In the meantime, to begin to bring poverty rates down we need to see investment in social security.

This makes the Scottish Government’s promise to introduce an Income Supplement so important. The scale of ambition, both in terms of the money invested, and in terms of how quickly it is introduced, will be significant tests of whether Scotland is going to match UK-leading child poverty targets with action to deliver them.

Past experience shows that the legislation required to introduce a full Income Supplement could be considered and passed by MSPs in around 12 months (see note 1). Allowing time for consultation to make sure we get the laws right, the earliest we could see legislation introduced would be later this year or early next. That could mean we could see a new low income supplement in place by April 2021, before the next Scottish Parliament elections. And we could see something in place sooner through an interim scheme once the shape and budget for any new Income Supplement is clear.

However, to see an Income Supplement in this parliament we would need to see a clear statement of intent from government in the near future. There are key opportunities coming up for the Scottish Government to set out when legislation will be introduced and when a budget will be set, including the Scottish Government’s June update on its Tackling Child Poverty Delivery Plan, the Government’s Programme for Government following the summer break, and the 2020-21 budget process, which starts in December this year (it remains to be seen if this will be only a one-year budget). The next six months could therefore be incredibly important to making progress towards reducing child poverty.

It’s important we hear soon the Government’s plans for when an Income Supplement will be in place and when a budget will be set. Every week or month of delay to the new Income Supplement matters hugely. ‘People can’t wait’. And so we shouldn’t.

Russell Gunson is Director of IPPR Scotland. He tweets at @russellgunson.

Notes:

The Social Security (Scotland) Act 2018 was introduced into the Scottish Parliament on 20th June 2017, was passed by parliament 10 months later, and received royal assent on 1st June 2018, just under 12 months following introduction. The Child Poverty (Scotland) Act 2017 was introduced on the 9th February 2017, was passed by parliament in November 2017, and received royal assent on the 18th December 2017, just over 10 months after introduction.

To read more on this and related topics go to - https://www.ippr.org/blog/people-can-t-wait-when-could-scotland-s-new-income-supplement-be-introduced