Public Audit Committee

Meeting date: Thursday, October 6, 2022

Official Report 648KB pdf

---

“Tackling child poverty”

Welcome back. In this session, we will take evidence on the Auditor General’s briefing paper on tackling child poverty in Scotland, which came out on 22 September—so, by our standards, it is relatively hot off the press.

I am pleased that the Auditor General is joined by, from Audit Scotland, Tricia Meldrum, senior manager, and Corrinne Forsyth, senior auditor, performance audit and best value; and I am particularly pleased to welcome Andrew Burns, who is here as a member of the Accounts Commission, because the report was jointly produced by Audit Scotland and the Accounts Commission. Andrew, we are delighted that you are able to join us.

I turn first to the Auditor General for an introductory statement, after which we will ask a number of questions.

Good morning. As you know, convener, the paper on tackling child poverty in Scotland has been prepared jointly by Audit Scotland, on behalf of me, and the Accounts Commission.

Poverty affects every aspect of a child’s wellbeing and life chances and has wider implications for society. Children who live in poverty are more likely to have mental health challenges, to gain fewer qualifications at school and to experience stigma, and they are at a higher risk of being care experienced. Ideally, as a society, we want to prevent children from experiencing poverty in the first place.

The latest data from 2019-20 reports that 26 per cent of children in Scotland—260,000 children—were living in relative poverty. That is higher than when, through the Child Poverty (Scotland) Act 2017, the Scottish Parliament set ambitious targets to reduce child poverty to 18 per cent by 2023-24, and to 10 per cent by 2030-31.

We do not know whether levels of child poverty increased or decreased in 2020-21, because of issues with data collection during the pandemic. The on-going cost of living challenges are likely to push more children and their families into poverty.

As well as looking at the impact of poverty on children’s lives, the briefing paper focuses on what the Scottish Government, local government and others are doing to reduce and prevent child poverty.

To reach the targets to reduce child poverty, the Scottish Government set out actions in two four-year delivery plans. The first delivery plan ran from 2018 to 2022; the second runs from 2022 to 2026. It is not possible to assess the success of the Scottish Government’s first four-year plan, because it did not set out what impact the plan was expected to have on levels of child poverty. The Scottish Government’s second child poverty delivery plan, which was published in March this year, sets out a more joined-up approach with local government and other public bodies, the third sector and the private sector. It includes more information on what impacts the Scottish Government expects policies such as the Scottish child payment to have on the targets to reduce child poverty, but it lacks detail on how and when some of the actions will be delivered.

The Scottish Government has not yet shown a clear shift to preventing child poverty. Actions are more focused on helping children out of poverty and reducing its impact than on long-term measures to prevent it. However, the second delivery plan and some of the Scottish Government’s broader actions include some steps towards a more preventative approach.

We have recommended that the Scottish Government, councils and their partners urgently develop the detail of how they will implement the actions in the new delivery plan and monitor its impact. We have also recommended that they work meaningfully with children and families with lived experience of poverty as they do that.

Finally, our paper highlights the need to quickly progress planning to meet the third set of child poverty targets by 2030-31, given the length of time that it can take for some of the measures to take effect.

Audit Scotland plans to carry out more work in the future to look at the progress and impact of the plans to reduce child poverty.

As always, my colleagues and I look forward to answering the committee’s questions.?Like the convener, I am delighted that we are joined by Andrew Burns from the Accounts Commission to help us to do that.

Thank you very much.

I remind people that Colin Beattie is with us, but is joining us remotely.

You have outlined some of the key messages in the report, some of which are quite startling—from gaps in data to your assessment that

“It is not possible to assess the success of the ... first four-year plan”

and that there has not been a demonstrable

“clear shift to preventing child poverty.”

Those are quite important messages and, as you have set out, there are areas in which you are keen that improvements be made.

You finished by explaining that you plan to carry out more work. Will you elaborate on that a little? What further work is already in train or is likely? Will you tell us a little about the timetable that you have set yourself for that?

Yes, I am happy to do so.

As you have said, there are a number of themes that the committee is interested in, which I am delighted to elaborate on.

We intend to carry out more work on child poverty. The paper is a briefing paper. We use a range of audit outputs including online publications, briefing papers and full performance audits. The briefing paper is distinct from a performance audit report, in that we did not make judgments in it, which we do in a performance audit report.

That is where we intend to go next: to make a more formal assessment of progress against the respective delivery plans. We have not yet set a definitive timescale for that. Given the progress and where the Government and its partners are with the second delivery plan, the availability of data will be key to making an assessment.

Broadly speaking—colleagues can keep me right on this—there is about a one-year time lag on data availability from the end of each year. We will take a view on the quality of the data and the timescales before we define when we will next prepare a report.

A couple of other reports are already in train on behalf of the Accounts Commission and me that will inform progress against some of the wider measures. Next year, we will produce performance audit reports on the Government’s progress on early learning and childcare expansion, and on adult mental health arrangements. Both reports will inform our future work on child poverty arrangements. We anticipate that that will be within the next couple of years. Data and its quality will shape the specifics.

Thanks. You mentioned at one point that Covid has had an effect, which we fully appreciate. However, the committee also wants to understand whether the foundations are in place to deliver the data, notwithstanding external factors.

10:30  

We are interested to hear your views on the robustness of the data and on the time lag, because—I presume—that makes it exceptionally difficult for policy makers to base their decisions on current evidence. Parliament has legislated for statutory targets to be met, but if there is no data to understand what progress is being made or what regress is taking place, that makes it pretty hard to give any meaning to the targets that have been set.

Your briefing mentions that new data on levels of child poverty in 2020-21 are expected in 2023. Have you any expectation that that data will be more robust? Will it be better? Will it address the deficiencies that you outlined in the briefing? I am happy for you to bring in the other members of your team, as needed.

Thanks, convener. I will bring in Corrinne Forsyth first on data quality. I am sure that Andrew Burns and Tricia Meldrum will also want to comment on some points.

I recognise the point that you make. As the committee knows from the discussion that you have just had and from many of the audit reports that we produce, that the theme of high-quality data is built into policy development implementation right from the start. Regrettably, we did not see that for the first delivery plan on child poverty. We might well expect that many of the actions that were taken would have a positive bearing on reducing child poverty, but it is not possible to track that with adequate evidence.

That leads us to one of the key planks of today’s report about the third child poverty reduction plan, which is that such data is a key component of the plan. The Government and its partners set out very clearly what individual components would reduce child poverty and by how much. That supports policy makers and, as you said, it supports scrutiny of progress. From looking at the scale of ambition that is set out in the plan, I think that there is a long way to go.

You are right that there is a time lag in the data. The Government’s assessment of the data’s quality is that, as a result of the pandemic, it was not robust enough to publish and rely on. Corrinne Forsyth can share a bit more about the data and how it is prepared.

As Stephen Boyle has said, the data on the interim targets for child poverty in 2023-24 will not be published until March 2025. In its second delivery plan, the Scottish Government sets out in an annex that it is frustrated by the time lag that you mentioned, convener. As you said, that time lag impacts on policy makers in terms of how they can respond.

For 2020-21, the data for the main child poverty targets comes from the family resources survey, which is a United Kingdom-wide survey. Data was published at UK level. However, because of sample sizes it was decided that, at Scotland level, the sample—particularly in relation to families—was too small to make it particularly reliable.

It is interesting that at UK level—this is reflected in the Scotland figures, even though there were warnings about using them—the data shows that levels of child poverty fell during 2020-21. However, that was seen by commentators as an artificial fall that was a result of the universal credit uplift that was later reversed. There was a fall in median incomes too, which had an impact on reducing the level. Therefore, it is seen as an artificial fall.

The 2023-24 data will not be published until 2025. In terms of robustness, it is a very big UK survey and there is lots of data validation. At that national level, there is a lot of confidence that the information that will come out will be robust in 2025. However, there is the issue of the time lag.

There are other issues with data that sit behind that, but we are confident that the data relating to the four targets for child poverty are robust, if not overly timely.

Okay. Thanks.

I want to pick up on the last point and will bring in Andrew Burns to answer. There are four indicators, and the report calls for consistency in their application and use. Perhaps that suggests that, currently, they are not used consistently. For example, I do not know whether some local authorities, with health boards, rely on only one or two of the indicators and not on all four. There might be reasons for that. The committee is interested to understand whether your calling for consistency of application of the suite of indicators at Scottish Government and local government levels implies that that is not happening at the moment.

The Auditor General can start; maybe Andrew Burns can then come in.

Yes, that is essentially the judgment that we made in the report. Given the environment that we are currently in, there is some contextual information to give. Not all the indicators reflect the cost of living challenges. In particular, the most commonly used indicator of relative child poverty is based on household income. It refers to 60 per cent of average, or median, income. That does not take account of individual households’ costs. Inflation rates apply differently in their effect on different people in society, so an overriding measure of relative child poverty might not be all that helpful in the current circumstances.

I suppose that it is about consistency of application and picking the right indicator to best describe the circumstances that children and young people face on a day-to-day basis. We have recommended to the Scottish Government and to public bodies across the piece that they do that consistently and pick the indicator that matters most in the circumstances that we are in. I am keen to see that happen, as a follow-through from the paper.

We are living in times that are quite different even from those in 2017, when the legislation was drafted.

I welcome the committee’s willingness to see both the Auditor General and the Accounts Commission as part of its work on looking at the joint report on child poverty. I am pleased to be here representing the Accounts Commission and hope that I can help to amplify some of the key messages, as they relate to local government.

I will come directly to your point. You have been pressing us on data, and you have touched on something that is crucial. In the evidence in the briefing paper, two of the three key barriers that currently affect local government in addressing child poverty relate to data. The Auditor General has touched on gaps in data; the other issue is data sharing—or, in many cases, the lack of effective data sharing. I will give one example to illustrate that, which might help to further the discussion.

Members are probably aware that all councils and health boards must produce an annual joint local child poverty action report. All 32 local authorities produce one, but there is no national collation or systematic overview of the 32 local government reports, in one place. That came out in the evidence that we gathered for the briefing. There is quite a significant lack of data sharing among local authorities. As the Auditor General and others have hinted, the evidence clearly indicates that attempts to reduce child poverty could be improved by things such as improved data sharing at that level across all 32 local authorities.

Some of the child poverty action reports are signed off by chief executives at local authority level. Obviously, that is to be welcomed, but some of the reports are not signed off by very senior officers. I do not mean that in a demeaning way. There is a lack of consistency as well as a lack of sharing across local government and, therefore, across the whole nation.

That is helpful. We will come to questions on the local government and health board data collection and reporting mechanism. At this point, Sharon Dowey has a few questions to put to you.

Section 2 of the briefing paper says:

“There has not been a sufficient shift to prevention to reduce the disadvantage caused by child poverty”.

You mentioned that in your opening statement, too. Do you have a view on what types of preventative action would be helpful to improve outcomes in the longer term?

We make a broad statement in the report that most of the actions are designed to lift children and young people out of poverty. Clearly, we are not questioning the appropriateness of that—if interventions are required, we expect public bodies to implement them. There is also something about the preventative approach, which ensures that children and young people do not experience the scarring nature of poverty in the first place. I spoke in my introductory remarks about the impact that that has on their life chances, and the generational impact of poverty. Because of that, we are looking to public bodies and policy makers to place additional emphasis on the preventative measures and investment that can reduce the number of children and young people who experience poverty.

Tricia Meldrum might want to say a bit more about the example that we touch on in the report, which concerns the Government’s early learning and childcare intervention. That has a bearing on the experience that children and young people have in their early years, but it also has a bearing on the ability of their parents to access work. The policy has a long-term preventative nature, because it results in children and young people having better experiences in school and nursery, which means they are better able to obtain qualifications and, ultimately, better-paid employment.

We have to look a bit deeper for other long-term examples—affordable housing would be one of those. The balance is what is important. In order to stop child poverty, we are looking for greater emphasis, on the part of public bodies and policy makers, on investment in preventative measures rather than on interventionist measures.

I will let Tricia Meldrum and Andrew Burns say a bit more on the subject.

We have highlighted early learning and childcare as an example of a policy that has worked on multiple levels, when it does what it is intended to do. First, it supports children through their early years, as they start school. There is a lot of evidence about the difference that can be made if we level the field when children enter primary school. That approach is designed to have results in the longer term, with regard to improving the outcomes for those children and, when they become parents, their children. The policy also has shorter-term aims around supporting families and parents into employment or training.

As the Auditor General mentioned, we are doing audit work on early learning and childcare, which we will publish next year. That will not look at the impact of the expansion to 1,140 hours on those outcomes, because it is too early to say what that is. We plan to do further audit work down the line, when there is better information that will enable us to see whether the policy has achieved its ambitions in terms of the longer-term preventative approach.

We have also referred to things such as the Scottish attainment challenge, in respect of school education. It, too, is supposed to level the playing field and close the attainment gap, which is intended to improve longer-term outcomes for children and young people as they move into employment and become parents.

A number of policies are intended to make a difference in the longer term but, at the moment, the focus is very much on mitigating and supporting and not so much on ensuring that children never experience poverty and the damaging effect that it will have on their life chances.

10:45  

I will amplify how some of those points relate specifically to local government. The Auditor General and Tricia Meldrum referred to the admirable effort across local government and national Government to help people out of poverty, but said that there is less focus on preventing people from getting into poverty. That is an easy thing to suggest, but it is a difficult thing to tackle.

I will give a few local examples. Local authorities have five or six key areas in which they can assist with prevention quite significantly. I will go through them in no particular order. The first is support for parents into employment and work. Councils can have a significant role in that arena. All the evidence that we have gathered indicates that ensuring that parents or carers have consistent paid employment is the most significant way of preventing poverty, and not just of helping people out of poverty.

The second thing that I will highlight is housing. Everybody on the committee will be aware that local authorities have a key role to play in providing affordable housing.

On education, local authorities have a key role in minimising the cost of the school day through, for example, administering the school clothing grant and the free school meals scheme.

Childcare is another area. Policy is set at the national level, but is delivered at the local level, and local authorities provide funding for early learning and childcare places at the local level. That can greatly assist with prevention, as well as help to lift people out of poverty.

Transport is often the Cinderella of this clutch of areas. Implementation of free bus travel and ensuring that there is transport so that people can get to well-paid employment is significant and is a responsibility of local authorities.

The final area is welfare support. Increasingly, local authorities have a key role in administering financial insecurity and hardship funding.

All those areas can be crucial in assisting prevention, as opposed to lifting people out of poverty—although their role in that is to be welcomed. As the Auditor General and Tricia Meldrum said, it would be preferable by far if prevention could be baked into policy making right from the get-go.

You pre-empted my next question, which was going to be on publishing further work on the impact of the expansion of funded early learning and childcare and the timetable for that. Are you expecting to publish that next year?

Yes, that is correct. We are finalising the timetable, but we are anticipating publishing that at the end of May or beginning of June 2023.

The briefing paper suggests that the Scottish Government did not follow advice from the Poverty and Inequality Commission to ensure that its actions were more clearly linked to targets for reducing child poverty and to be clear about what the impact of each action was expected to be. The paper goes on to state that, because the Scottish Government did not set out what impact the child poverty delivery plan was expected to have, it was not possible to make a proper evaluation of whether the plan delivered its aims. Why did the Scottish Government not act on the commission’s advice and why did it not take steps to ensure that the impact of the plan on child poverty could be properly assessed?

You are right in your description that the Government’s advisers—the Poverty and Inequality Commission—raised concerns about the read-across from the various steps to the impact that they would have. I will invite colleagues to say whether they have any additional insight as to why the Government chose not to act on that.

Before doing so, I would say that there has been a recognition of progress since the first delivery plan and the second one. The clear recommendation is that the intended outcomes of individual steps should absolutely be part of the third delivery plan, so that policy makers and those scrutinising the plan’s success have access to them. The main thrust of the briefing paper is that it should be absolutely clear what is intended from individual steps.

If colleagues have any further insight, they can help me out.

I will not say anything in relation to why the Scottish Government did not do that—that would be more of a question for the Scottish Government—but, as the Auditor General alluded to, we have certainly seen things move on quite a lot in relation to the second plan.

One of the key differences with that is the Scottish Government’s modelling to look at the cumulative impact of the different actions that it was proposing to take, particularly those in relation to the Scottish child payment, other social security payments and employability. Consequently, the Government has been much clearer about the anticipated impact on levels of relative and absolute child poverty of those actions. The modelling indicates that it anticipates achieving the target for relative child poverty but not for absolute child poverty, so there is still a gap. As we have said, the latter measure better picks up the impact of cost of living pressures that we are seeing more of now.

We have also said in the briefing paper that more work needs to be done around the second delivery plan. The impact that many of the actions are supposed to have is clearer, but there is still work to be done around some of the other actions, as it is not clear how they are intended to impact on child poverty levels. For example, it has not really been set out how some of the housing actions will be targeted or how they will impact on child poverty. We recommend that that further work be done quickly, because the Government needs to get moving to deliver those actions.

Thank you. I want to give Willie Coffey the opportunity to put his questions to the witnesses now. I will then bring in Colin Beattie.

Thank you very much, convener. I want to ask the Auditor General a question arising from page 3 of the briefing paper, which says:

“The key policy actions to reduce child poverty in Scotland rest with the UK Government, the Scottish Government”,

councils and partners and so on.

It is perhaps appropriate to be putting this question to you on the anniversary of the removal of universal credit uplift. Do you feel that you cannot scrutinise, assess or examine the impacts that some of the UK Government’s measures might be having on overall child poverty levels? I am sure that the committee is interested in gaining the widest picture possible as regards the key influencers on this topic. Will you say a bit about where you see your role being and whether you are able to look at and scrutinise that side of the process?

I am happy to do that. I suspect that Andrew Burns will want to say a bit more about the role of local authorities and their contribution.

It is the case that, as we set out in key message 3, the levers to reduce child poverty in Scotland rest with the UK Government, the Scottish Government and other public bodies, principally local authorities. We have not undertaken an assessment of the impact of changes to universal credit in Scotland. To an extent, we do not have the powers or authority to do that; our audit responsibilities, which I share with the Accounts Commission, cover public bodies in Scotland.

The data for making the assessment is not necessarily about one policy change at a point in time. As Corrinne Forsyth has mentioned, the survey material is the primary assessment methodology for forming a view about the number of children and young people who are experiencing poverty in Scotland. Therefore, there will be a flow-through of changes to one policy. There are time lags, which we have already discussed this morning. However, we have not undertaken an assessment on the changes of an individual policy on universal credit for those very reasons.

However, we have undertaken assessments of other components. This morning, you have already heard about Social Security Scotland. We make assessments of some of the changes to devolved benefits in Scotland. Before Parliament’s summer recess, we reported on the progress that Social Security Scotland is making on the roll-out of its benefits. Mr Coffey and other committee members will recall that one of the key findings from that report is the need for, as the programme of devolved benefits in Scotland rolls out, evaluation at the heart of the Government’s approach to assessing the success of that policy. It clearly matters that that is connected into the progress on child poverty reduction targets.

That was a fairly long answer, Mr Coffey. In short, there are, I suppose, boundaries to our responsibilities in this regard, but there will be data supporting the overall impact of all this, albeit with some time lag.

If you are content, I will pause there and let Andrew Burns come in.

I cannot speak any further to the issues that the Auditor General has addressed with regard to UK Government funding, but your question gives me a chance to focus on the third of the three key barriers that I mentioned in response to the convener. As I have said, two key barriers are lack of data sharing and data gaps, but the third, which I did not get a chance to reference at the time but which, prompted by your question, I can highlight now, is ring fencing. Ring fencing can be seen as a way of providing funding to multiple small pots, but, from the viewpoint of local government, it can also be seen as a barrier to reducing child poverty.

This is an issue that can be developed in the relationship between the Scottish Government and local government. Ring fencing funding clearly supports the delivery of Scottish Government policies such as early learning and childcare, but it can also remove local discretion as well as discretion over some aspects of how the total funding that is available to councils can be used. Moreover, having small pots of funding can make it much more challenging for families and those helping them to access funding and get all the help that is available. It might be worth the committee looking a bit more at that third key barrier of ring fencing, and we will certainly be looking at it in the additional work that the Auditor General referred to in his opening comments.

Thank you very much for those responses.

The briefing that Stephen Boyle has referred to talks about the Scottish Government increasing

“the focus on policies aimed at preventing children from experiencing poverty”

and mentions that increasing the Scottish child payment to £25 a week per child could—we hope—reduce poverty “by five percentage points”. However, there is commentary all through the briefing about our not meeting the child poverty target and being 1 per cent short or whatever. How do we know that the ability to reach these targets is not also being driven by the negative impact of, say, the withdrawal of universal credit in certain circumstances? Who is assessing the impact of that? As we know, it has directly affected 350,000 households. How do we get a balanced picture to ensure that we know that all these influences are having an impact?

You are right, Mr Coffey. As we have set out in the briefing—and in response to your first question—the actions of the UK Government, the Scottish Government and other public bodies as well as the wider economic circumstances that people are facing will all influence the progress towards meeting these ambitious child poverty reduction targets. As I think the convener has mentioned, some of the targets were set in 2017, when some of the factors that we as a society are currently facing could not have been envisaged. Whether it be the pandemic, the current cost of living or the war in Ukraine, such factors will have a bearing on household finances, inflation rates and so forth. The Scottish Government’s intervention in the form of the Scottish child payment would, had it not been for such factors, have been expected to reduce child poverty, but it is now being offset by the negative impact of some of these factors.

What we are trying not to do in this briefing paper is to say that all progress is attributable to the Scottish Government; the landscape is complex and multifaceted. As we move into the next delivery plan, we come back to our recommendation that the Government and its partners be clear about the intended impact of individual measures over the course of the next delivery plan period and, allowing for the complexity of other environmental factors, make as best it can a judgment about the impact of this or that measure on the child poverty reduction targets.

Thank you very much for that.

If it is okay, convener, I have two more questions that I will just roll into one. They are probably for Andrew Burns. First, what evidence base do councils actually need in their work with partners in the third sector to help them reach a conclusion as to whether any of this is having the positive impact that we hope it is having?

That leads me to my other question, which is about how we gather solid, quality data. What do we need to have that we perhaps do not have, which would enable us to answer those questions at future meetings of this committee?

11:00  

Regrettably, despite all the efforts of local and national Government, the figures are increasing, as has already been alluded to, and the current relative poverty rate is sitting at 26 per cent for 2019-20 compared with 24 per cent a few years ago. It is deeply regrettable that the level is higher, despite all the efforts that have been made. As the Auditor General said, it would be worse if it were not for the actions that local and national Government are taking.

The key data source that local government depends on at the moment, I understand, is the Improvement Service local government benchmarking framework. That suffers from exactly the point that the Auditor General made in his opening statement in that, as with many of the data sets, there is a time lag—I think that I am right in saying that it is a time lag of 12 to 24 months. Colleagues might want to amplify some of my response.

I am afraid that I do not have an easy answer to the point that you have raised, because it is a challenge to find timely data that does not have that lag, whether it is at a local or a national level.

I do not think that we will ever get rid of the time lag issue, but is there any missing qualitative or quantitative data that we should be gathering?

One of the specific points that we raise in the report is about the six priority groups that the Scottish Government has identified as being most at risk of children experiencing poverty. Some people fall into more than one of those groups, which multiplies both the risk and the potential negative impact of poverty. However, there is very little data to enable us to understand how many people fall into more than one of those groups and what the experience of those families and children is actually like. That data does not really exist. The Scottish Government is looking at extending the size of the sample, so that it can start to get into more and more sub-group analysis. We are still waiting to see whether that happens.

One way in which the Scottish Government can try to get a better handle on that particular gap is by talking to the children and families in a proper, meaningful way. There needs to be engagement, with meaningful input from the children and families who have had experience of poverty. What does it feel like? What works and what does not? They are best placed to understand what that experience is like, what would make a difference and what does not make a difference.

We have therefore recommended that, as the Scottish Government, councils and their partners work through the detail of delivering some of those actions, they should be doing that very much in partnership with the children and families and that the children and families are involved in the monitoring and the assessment of whether those actions are making a difference. I would highlight that as being one of the tangible gaps where something can be done to help to address it.

That is very helpful. Thank you very much to everybody.

We now go to questions from Colin Beattie, who joins us remotely.

Good morning, Auditor General. I will be looking at spending, but I have a couple of points to make before that.

Obviously, it is really important to know that the correct resources are being directed towards reducing—and, we hope, eventually eliminating—child poverty. However, as my colleague Willie Coffey said, there is no knowledge, really, about what the impact of UK Government decisions has been. I do not know how we can get hold of that information or how we ensure that the Scottish Government is working in tandem, so to speak, with the UK Government’s initiatives—they are very varied.

The Auditor General has made it very clear that the paper is a briefing and that some of the sources that were used are different from what his normal investigation and audit work would pick up. To what extent does that impact on the quality of the data that you received? Can we rely on that data?

Good morning, Mr Beattie. Thank you for your questions.

On the impact of UK Government decisions, as Mr Coffey mentioned, there are many variables that will influence progress towards the child poverty reduction targets. Our briefing seeks to emphasise that, regardless of what decisions or steps were taken previously, as we move into the third delivery plan, understanding those variables is integral to the intended measurement of and long-term planning for the outcomes that will come out of the plan.

The Scottish child payment will be one factor. As with the Scottish Government, there are other measures through which the UK Government will have an influence, whether positive or negative. It is a case of trying to enable a more segmental understanding of the different drivers behind the reduction targets.

On your second question, through a briefing paper as distinct from a performance audit report, we seek to signal in more general terms the issues that public bodies face. Does that influence the quality of the data that we receive? I do not think that it does. The evidence that we have drawn on for the briefing is publicly available through the survey. As we have mentioned, we intend to undertake further audit work at a point that is yet to be determined. We always make the point about the need for high-quality data. That shapes our ability to make audit judgments, and it shapes the ability of policy makers and scrutineers such as members of the committee to take a view on the quality of the steps that are being taken through the child poverty reduction policies.

We are keeping under review the issue of when it will be best to undertake that further audit work, but we think that the briefing is a complementary introductory piece of work, which will be supported by further performance audit evidence-based work in the years to come.

I hope that that is helpful, and that it answers your question.

It is helpful. Paragraphs 59 to 62 of the briefing paper outline that it is not always clear how the £3.3 billion was spent on tackling child poverty between 2018-19 and 2021-22. The briefing recommends that

“The Scottish Government should consider how to develop its understanding of the reach of universal spending and the extent to which low-income households are benefiting.”

To what extent is it a cause for concern that £3.3 billion has been spent on tackling child poverty, yet it is not entirely clear how that spending has impacted on child poverty outcomes? The Scottish Government has mentioned that it has mitigated a possible increase in child poverty, but we would like to see the trajectory on child poverty go the other way.

You are right. In section 3 of the briefing paper, we set out the scale of spending of £3.3 billion and our judgment that it is not always clear what impact that has had on child poverty. That is a significant finding.

In our audit work, and in the work of this committee and other committees in the Parliament, emphasis is placed on the importance of having a much clearer relationship between public spending and not just outputs, but the outcomes that have been delivered as a result of that spending.

In paragraph 61, we seek to give a bit of additional context to what some of the £3.3 billion has been spent on. Of course, some of it has gone towards the Scottish child payment, support for low-income households and Covid funding. However, it is harder to make a judgment about how successful that spending has been in delivering better outcomes or reducing child poverty.

As Mr Coffey mentioned, the Scottish child payment is expected to bring about a 5 per cent reduction in child poverty. More generally, however, achieving that will be challenging, which takes us back to one of the original judgments in the report—that, as we move into the third child poverty reduction plan, we need to have clear expectations about what effect individual measures will have on the overall targets.

I will pause there, as I think that Corrinne Forsyth may wish to say a bit more about the spending and the associated analysis that sits behind it.

One of the key things that we found when looking at the spending was the inability to see what proportion of spend on universal policies such as early learning and childcare and free school meals for primaries 1 to 5 benefited low income households. That big missing bit meant that we could not come up with a definitive figure for what was spent on child poverty, above the £3.3 billion. Obviously, a large part of early learning and childcare spend, which is for everyone, will be directed to low income households.

We also tried to consider the three levers of tackling child poverty—income from employment, income from benefits, and cost of living—to see what the Scottish Government had spent on those three areas. For reasons that we have described in relation to prevention, it was difficult to see what had been spent on some areas. Early learning and childcare, for example, can be cut in different ways, which meant that it was quite difficult to come up with a definitive figure. When we do our work in future, we can perhaps drill down into that in a bit more detail.

Is it possible to extrapolate a certain reduction in poverty from the spending of a certain amount of money? It does not seem to me that that correlation exists.

I am not an economist, but I am drawing judgments based on the reliability of some of the associated material. It is possible to make some of that correlation on a reliable basis. For example, we can see the anticipated impact that the Scottish child payment will have in terms of reducing child poverty.

There are, of course, caveats. That goes back to what we discussed earlier in relation to the range of measures that are in place. Some factors will have a bearing on one measure but, of course, there are other factors around cost of living that will have a detrimental impact. The interaction of the various measures—interventionist and otherwise—is complex, and then there are environmental impacts that will have an impact. However, we think that the data is sufficiently reliable to enable us to make that assessment.

It will be interesting to see how that develops.

Paragraph 63 says:

“There is no readily available evidence on how much councils spend on tackling child poverty. It is difficult to fully identify this as it involves a range of actions across different policy areas.”

What needs to be done to ensure that that evidence can be provided to support the impact of council spending on tackling child poverty? Again, councils are key deliverers in this respect. We do not know how much money they spend in this area but, clearly, it is a lot of money. How do we ensure that the money is being well spent and is going to the correct area? I think that that question might be best directed to Andrew Burns.

My colleagues might want to come in and amplify my response.

The issue goes back to what I said to Sharon Dowey about the annual reports on reducing child poverty levels that are produced by councils and health boards. There is no systematic pan-Scotland analysis of those reports, which goes straight to what you are asking about. We can improve the analysis by having better joined-up collection of data across local authorities and by sharing that data between local authorities and the Scottish Government, and—to go back to Willie Coffey’s point—between the Scottish Government and the UK Government.

That better co-ordination and consistency of data is not a substitute for the raw spend that the Auditor General was referring to a moment ago, but it would help to improve the power of that raw spend if that co-ordination was carried out in a systematic way. That approach is quite lacking across and between local authorities at the moment.

Who should drive that co-ordination?

I think that that is a joint responsibility of the Scottish Government and the Convention of Scottish Local Authorities. It is both a national issue and a local issue, and it will not be solved by one level of government attempting to solve it. Proper co-ordination across both significant levels of government in Scotland—that is, local and national Government—is needed. As I have said, continuing and better co-operation up a level—between the Scottish Government and the UK Government—is needed, as well.

11:15  

From your knowledge of the councils—

Colin, I am afraid that we are running out of time, so I will have to move things on. The clock is against us. Thanks for your questions. If there is time, I would bring you back in, but I think that that will be very unlikely.

Craig Hoy has the final area of questioning.

Good morning, Mr Boyle. I want to look at achieving the child poverty targets. To give a snapshot of where we are, there are, obviously, some pretty severe and acute cost of living issues coming towards us. At this point in time, should we be more concerned about the inability to meet the absolute target or the relative target, or are both equally important in public policy terms and objectives?

We should be concerned about all the measures, because they all give a rounded assessment of the experience that Scotland’s children and young people are dealing with. We should bear in mind that some of the data relates back to the early stages of the pandemic. I think that we can expect that aspects of that will have deteriorated.

As we have touched on at a couple of points, the relative poverty rate is hovering at around 26 per cent. That is the most commonly used indicator, but it does not allow for cost of living issues. If we look at the absolute measure, we can see that a significant proportion of Scotland’s children and young people are experiencing absolute poverty. All of us—whether we are scrutineers, auditors or policy makers—are concerned about the impact that that is having on children and young people now and will have on their future life chances.

Paragraphs 66 to 69 of the briefing look at whether the targets will be hit or missed and mention “key commentators” who have noted that policy changes will be required in order for the Government to achieve its poverty targets. Can you give a flavour of who those commentators are? I saw that the Fraser of Allander Institute was quoted in the report. What are those commentators’ recommendations on the significant policy changes that might help us to meet those targets?

You are right. We cited the Fraser of Allander Institute and the Joseph Rowntree Foundation in the paper as having produced material that commented on the progress and the likely further interventions that will be required to be made in order to meet the child poverty reduction targets as part of the third plan. I will bring in colleagues in a moment to share some of the detail of that with the committee.

I recognise that the fiscal environment is very challenging. In order for Scotland to deliver on its child poverty reduction plan towards the end of this decade, significant choices will require to be made. If we assume that the overall size of the Scottish budget will remain as is and the focus is on meeting child poverty reduction targets, there is the possibility that that will come at the expense of other parts of public sector delivery. It is clear that those are choices for the Government and the Parliament to make as they scrutinise budget choices.

I turn to colleagues to support the committee with details on the specifics and the connections that other commentators have made.

As we have set out, there are various sets of modelling, and they all do slightly different things. However, they were prepared at different times using different assumptions. The modelling has had to be updated as announcements have been made on, for example, the Scottish child payment and the changes to it. The most up-to-date modelling that we have is the Scottish Government modelling that was done as part of the second child poverty delivery plan work back in March.

A few months after that modelling came out, the Fraser of Allander Institute did its own modelling, using slightly different assumptions. As a result of its modelling, which was in relation to relative poverty, the Government assessed that, at that point in time, it would likely reduce relative poverty to 17 per cent in 2023-24 when the interim target was 18 per cent, but the Fraser of Allander Institute was a bit less optimistic and, having also considered the difference that the Scottish child payment would make and using the same assumptions, concluded that relative child poverty would be reduced to 19 per cent, thus missing the interim target.

At the moment, we do not know when the next lot of modelling will be undertaken. The Scottish Government decided to do its own modelling, and its main reason for doing so was to give it flexibility in testing different policies before they were implemented and because it had the in-house capability.

That is just a wee bit of background on what has been happening with the modelling since March, but it is very likely that the modelling will be redone again, whether by the Fraser of Allander Institute, the Joseph Rowntree Foundation or others, using different assumptions. After all, things will have moved on since the last time, and it is hard to make like-for-like comparisons.

Paragraph 71 mentions not only the importance of employability policies in meeting targets but the very long lead time before they have any impact. Mr Boyle, do you have any impression that the Scottish or UK Government is setting in place the long-term employability and employment policies that will help reduce and then eradicate child poverty over a longer cycle?

We have not undertaken any dedicated work recently on employability schemes, but, given the committee’s interests, you will be familiar with our work on Skills Development Scotland’s joint planning, the important role that it plays alongside the Scottish Funding Council and the overall arrangements that those organisations have to support longer-term skills planning as well as the Government’s response with regard to providing additional clarity on such matters. We are closely monitoring and following those things.

As we touch on in the briefing paper—and going back to some of the fiscal pressures that we mentioned a moment or two ago—we would also recognise the Scottish Government’s emergency budget review statement in respect of employability and the demand-led savings that it has reported that it intends to make against some employability schemes through this year’s budget. We—like the committee, I am sure—will be closely monitoring the Government’s employability plans, given that it is a key preventative measure for addressing longer-term poverty reduction targets. We are keeping these things under review.

Finally, the briefing recommends that the Scottish Government should

“set out options and progress actions to meet the ... targets”

and that they be put in place, or certainly developed,

“well in advance ... of 2026.”

Are you sighted on the Government’s action or inaction in relation to that, and can you update us on what has been put in place?

The short answer is that we have do not have the detail on that—or, at least, the Government has not yet shared that with us.

We are interested in this issue, but as we point out in the briefing, there needs to be better engagement by Government and its partners with people who have experienced child poverty. They need to speak to children, young people and families to ensure that they, too, can shape and influence these policies. Indeed, a key part of this paper is the need for that stronger engagement with children and young people to ensure that their voices are heard with regard to the measures that will be taken.

Thank you.

On that last point—and this covers part, though not the full extent, of the evidence that we have taken this morning—you say quite critically in the briefing paper:

“Gaps in data and not enough involvement of children and families with lived experience of poverty are hindering the development of sufficiently targeted policies”.

That lack of involvement is actually having an effect on the policy-making process and therefore the outcomes, and it is absolutely critical, is it not, to the approach that is adopted if we are going to get these things right.

There is another issue with regard to employability that I am bound to ask you to clarify. Am I not right in thinking that two out of three children living in poverty in Scotland live in households with at least one adult in work? This situation has come about not because there is a big unemployment problem, but because people are not being very well paid when they go out to work.

I should have the specific data in front of me, but it is our understanding, too, that low-paid work has a direct bearing on household income and affects relative poverty measures. There is a clear connection in that respect, and indeed it speaks to the other point that we make in the briefing paper about having preventative measures and longer-term, better-paid work to prevent children and young people experiencing poverty in the first place.

I am going to have to draw this session to a close, but I thank Andrew Burns, Corrinne Forsyth, Tricia Meldrum and the Auditor General, Stephen Boyle, for their evidence this morning. I am afraid that we have run out of road, but we might well come back to you to follow up your oral evidence.

I now draw the public part of this morning’s meeting to a close.

11:25 Meeting continued in private until 11:41.