Child Poverty
Good morning and welcome to the fourth meeting in 2011 of the Local Government and Communities Committee. I remind members of the committee and the public to turn off all mobile phones and BlackBerrys.
Agenda item 1 is an evidence session on child poverty. As members are aware, the committee has an on-going commitment to monitor progress and to scrutinise the Government’s strategy for dealing with child poverty.
I welcome Nicola Sturgeon, Cabinet Secretary for Health and Wellbeing, to the meeting. Good morning, cabinet secretary. Good morning also to the Scottish Government witnesses: Samantha Coope, head of the tackling poverty team; Jim Stephen, head of early education and child care; Julie Bilotti, policy manager for employability; and Anne MacDonald, a statistician with communities analytical services.
I believe that the cabinet secretary has a short statement to make before we move to questions.
Thank you for the invitation to come to the committee. I welcome the opportunity.
We all start from the same place on this issue: too many Scottish children live in relative poverty, and the figures have remained stubbornly steady for far too long. We all know the impact that growing up in poverty can have on children, and I think that we are all committed to doing what we can to tackle poverty—it certainly remains very much at the heart of the Government’s agenda.
This meeting is taking place at an opportune time. Members will be aware that we are developing the Scottish child poverty strategy, which we intend to launch in March. The strategy is required from us under the Child Poverty Act 2010. We are required to set out what we will do to reduce levels of child poverty in Scotland and to ensure that as few children as possible experience any kind of socioeconomic disadvantage.
That said, we view the issue of child poverty in broader terms. We intend not just to set out what we will do to maximise income and household resources for families in Scotland, important though that is; we also wish to set out what we are doing and what we will continue to do to improve children’s outcomes and life chances, regardless of family circumstances.
The strategy will be based on key strategic principles, and we will seek to ground those in solid evidence of what works in tackling child poverty. Many of those principles will be familiar to the committee. We continue to make a strong case for early intervention and prevention. The vital importance of getting it right for children in the early years will be a defining feature of the strategy, as it has been in our work to date. We view early intervention as being not just about the early years, although that is fundamental; it is also about preventing problems at an early stage from escalating throughout the life course. Effective financial inclusion and financial capability, for example, can be powerful interventions for helping people to take control of their lives and for preventing them from spiralling into debt.
Ensuring that policies and services are child centred also lies at the heart of what we do. The strategy will therefore be firmly grounded in the getting it right for every child approach. A key aspect of the strategy’s development has been the wide-ranging consultation, which has included engagement with young people and parents of children who experience poverty, and with poverty experts. There has been on-going engagement with other key stakeholders, and a written consultation exercise has formed part of that.
We believe that our current approach to tackling poverty and disadvantage is strong, and we are glad that stakeholders demonstrate and articulate broad support for it. We are now in the process of drawing out the core aspects of that approach, ensuring that we focus on those areas of action that we believe will make the biggest impact on child poverty.
Given the subject that we are discussing, it is important to talk about the broader economic context and policies that are being pursued by the United Kingdom Government, both of which have a big impact on our efforts to tackle child poverty. We are all very conscious of the challenges that are presented by the economic climate and of the constraints that we work within under the devolution settlement.
We are still assessing the full impact of the UK Government’s welfare reforms, of the proposed cuts to benefits and of the wider budget cuts on devolved services and our ability to tackle child poverty. On the basis of our assessment so far, we believe that those cuts will make reaching the child poverty targets more challenging than ever. The analysis that has been done suggests that the cuts to benefits that have already been announced might undermine the wellbeing of the very people we are trying to help. That is a big concern for the Scottish Government.
To conclude, despite those challenging circumstances, it is important that we remain optimistic and focused on what we, as a devolved Government, can do to tackle the long-term drivers of poverty and disadvantage. Such a long-term approach, which is focused on tackling the root causes of poverty and on breaking cycles of deprivation, takes time to deliver results but it is welcomed by stakeholders. That long-term view has been at the heart of our approach since we took office, and it will continue as we move forward with the child poverty strategy.
I am happy to take questions.
Good morning, cabinet secretary.
You mentioned the economic situation that we face. In particular, it is fair to say that families who are living in deprivation face the brunt of some of those issues. Given that the retail prices index and the consumer prices index have gone up by just over 4 per cent, on average, energy costs have gone up by 9 per cent and rent rises are taking place in the public sector, as well as the housing association sector, do you think that the Scottish Government is on target to reduce child poverty by 50 per cent by 2010-11? Are the targets for 2020 still realistic, given the situation that we find ourselves in?
In my opening remarks, I alluded to the fact that the climate and the context that we are working in make all that incredibly challenging. Everyone recognises that, so I will not try to suggest otherwise. However, it is important that we remain committed to meeting those targets, which are there for a reason. They are there to focus minds and to focus policies, initiatives and action so that they can be met. Even though the targets are challenging, I am committed to ensuring that we continue to focus on them.
The committee will be well aware of the overall statistics. We saw a fairly significant decline in child poverty from about 1994-95 until a few years ago. Since 2006, the figures have remained steady, but steady in the context of child poverty is not good enough. We need to get the figures down even further. The statistics show that we are in a slightly better position than other parts of the UK, but I do not want to overplay that point, as every child in Scotland who is living in poverty is one child too many, and we must tackle the issue. We still have a monumental challenge on our hands to meet those targets.
We do not have all the relevant levers at our disposal. We can address issues such as income maximisation through benefit take-up campaigns and so on, but most of what we have the power and the ability to do under the current devolution settlement involves tackling some of the longer-term drivers of child poverty such as educational underattainment and poor health, which, by their very nature, are long-term issues.
That is the long answer to your question. The shorter answer is that meeting the targets will be extremely challenging, but all of us—regardless of party and regardless of where we come from on the issue—would probably agree that it is important to stay focused on it.
I fully agree that the challenges that we face in dealing with child poverty are very tough. You mentioned that the child poverty stats have remained static for the past three or four years, but those stats do not take account of household costs. The issue for me is how much account is being taken of the additional burden that increases in household costs are placing on families on low incomes whose children are in poverty.
As I indicated in my previous question, I include in household costs the fuel costs that many families are beginning to face. The hikes that have taken place will affect disproportionately those on low incomes. I asked whether we had met the target of reducing child poverty by 50 per cent by 2010-11, on the way to meeting the 2020 targets.
No, but we remain focused on doing that. Fuel costs impact disproportionately on certain groups in the population: those at the lower end of the income scale, pensioners and people who live in rural parts of the country, because of the increased cost of petrol at the pump as well as heating costs. All those issues have an impact on the living standards and income that families have at their disposal. Not all of them are within the control of the Scottish Government, which is a frustration for us.
We continue to argue strongly with the UK Government that action needs to be taken to moderate the rising costs of energy and fuel, as well as of a range of other things. The recent VAT increase will have an impact on people’s income. We continue to make a strong case to the UK Government on those issues, with varying degrees of success, as well as on the package of proposed benefit changes. We do not disagree with all of those changes, but we have a real concern that, as a totality, they impact disproportionately on the most vulnerable groups in Scotland.
What progress has been made on improving reporting by local authorities on the scale of child poverty in their areas? Has there been a marked improvement in the reporting mechanisms, or are local authorities still failing to identify or to target some children who find themselves living in poverty?
I will answer the question in two parts; I am not sure which of the two concerns you most. The first is the production of statistics that would allow more localised monitoring of child poverty. The second—which, I suspect, is of most concern to you and which other members may pursue later—is the single outcome agreement approach.
In recent years, statisticians have been involved in a project to produce estimates of relative poverty at local authority level. They do so by combining data from the household survey with data from the family resources survey. The committee will be aware of some of that work, which is intended to meet the need—which users of poverty statistics have identified to us—to improve the quality of income and poverty data that are available at local level, so that global, national statistics are not the only ones available.
Estimates from the work were published for the first time in September last year. The chief statistician says that further quality assurance work needs to be done on the stats before they can be designated as suitable for policy making and use in official documents. That work is being done at the moment. A report on it is due to be produced by the end of this month and will be discussed with statisticians, poverty academics and other experts, so that an update and relaunch of the figures can be agreed. Hopefully, that will mean that in future we have a more localised set of figures to monitor progress—or lack of it—in tackling child poverty.
The second part of my answer relates to single outcome agreements. The latest tranche of agreements include poverty indicators. Around half of them include specific child poverty indicators, but those that do not include other poverty indicators. Some local authorities and community planning partnerships focus on employability indicators; others focus on health improvement and tackling health inequalities.
The annual reports against the single outcome agreements are the first ones that have looked in detail at progress towards the indicators but, as I have said to the committee previously, the single outcome agreement regime and the monitoring of it are at a relatively early stage and there is still development work to be done on that. However, Audit Scotland has said—I am not sure whether it was in evidence to the committee or elsewhere—that the whole process is developing well.
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I welcome the chief statistician’s role in gathering localised data. In a previous life, I had a debate with someone from the Scottish Executive about gathering localised information so that we could get an accurate picture of child poverty in communities. I feel that there is still hidden child poverty in some communities. People fall off the edge because they do not reside in a particular area, or their household income levels are seen as sufficient to take children out of poverty when the reality is different. We need an accurate figure of all the costs that are associated with raising children in Scotland.
Cabinet secretary, when you were at the committee in May, you said that an important part of the Scottish Government’s work
“is ensuring that poverty—particularly child poverty—is at the forefront of everyone’s mind when significant decisions are made on policy, services and budgets.”
You also said that you were
“considering how such decisions can be systematically poverty proofed.”—[Official Report, Local Government and Communities Committee, 5 May 2010; c 3138.]
What work has taken place since then? What does “poverty proofed” mean at the end of the day?
That is one of the things that we are taking forward through the learning network activities. We have commissioned work on poverty impact assessments that will include the concept of poverty budgeting. That work is looking to summarise a range of approaches to poverty impact assessment and the consideration of poverty issues in the budgeting process. The study will suggest conclusions from looking at that work and recommendations on how the Scottish Government can proceed on that. That is important work, in that it will inform how we do what I spoke about in May, which is to put poverty issues at the heart of decision making. Obviously, among the more important of Government decisions are those on how money is spent.
Research has also been undertaken by Glasgow Caledonian University and the report from that, which will further inform how we get better at doing that work, is due shortly.
Were any of the lessons or ideas applied to the budget process?
Yes. Obviously, in the current budget round, equality impact work was done and fairly extensive work was done on ensuring that we had equality and the need to tackle poverty at the heart of the decisions. I can provide the committee with a full explanation of exactly what that work entailed in producing the draft budget.
I know that the budget decisions have not yet been made, but I am trying to follow the process. Was it discussed or anticipated that the cut in the housing budget would have consequences, not for those in absolute poverty, but certainly for those at the margins? As a consequence of that we have, not just in my constituency but throughout the country, proposals for rent increases of 5 per cent and so on, which will have an impact. Is that poverty proofing? Is it about considering how a decision will impact?
We look to take all the implications and consequences of the budget into account. On the housing budget, obviously we are talking about proposals that, as you say, have not yet gone through Parliament, so they are not yet approved budget decisions. The housing budget is a consequence of a drastic cut in the Scottish Government capital budget. We are trying to get as much as we can from the capital resources that we have available for housing, as is happening in other parts of the Scottish Government. Alex Neil will have more to say on this in the next few weeks, but we are very much focused on how we use that budget to deliver the biggest outcome. We are focusing on the output from our housing budget. On the number of social houses constructed, we have a good record to talk about.
I do not know that whether the budget is approved is a material point here, but I take you back to what you said to the committee in May. You said that child poverty, in particular,
“is at the forefront of everyone’s mind when significant decisions are made”
and that poverty proofing is an important part of that.
Let us look at the cut in the housing budget, regardless of how we got there. I concede that we have less money to spend, so cuts have to be made somewhere, but if child poverty is at the forefront of everyone’s mind, how does the budget process protect people who might be affected by the housing cut? Was there a discussion in which it was decided that although that might increase rents, it would not have an undue impact on child poverty? Freezing council tax is a priority. How will that improve the child poverty situation? Will it affect it? How will the policy on prescription charges help us to address child poverty, which is supposed to be at the forefront of our minds? How does that process work in the budget?
I am happy to get into a debate about the impact of individual policies if that is what the committee wants. I take a different view from the one that you have expressed about the impact of our housing budget proposals. I point to the fact that, because of the prescription charges policy, 600,000 people on low incomes who do not qualify for income-based exemptions from prescription charges will, in future, not have to pay for prescriptions. I think that that will have a very positive impact on poverty, including child poverty. We can have a debate about the pros and cons of each of our policy proposals.
As far as the budgeting process is concerned, as I have said previously to the committee, we are engaged in a process of ensuring that we get better at ensuring that, when we make our budget decisions, equality and poverty proofing is a key part of that process. We have already made significant progress on that by incorporating equality issues in this year’s budget. In doing so, we have taken on board advice from the equality and budget advisory group, and there has been input from the Equal Opportunities Committee. When we consider equality in the budget, we include socioeconomic factors as a characteristic of equality. We develop an analysis of different policy proposals and their likely impact on people in low-income groups.
The short answer to your question is that such considerations are taken into account in the budget process and the budget decisions that we take.
Your contention is that your decisions have been “systematically poverty proofed”. You believe that the priorities in the budget are consistent with keeping child poverty at the forefront of all that we do in policy terms in the budget. That is your position.
I believe that the budget proposals that we have put forward are right for Scotland in many different respects, including that of the work that we need to do to continue to tackle poverty, including child poverty.
As part of a sum, not at the forefront.
Sorry?
You said that an important part—
Oh sorry—I understand the question.
—of the Scottish Government’s work
“is ensuring that poverty—particularly child poverty—is at the forefront of everyone’s mind when significant decisions are made on policy, services and budgets.”—[Official Report, Local Government and Communities Committee, 5 May 2010; c 3138.]
Yes, that has been at the forefront of the Scottish Government’s mind as we have put forward our budget proposals. I believe that our proposals to remove prescription charges for 600,000 people on low incomes who do not presently qualify for exemption and to freeze the council tax, which will mean that low-income families do not have to pay increases, will help with that.
Has there been a systematic assessment of how that helps children who are in absolute poverty? How does freezing the council tax help the child poverty issue?
It helps families who are not entitled to council tax benefit. In the case of prescription charges, taking away those charges and having a universal approach helps families who are not eligible for exemption. Those are not the only relevant policies. I can point to other ones, such as extending eligibility for free school meals and the work that we are doing on early intervention with families and children in the most deprived areas. Taken as a totality, we have produced a budget that has reducing child poverty at its heart.
Can you provide the committee with the systematic analysis that you carried out of those policies and how they would benefit the work to reduce child poverty?
I did not give evidence to the committee as part of the budget process, but I imagine that the committee will have been engaged in the budget scrutiny process and will be aware of the range of documents, including the equality impact assessment, that has been produced as part of the budget process. The committee has had the same opportunity as other committees to scrutinise all that.
My colleague John Wilson was right to highlight some key external issues that affect child poverty in Scotland, such as fuel costs and benefits, but I would like to bring back the focus to what we can do in Scotland, which is the reason why we are having this discussion. The Government has a lot of information at its disposal on the issues that children have. Who does it consider faces the biggest problem? For example, is it children of single parents in a workless household? What can the Government and local authorities do in future to help people who are most in need?
A range of interventions is required to tackle those who live in child poverty or those who are more likely to experience poverty generally or child poverty. That includes the work that we would categorise as having the most immediate impact, such as that on income maximisation and the work that is reflected in many single outcome agreements on employability and tackling the impact of in-work poverty, which is a significant issue when we talk about child poverty. It also encompasses much of the longer-term work that the Scottish Government is doing, which, as I said, is where most of our policy levers lie. That work is encompassed by the three key strategy documents to which we work: “Equally Well: Report of the Ministerial Task Force on Health Inequalities”, “Achieving Our Potential: A Framework to tackle poverty and income inequality in Scotland” and the early years policy framework, which aims to tackle significant health inequalities among children and younger people and to consider issues of educational attainment. Those are the broad strands of work that we believe will have the biggest impact on levels of child poverty, some in the short term and many in the medium to longer term.
Earlier, you were reasonably candid about the interim target, which the Scottish Government has not attained, and the future targets, which you said were challenging. I do not doubt that for a minute. To help the current Government and Parliament, and future ones, to keep a close eye on progress on eradicating child poverty, what monitoring will there be of child poverty at national and local levels?
The targets that we will work towards are those that we signed up to under the Child Poverty Act 2010, which was introduced by the previous UK Government. As I said in response to John Wilson, the targets are extremely challenging. Any expert looking at the situation from the outside would say the same. However, it is right that we remain committed to them and focused on the issue. On monitoring, the child poverty strategy will commit us to the things that we have to do to get towards the targets. The various statistics and data collection at national and local levels that I talked about in response to an earlier question will enable not just the Government but Parliament and other stakeholders to monitor our progress over time on reaching the targets.
Your first question was who was most likely to be experiencing child poverty, or who was most vulnerable to child poverty. I guess that, at the moment, you are talking particularly about lone parents and parents of disabled children. A particular issue is the rise in in-work poverty. Even in families where at least one parent is working, there are significant poverty levels.
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I am grateful for those answers. I agree that there are significant challenges for us all in ensuring that work gets taken forward. Hopefully, we can have a greater focus on the Scottish Parliament’s ability to continue to deliver in those areas.
Cabinet secretary, you have identified some groups that you think might be particularly at risk of poverty. Would you include young carers?
Yes.
Can the Scottish Government take particular measures to enable young carers to avoid poverty?
I am sure that the member will be familiar with the carers strategy that the Scottish Government has published—I am happy to furnish the committee with it—which narrates a range of things that we seek to do to help young carers. I will be candid about this: over the past four years we have made progress on assistance to carers generally and, within that, to young carers—an example of that is the increase in the availability of respite; however, it is an area in which we have a significant distance still to travel. I am not alone in visiting projects that try to help young carers. Their impact on the life chances, as well as the immediate life circumstances, of young people who have significant caring responsibilities is immense. I hope that whichever one of us is responsible for these things after the election will keep this as a key priority, because we have a lot more work to do.
I appreciate the strategy on carers, particularly as it relates to young carers. We support the direction of travel.
In answer to a question from John Wilson you suggested that single outcome agreements are having an impact on addressing poverty. We know that many of the measures that need to be taken would need to be taken at a local level. Measures relating to young carers are one such measure. However, the submissions that the committee has received from various children’s organisations ask us to consider the need for a statutory duty to tackle child poverty at local level. The cabinet secretary will be aware that we discussed this previously when we were considering the legislative consent motion on the Child Poverty Act 2010. At that stage, you did not think that it was necessary to impose a duty. Has your opinion on that changed?
On balance, I still think that that is not the right way to go. There is no absolute right or wrong answer to this. We have had this discussion in this forum many times before. There is always a tension between national prescription, legislation and the statutory approach on the one hand, and local flexibility, which I suppose we encompass in the single outcome agreement approach, on the other.
I think that the single outcome agreement approach is the right one. I do not contend that at this stage in its development it is perfect and that there is not still room for improvement, but it is getting stronger as we progress.
Mary Mulligan is familiar with these arguments. We took very different views on the child poverty statutory obligation on local government and on the socioeconomic duty, which were two very different things. The socioeconomic duty—which, unfortunately, the UK Government looks as if it might not implement, which we are disappointed about—was a lighter-touch arrangement than the child poverty statutory obligation.
The relationship that we have between local and national Government is the best arrangement. It allows us to strike a balance between national policy and local flexibility, as local organisations—whether local authorities, health boards or whatever other local agency we are talking about—will always be better placed to assess the needs of their local areas. The view of the children’s charities and others that Mary Mulligan expressed was expressed to us through the consultation on the child poverty strategy. We will always listen to what those organisations and experts in the field have to say and will continue to assess our approach in light of progress. Such things are never fixed in stone.
You mentioned a difference of approach between the Scottish Government and the Westminster Government. You also mentioned to my colleague John Wilson that you are unhappy about some of the changes to benefits. That implies that you are not unhappy about some, so what are you happy about?
I probably gave slightly the wrong impression. When I said that we would not oppose everything, I think that I was trying to say—in fact, I know that I was trying to say; I apologise if I did not articulate it particularly well—that we agree with the general notion that work should pay, that our benefits system should be more streamlined and simpler to understand than it is just now and that disincentives to work should not be built into the system. The last time I was here I agreed with Jim Murphy, who had said the same. We agree with that general concept and I think that Mary Mulligan’s party agrees with it too. That is what I meant when I said that we would not oppose all the changes.
The specific benefit changes that have been announced so far amount to a lot of benefit cuts. My big concern, and the Government’s, is that they will have a disproportionate impact on low-income families and lone parents—the most vulnerable. That is based on the analysis not only that we have done so far but that we have had from the Institute for Fiscal Studies, the Trades Union Congress and the Child Poverty Action Group.
The Scottish Government is working hard to do what it can to influence the decisions that the UK Government is taking. I had a telephone meeting as recently as last week with Lord Freud, who is one of the ministers involved in the welfare reform work. We do not have powers of decision on welfare and benefits, but we are working as hard as we can to influence decisions that we are worried will have a big impact on the most vulnerable in society.
Has that work been progressing a wee bit better? I remember that, the last time you gave evidence to the committee on child poverty, you said that the high-level meetings were still in transition. However, we know who is in power now. You also said that the Scottish Government would do a lot of work on whatever it could influence. Is that progressing well or badly?
We are working hard at it. Since the new Government took office, I have had a face-to-face meeting with Iain Duncan Smith; Alex Neil has met Chris Grayling, the Minister for Employment; and I referred to the meeting that Angela Constance and I had last week with Lord Freud on some of the welfare and benefit issues. Those are ministerial meetings, but an immense amount of work goes on at official level.
I will not sit here and say that it is all perfect, because it is not. In our dealings with the Department for Work and Pensions, we frequently get frustrated at a lack of responsiveness and an inability or unwillingness to share proposals at an early stage to allow us to influence them. I know that committee members will understand that it is not simply a case of a devolved Government trying to influence reserved matters—although I think that we have the right to try to do that—because many of the changes to those reserved matters have a big impact on devolved services, so it is really important that our views are taken into account.
On the positive side, I put on record the point that Iain Duncan Smith and his junior ministers have all been keen to say to us that they want to improve relations and want to give us as much opportunity as possible to influence things. We will take them at their word and we hope that relations will improve as time goes on.
You have the committee’s support in that work. That will be in our report and we hope that, whoever is in power, we can play a cross-party role in influencing the work that needs to be done.
I appreciate that.
I share the cabinet secretary’s concern about the effect that some proposed benefit changes will have on Scotland and very much agree that there will be a detrimental effect—we do not agree often, but I am sure that we agree on that. In your work on the child poverty strategy, how far has it been necessary to try to skew what is done in Scotland to address or at least mitigate some of the effects of the changes?
I stress that the issue is very much in our minds as we put together the child poverty strategy. As you will appreciate, our ability to mitigate benefit changes that will have a bad impact on vulnerable groups is limited. Much of what we can do is to do with the longer-term drivers of change. Members will be aware that we have made efforts in relation to benefit maximisation for people on low incomes. However, when the benefits that we want to maximise are being cut there is a limit to what we can do.
People outside the Scottish Government have described the proposed benefit changes in their totality as regressive and we agree with that interpretation. For example, the change to the housing benefit regime that will result from the decision to use the 30th percentile rather than the 50th percentile of local rents—it sounds very technical—will make something like 55,000 households in Scotland worse off by an average of £10 per week. That is just one change, which starts to give a sense of what we are dealing with.
We need to keep trying to influence the process and we need to try to work harder to skew our policies to mitigate effects, as you suggested, but we should not mislead people about how much we can mitigate damage from benefit changes.
I understand and appreciate that entirely. I am sure that we can all think of changes that will have a detrimental effect on particularly vulnerable people. This discussion is about children, but I am also concerned that elderly pensioners who live alone in the family house might find that they are no longer eligible for housing benefit.
I understand why the strategy is being prepared on the basis of a three-year programme, but will there be opportunities to consider approaches for the medium and longer-term, or will that be a problem?
The timescales were set out in the Child Poverty Act 2010, which gives the context for what we are statutorily required to do, but that does not mean that it is all that we can do. You made a reasonable point: we need to look at the short, medium and long term in our approach. That is what we always try to do.
We intend the strategy to cover not just issues in the three-year timeframe but longer-term issues, because it is over the longer term that, given its current powers, the Scottish Government can have the biggest impact on tackling health inequalities and educational attainment issues, which impact over time on the drivers of child poverty—I am repeating myself. We very much need to look at the long term as well as the more immediate timeframe.
I agree. Some of the issues are almost generational, given the timeframe in which we might expect change.
I am not trying to get you to reveal the strategy’s contents prior to its launch, but will there be an emphasis on opportunities in the early years, in an attempt to influence the outcomes—that is a terrible way to describe young people’s achievements—and effects for families and communities later on?
Early years is a significant strand of what we do. As you will recall me saying, and as you know from other sources, our whole approach to child poverty is based on three overarching strategies, one of which is the early years strategy. The approach to the early years will be at the centre of everything that we do on child poverty. We recently announced the establishment of an early intervention fund of £5 million. The fund will not be exclusively about early years, because early intervention is not just about early years, but the early years are likely to be a key focus.
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Good morning, cabinet secretary. The UK benefit reforms, I know, are external factors and you have said how you will try to mitigate the circumstances and that you will make representations. When I read the recent Scottish Government document on the effects that the housing benefit changes might have, one figure jumped out at me. The reduction in housing benefit for people who have received jobseekers allowance for more than one year will mean that in Glasgow, which I represent, housing benefit will be cut by up to £10 per week in about 2,500 households. If the 2,500 figure was aggregated across Scotland, do you know how many such households would have children in them?
I cannot answer that. As you will appreciate, we are working to assess the impact of benefit changes that are in some respects not always final. Unless one of my officials tells me otherwise, I do not think that we can answer the question now. However, work is in progress to drill down as far as possible into the impact of the changes.
The figure that I cited for Glasgow jumped out at me. Does that reform by the UK Government cause you concern?
It is fair to say that most of the housing benefit reforms cause me concern because of their impact on the most vulnerable and people with low incomes. The exception is perhaps the proposal to cap housing benefit rates, as not many properties for which housing benefit is received in Scotland would breach a cap. The change that I mentioned to Patricia Ferguson causes me concern. I know that we are talking about children today, but the increase from 25 to 35 in the age threshold for receiving housing benefit for living alone will have a big impact in Scotland.
I clarified what I meant about not opposing everything that will be done. We all agree that people who can work should work, that work should be made to pay and incentivised and that the benefits system should not be a hiding place for people who just do not want to work. However, the devil is in the detail. From what we have seen of much of the detail, the reforms might or might not achieve some of the overarching ambition, but the danger is that many genuinely vulnerable people will be penalised in the process.
When the committee considered child poverty in the past, we recommended that the UK and Scottish Governments should work together to look more creatively at the tax and benefits system. That was our nudge to the Scottish Government to make suggestions more proactively to the UK Government about what could be done better. Kinship care payments were one motivation for the suggestion, as they are clawed back by the UK Exchequer.
I appreciate that there has been a flurry of benefit reforms that we would consider regressive, but has the Scottish Government contacted the UK Government about how changes could be made that would be progressive as opposed to regressive?
We raise such issues with the DWP regularly. Although it does not relate specifically to the point that Bob Doris raises, we are arguing strongly for the devolution of responsibility for Jobcentre Plus, which would allow us to integrate the employability agenda much better. We are responsible for matters such as health and skills that influence people’s ability to enter the job market, so more devolution would lead to better integration.
I take the view—with which I think that Bob Doris agrees, although not everybody around the table agrees with it—that if the Parliament had power over tax and benefits, we could design a system that was much more suited to our needs than the system that we have now is, although that is a slightly bigger debate.
We will raise issues as appropriate with the DWP, but we need to stay focused on where we can have the most influence. As I said to the convener, influencing the DWP is challenging. We work hard on that.
I agree about devolving tax and benefits. I was trying to strike a consensus in the committee, but I obviously failed—
You are obviously much more consensual than I am.
I am known for my consensuality.
I referred to external forces from the UK Government, to which we are reactive rather than proactive. However, we have influence over internal forces. John Wilson and others have mentioned the idea of a statutory duty on local authorities in relation to child poverty. I will look at the matter another way.
If we were to put “child poverty strategy” at the top of a blank page of paper for every local authority and write down every single outcome indicator and outcome that relates to tackling child poverty, we would hope to have—in a dry fashion, of course—some form of child poverty strategy at a local level. I agree that there should be flexibility locally, that the matter should be a local responsibility and that there should not be a statutory duty placed on local authorities. However, if three, four, five or six years down the line some local authorities still just have the heading and a blank sheet of paper, would you consider placing a statutory duty on them?
That is a very good try at getting me to go further than I went in response to previous questions. The phrase that I used was that these things are never set in stone. The objective is tackling child poverty. This is an end-versus-means argument: we should deploy the means that allow us to best achieve the end.
I take the view that our relationship with local government, encompassing the single outcome agreement approach, is the right one, because it gets the balance right between setting national policy objectives and allowing local priorities to be set to meet local needs. I repeat what I said previously: the single outcome agreement is an evolving process, so it will continue to strengthen and to be further embedded.
If you were to do the mapping exercise that you outline—the Government previously published an overview report on the first round of single outcome agreement reports and I believe that the same will be done for this one—you would get a clear sense of what is being done to tackle child poverty in each locality across the country. Committee members may say that such and such a partnership should be doing more in this area or that area, which is perfectly legitimate, but you would get a sense of what is being done. I hope that five or six years down the line, we have an even stronger sense of what is happening. We keep all these matters under review because, as I said, the key objective is to meet the targets, albeit that they are very challenging, so we need to ensure that we are equipping ourselves properly.
I am also optimistic, but I finish off by saying that I see single outcome agreements as a window of opportunity for local authorities to step up to the plate. Of course, if they fail in their responsibilities, the introduction of a statutory duty will perhaps be necessary, but we still have to wait and see how the single outcome agreements bed in. I thank you for your answers to my questions.
Cabinet secretary, it is pretty obvious that there is a tension in this policy area between long term and short term—you referred to that yourself. You have said that this strategy is a big part of the Scottish Government’s action to break the poverty cycle, which is, as you said, generational. From that perspective, we have to look at at least 20 years—I think that that is right—although to some extent the situation is forced on us by the powers that we have.
Is there a danger that the current statistics, or even intermediate targets, become a distraction from pursuing that long-term aim? You said that the benefit changes meant that you might have to skew your policies. I presume that that means skewing them from long term to short term. Specifically, when you are poverty proofing the budget, to what extent do you look at the longer-term effect on poverty indicators rather than at what the indicators will be this year or next year as a result of the budget?
We look very much at the longer term, but not to the exclusion of the shorter or more medium term; a lot of what we are doing in this area is long term.
One example of work that I am very involved in is around what we call the family-nurse partnership approach, which we are currently trialling in Edinburgh and are about to trial in Dundee. It is about providing very intensive one-on-one nursing support to young women who get pregnant as teenagers to ensure that they develop their parenting skills and that the child, both before birth and for the couple of years after birth, is getting the right support and that the mother and, indeed, the father, are being supported back into education, training or employment if that is what they want to do. That is one example of an approach that I believe instinctively will work, but it will be some time, probably a life cycle, before we have the hard evidence to demonstrate that it has worked. That is one example of the many different approaches that we are taking that are fixed on the long term.
I acknowledge the premise behind your question: given the long-term nature of the challenge, should we distract ourselves with short-term targets? My view is that we have no choice but to consider both types of target. Although we know that we must focus on the long term if we want to have a real impact, none of us can decide that the kids who are living in poverty today—right now—can just be forgotten about. Our approach must be for both the long and the short term. We must keep the balance right, whether in our budgeting process and in other strategic approaches, or in our shorter-term policies.
I am not arguing that our approach has been 100 per cent correct, but I hope that the work that we have done so far, and the child poverty strategy, will strike a balance between what we can do in the here and now—which is limited because of our powers—and what we will have to do in the long term to make the biggest difference over a generation or more.
Cabinet secretary, you obviously set great store by your relationship with local government; but did I detect that you were perhaps slightly more dismissive about your relationship with Whitehall?
No, not at all. However, I am not giving the committee any exclusives, and I am not expecting any front-page stories tomorrow, when I say that I am a nationalist and I believe that we should have all of those powers ourselves.
I think that we understand each other on that one.
Yes—so that is my starting point.
As a minister, I have taken the approach—and all my colleagues have taken the same approach—that we must work with what we have just now as well as arguing for what we want in the future. We have always tried to have a constructive relationship with ministerial counterparts. In the main, we have managed that. As will always be the case—whether here, or between here and Whitehall—it is the disagreements that capture the headlines. However, the disagreements are actually rare, and they should be seen in the context of the constructive work that we do.
By and large, we had good relationships with the previous UK Government. I am going way off topic here, but I developed fantastic relationships with two successive Labour health secretaries when, for example, we were jointly tackling pandemic flu. I also have a good relationship with the current UK health secretary on similar issues.
The relationship with the DWP has been more challenging—the committee is aware of that and I make no bones about it. However, we are working hard at the relationship, and we have assurances from the new ministers in the DWP that they will work hard at it as well. We will continue to try to develop as good a relationship as we can.
Honestly, I was not trying to wind you up; I was just trying to set off in a different direction.
You mentioned Iain Duncan Smith, and you will be aware that within my party—the Conservative party—Iain Duncan Smith has been responsible for some radical, and perhaps even revolutionary, thinking. Conservatives see it that way. Have you found anything of interest, or any common ground, in your discussions with Iain Duncan Smith—anything that you may be able to work on jointly in the longer term?
Radical and revolutionary for a Conservative is probably different from radical and revolutionary for the rest of us.
I think that I have alluded to this point already: I do not know many people who would disagree with the big picture of what Iain Duncan Smith has set himself the target of doing. The benefits system in this country has developed over decades, and it is incredibly difficult. Any of us who have dealt with constituents on these issues know how difficult and complicated it can be. We know how disincentives to work are built into the system, and that the whole system is riddled with such problems. I think that we can work towards trying to simplify and streamline the system, so that we have a system in which it actually pays to work. However, if we believe—as I do—that some specific details of how the policy objective is being implemented, and some of the cuts in benefits spending now and in the immediate future as part of the deficit reduction programme, will impact disproportionately on vulnerable people, we have a duty to say so.
It is not only the Scottish Government that thinks that. I have already quoted organisations such as the IFS, which says that, overall, benefit changes coupled with cuts in spending on public services are regressive. We will argue our case on such matters but, of course, we will try to find common ground and will try to work together as far as we can. We have already had fruitful discussions on employability and on the possibility of further devolution related to Jobcentre Plus, which I have already spoken about.
The meeting that I had with Iain Duncan Smith was very cordial. It was an initial meeting, but it was cordial and we agreed that we would try to develop relationships as well as we could.
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I feel that I need to explain the concept of radical and revolutionary within the Conservative party.
I think we are all scared by that.
What I meant was that Iain Duncan Smith has taken a line, which was perhaps not the one that Conservatives have taken in the past. He has gone into areas of deprivation and child poverty and looked for policy opportunities to deal specifically with those problems. He has not been universally supported within the Conservative party itself, which has put him out on a limb to some extent.
Is there enough common ground for you to feel that it is appropriate for you to influence the overall argument in such a way as to strengthen the hand of a man who has—
When the Tories were still in opposition, Iain Duncan Smith—credit to him—went into parts of Glasgow that Conservatives had never dared to go to before. He talked a lot of sense about some of the issues that had to be tackled. I did not always agree with some of his policy conclusions or prescriptions but, nonetheless, he was willing to talk about issues and go to places that, as you say, had been forbidden territory for Tories.
Now that he is in government, we will have to judge whether the longer-term welfare reforms—we do not yet have all the details of the universal credit and the welfare reforms that will be in the welfare reform bill—live up to those objectives and, more immediately, whether the benefit changes that have been announced contribute to or undermine efforts to deal with the very issues that Iain Duncan Smith was talking about when he was in opposition. On the longer-term stuff, the jury is more out at this stage, because we do not have all the details. On the shorter-term measures, we have independent opinion that says that, overall, they are regressive. Therefore, on that early assessment, there is perhaps a bit of a gulf between some of the rhetoric before the election and the action after it.
Those would be issues for Iain Duncan Smith to defend himself on if he was before the committee. I am not here to speak for him. I do not doubt his sincerity in wanting to tackle the issues, but we have to assess measures based on whether we think that they are likely to do so.
Given the report on this issue that the committee produced, I do not think that we could finish this morning’s evidence session without mentioning child care. Last week the Scottish Government published the report, “Early Years Framework: Progress So Far”. Within that, there seemed to be a suggestion that the progress that you had expected on child care had not been made. If you have had time to think about this, can you tell us whether particular obstacles have been identified and what the Scottish Government intends to do about them?
I will bring in Jim Stephen in a second as he works particularly in this area. It is fair to say that Adam Ingram, who is the minister responsible, is looking at a range of options for accelerating progress on child care. We have had some considerable successes, such as in increasing the number of child-care hours available, which was one of the commitments that the Government made. This is not an excuse—I am not trying to pass the buck—but a lot of how access to child care is funded through the tax credits system is reserved. That is a frustration for us in relation to what we are able to do.
The general economic climate and public spending climate have been barriers to progress. However, we have made progress and the question now is how we accelerate it. That is the question that Adam Ingram and colleagues are looking at. Access to affordable, good-quality child care is fundamental to the employability agenda.
Some of the benefit changes—whether we agree with them or not—will have an impact on demand for child care, particularly the changes around mothers’ move from income support to jobseekers allowance after their child reaches the age of 5. Those will all have impacts on the demand for child care, so it is the right time to look at what more we need to do to up the pace of change.
Jim Stephen (Scottish Government Directorate for Children and Families)
Child care is very much a live issue for us. We had a meeting recently with leaders from the voluntary sector, the private sector, the public sector and the child care sector, and Jobcentre Plus. A consensus came out of that meeting that, in general, the balance of supply and demand in child care is roughly okay. Parenting across Scotland did a survey that suggested that most parents who are within the child care system are generally content with the service that they get. The other issue on which there is consensus—this is the big issue for us—is that it is the people who are off the radar and will be affected worst by benefit changes who will be pushed into work. Building trust and relationships with such families is the big issue that we need to tackle in child care. We have ideas around social enterprise models and are looking at ways in which we could empower communities to develop their own solutions to child care issues.
Cabinet secretary, you referred to the Institute for Fiscal Studies. I am certainly grateful to the IFS for its work on benefit changes in relation to child poverty. What is your view on the IFS forecast that indicates that the policies of the current coalition Administration in Westminster for 2013-14 mean that we may end up in 2020-21 with 20.9 per cent in absolute poverty and 20.5 per cent in relative poverty, given that we are talking about reducing the figures in those areas? What is the prospect if those predictions turn out to be true?
That probably takes us back to where we started with your first question. The IFS projections suggest that, in its opinion, the numbers of children in relative poverty across the UK will fall by about 300,000 between 2008-9 and 2010-11 and will increase by around 100,000 between 2010-11 and 2012-13 and by around 200,000 between 2012-13 and 2013-14. That brings into sharp focus the scale of the challenge that I spoke about in answer to your first question about whether the targets were achievable. The current policy regime at UK level around the issues that we have been discussing does not make the challenge easier.
What does that say for us as the Scottish Government? First, we need to do everything that we can, limited though that may be, to influence policy decisions at the UK level and we need to ensure that we are doing absolutely everything within the powers that we have. Secondly, at a Scottish level we must—to use Patricia Ferguson’s terminology—skew our policies to mitigate those effects as much as possible. I would say that there is a third necessity. I am following Bob Doris’s consensual approach, so I will not labour this point. However, the third necessity is to argue for our having the powers that would give us more levers over the issues that will have the biggest impact on child poverty.
The scale of the challenge is evident and I do not think that any of us would deny for a second that it is a big challenge. Is it one that we should be absolutely committed to meeting? Absolutely. It is not acceptable morally, practically or in any sense that, in a country as rich as ours, so many kids live in poverty. While that is the case, all of us should be prepared to do everything that we can to reverse it.
I thank the cabinet secretary and her officials for their attendance and the evidence that they have provided. I suspend the meeting until the next panel of witnesses is in place.
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Meeting suspended.
11:11
On resuming—