Conclusions and recommendations
1. We
recommend that the Government should review its preferred measure
of poverty (currently set at those with household incomes below
60% of the median). The poverty line should represent a minimum
adequate income. If necessary, further independent research should
be commissioned to determine a realistic minimum income standard.
(Paragraph 15)
2. Our evidence suggests,
and we agree, that in many cases, measures of poverty taken after
housing costs present a much more accurate picture of disposable
income and hence of a household's living conditions. We therefore
recommend that the Government should continue to publish both
BHC and AHC measures of poverty, but that it should prioritise
AHC measures in most cases. (Paragraph 18)
3. Although the SIMD
only influences a small amount of funding, there is a perception
within some rural areas of Scotland that reliance on the SIMD
does not properly capture the extent of poverty in rural areas.
There is a clear need for improved measures of poverty in rural
areas of Scotland in order accurately to assess the extent of
poverty in these areas. (Paragraph 21)
4. We recognise that
progress has been made in reducing poverty, particularly amongst
groups such as children and pensioners, which have been the subject
of high profile Government targets. This is to be welcomed. We
are concerned, however, that the benefits of Government measures
should be felt by all those living below the poverty line, including
adults of working age. The evidence we have received suggesting
that many working age adults alternate between poverty and low
incomes is particularly worrying in this regard, and suggests
that sustainable routes out of poverty have not been made available
to all. (Paragraph 27)
5. Co-ordination with
the Scottish Executive is needed to ensure that national policies
are delivered effectively and 'join up' with devolved programmes.
The Scotland Office has a key role in this process. Conversely,
the Scottish Executive needs to ensure that its own programmes
dovetail with national provision. (Paragraph 28)
6. We recommend that
the Government should consider whether greater flexibility could
be given to local government in the provision of services aimed
at reducing poverty. Whilst there are serious issues in providing
different services to UK citizens living in adjacent areas, local
authorities that have achieved good results in this area should
be rewarded. We are particularly concerned by perceptions that
the relationship between Scottish local government, the UK Government
and Members of the UK Parliament has weakened since devolution.
We urge all sides to work together to renew links. (Paragraph
38)
7. It is essential
that the UK Government should produce a national poverty strategy
to co-ordinate the cross-cutting issues inherent in issues of
multiple deprivation. (Paragraph 40)
8. We commend the
Get Heard project and urge the Government to ensure that all policy
on poverty is informed by the views of those living on low incomes.
(Paragraph 41)
9. We welcome the
increase in employment levels over the past ten years, which has
greatly contributed to a reduction in poverty. However, unless
barriers such as disability, employer attitudes to disability
and unaffordable childcare are tackled, employment levels cannot
continue to rise at the same rate. Even then, work will never
be a realistic prospect for some people, for example, those with
full-time carer responsibilities. These people must be lifted
out of poverty through the benefits system. (Paragraph 48)
10. The tax and benefits
system must, at a minimum, ensure that no-one in full time work
is living in poverty. (Paragraph 55)
11. The Government
needs to make enforcement of the minimum wage a priority and institute
stronger penalties for non-compliance. (Paragraph 56)
12. We urge the Government
to investigate the problem of low wages amongst public sector
employers and to consider a means by which an incentive could
be created for these employers to raise wages. (Paragraph 59)
13. We are led to
conclude that despite the introduction of the minimum wage and
tax credits, work is not an automatic route out of poverty. Where
work is of poor quality, low paid, short-term or seasonal, in-work
poverty is a real prospect. (Paragraph 60)
14. Low paying, poor
quality jobs are part of a bigger problem which will require effort
not only on the part of the Government, but also of the public
sector more generally as well as private employers. In order to
ensure that sustainable routes out of poverty are provided, the
focus on employability needs to include support for retention
and advancement. (Paragraph 61)
15. We recommend that
the discrimination against young workers inherent in the current
structure of the minimum wage should end. We are particularly
concerned that young adults on work-based training courses should
be able to support themselves at a decent level. We agree with
the Minister that "Apprenticeships are not meant to be just
a source of cheap labour for people" and we urge the Government
to ensure that the guidelines surrounding pay and conditions for
trainees are properly enforced. (Paragraph 63)
16. We welcome efforts
to integrate different benefits streams into a 'one-stop-shop'.
However, the Government must provide enough resources to ensure
that any new system is properly administered. (Paragraph 74)
17. The simplification
of the benefits system is a vital area of work if take-up of entitlements
is to be increased. We refer the Government to the recent excellent
contribution of the Work and Pensions Committee in this area.
Given the current complexity of the benefits system, the Government
has a responsibility to invest in welfare rights advisers and
campaigns to promote the take-up of benefits generally. (Paragraph
75)
18. In addition to
plans for an online system, frontline employees in a range of
services should be equipped with a basic knowledge of the tax
credits and benefits system so that they can assess whether a
household is claiming its full entitlement and give advice on
where to go for further information. Where convenient, greater
use could be made of co-location so that benefits checks are part
of a local 'one stop shop'. (Paragraph 76)
19. In the areas of
welfare advice and co-location of services there is clear benefit
to be gained by working with local authorities. (Paragraph 77)
20. We urge the Government
to consider establishing a transitional benefit aimed at alleviating
the costs of entering employment. (Paragraph 81)
21. The Government
now needs to ensure that everyone living in poverty really would
be financially better off in work. Without this approach, the
reduction in poverty over the last ten years will not be sustained
in the next decade. (Paragraph 82)
22. We urge the UK
Government, the Scottish Executive and local authorities to consider
ways in which the high costs of transport in rural areas can be
alleviated. (Paragraph 87)
23. In this Report,
we have highlighted the importance of co-ordinating initiatives
in different administrations and policy areas in order to reduce
unnecessary duplication and to ensure that policies are 'poverty
proofed' across the board. This is doubly important for rural
communities, where accessibility is key and a range of welfare
advice must be made available from a single point of contact.
(Paragraph 94)
24. We conclude that
rural poverty presents its own challenges, which will not be solved
by an approach tailored to the small pockets of deprivation characteristic
of urban poverty. It is vital that the Government's anti-poverty
policies are subject to 'rural proofing'. Witnesses have suggested
that the establishment of a Commission for Rural Scotland might
be a way to give rural communities a stronger, unified voice and
we hope that the Government and the Scottish Executive will consider
this proposal. Greater investment in outreach is needed to ensure
that geographically dispersed communities have equal access to
services. (Paragraph 96)
25. The Government
should review its eligibility criteria for benefits aimed at alleviating
fuel poverty. In particular, both Winter Fuel Payments and Cold
Weather Payments could be extended to those in receipt of disability-related
benefits. As part of this review, consideration should be given
to establishing a form of regional weighting that would recognise
the increased burden in fuel costs to colder parts of the UK.
(Paragraph 105)
26. We cannot understand
why the take-up of Fuel Direct should have fallen at the same
time that fuel debt is rising. We urge the Government to look
into the cause of this fall as a priority. (Paragraph 112)
27. The reduction
of fuel poverty is an area in which greater co-operation and co-ordination
between the UK Government, the Scottish Executive, energy companies
and Ofgem is required. (Paragraph 119)
28. We are concerned
that the UK Government, the Scottish Executive and local authorities
should co-ordinate their efforts, particularly in the area of
illegal money lending. (Paragraph 123)
29. We believe that
there is a case for Courts to be empowered to impose an interest
rate cap in order to prevent severe poverty or destitution. (Paragraph
128)
30. We endorse the
recent recommendation of the Work and Pensions Select Committee
that the Government should look in more detail at the potential
for increasing the eligibility for the Social Fund. We believe
that the Social Fund should be reformed and expanded through an
increase in resources. A more extended service of affordable credit
to those in most need could offer a real alternative to high cost
credit. (Paragraph 136)
31. Our evidence leads
us to conclude that more action on irresponsible lending is necessary.
Lenders must be obliged to offer credit responsibly and above
all transparently. This is not the only solution. Once again,
in order to tackle the problem of debt, a coherent strategy must
be implemented across a range of policy areas, from the regulation
of credit agencies to better education in financial literacy.
Co-ordinated action will be needed on the part of the UK Government,
the Scottish Executive and local authorities to ensure this takes
place. (Paragraph 142)
32. Our inquiry has
confirmed that a welcome reduction in poverty has taken place
over the past ten years, particularly amongst vulnerable groups
such as pensioners and children. This reduction must continue
over the next decade. In order for this to happen, the Government
needs to make a concerted effort to present a coherent anti-poverty
strategy across all policy areas, joining up across government
departments as well as with the work of the Scottish Executive
and of local government in Scotland. On present evidence, we do
not believe that the Government is doing enough to 'poverty-proof'
all of its policies and to exploit the available opportunities
to integrate services. (Paragraph 143)
33. This inquiry has
highlighted a number of issues that are of particular concern.
The Government's focus on work and the national minimum wage as
routes out of poverty has been responsible for a substantial part
of the reduction in poverty that has been achieved so far. The
Government cannot rely on economic growth alone to reduce the
inequalities in society. Those that remain out of work face considerable
barriers in the form of inadequate childcare, geographical isolation,
employer attitudes or provision for disabilities. A considerable
amount of work will be needed to remove these obstacles and we
are not confident that the Government appreciates the scale of
the task it faces. (Paragraph 144)
34. Our evidence also
suggests that some of those who have entered work in recent years
have taken on low paid jobs with few prospects of advancement.
Those in seasonal employment can hover around the poverty line
in a 'no pay, low pay' cycle. Sustainable routes out of poverty
can be provided by genuine career paths which, although they may
start on relatively low pay, offer the chance of progression.
The introduction of the minimum wage has made a significant contribution
to reducing poverty. The setting of an appropriate rate needs
further investigation, but in principle, pay should be fixed at
a level so that no-one in full time work is living in poverty.
The relatively poor progress that has been made on reducing poverty
amongst single adults of working age is evidence of the problems
in this area. (Paragraph 145)
35. Rural poverty,
fuel poverty and debt have been particular focal points for this
inquiry. Each of these areas raises distinctive issues, discussed
in detail above. We are concerned that, despite good intentions,
there is a lack of integration and too much complexity in these
areas. The Government could do more to integrate different policy
streams and to work co-operatively with stakeholders, including
local authorities, with whom relationships appear to have weakened,
and the Scottish Executive. (Paragraph 146)
36. The fight against
poverty has not yet been won. Recent progress in reducing poverty
must continue over the next decade. More resources and an even
greater effort will be needed to reach those groups that have
not yet benefited from the economic growth enjoyed by the UK as
a whole. (Paragraph 147)
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