House of Commons - Scottish Affairs

Select Committee on Scottish Affairs Third Report

3 Work

32. Getting people into work is a major focus of the Government's poverty policy. As we recognised in our previous Report on poverty, "The rise in employment levels over the past ten years has played an important part in reducing poverty. The New Deal, the minimum wage and an increase in in-work support through working tax credits and child tax credit were key measures in delivering this reduction".[39]

33. Rt Hon Jane Kennedy MP told us that work was an equally effective way to reduce child poverty:

…our efforts have been very carefully focused on looking at what are the key factors that make the difference for families, particularly families with children, and what are the key factors that lift families out of poverty. All the research tells us that work is the significant factor that makes that difference, so a huge amount of the work that we have been doing has been focused upon enabling people to work.[40]

And Caroline Flint MP argued that work could have social as well as financial benefits:

…what they have got with that is pay and actually it is important that people are seen to be better off in work, even in the lowest paid jobs. Also what they have got as well is more confidence back about being in control of their own lives. All the evidence suggests to us that actually things around health, confidence, even children's attainment in school are benefited by having someone in the household in work.[41]

34. In our previous Report, we examined the Government's focus on work as the primary means of lifting people out of poverty and concluded that it had been responsible for a significant reduction in the number of people in poverty over the last ten years. We were concerned, however, that many of the jobs were poorly paid and did not offer decent prospects of advancement for those seeking a genuine career path and a sustainable route out of poverty. In this Report, we consider how the Government's focus on work has affected families and the particular barriers faced by parents wishing to enter the workplace.

Making work pay

35. Child poverty can, in part, be addressed by the same policies as general poverty. By maximising the earnings of parents and reducing worklessness, children can be lifted out of poverty through an increase in family income. As we concluded in our previous Report on Poverty in Scotland, although positive steps that have been taken to make work pay for many, in-work poverty is still a real prospect for some. Despite the introduction of the national minimum wage and tax credits, many poor children live in households where at least one adult is employed. Evidence from the Child Poverty Action Group Scotland stated that "Nearly a quarter of children living in poverty are in households where an adult is working full time".[42]

36. We found that particular difficulties were experienced by families who moved in and out of employment, enduring a 'low pay, no pay' cycle, with associated transitional costs. Ms Sue Middleton, Research Director at the Centre for Research in Social Policy, Loughborough University, and Adviser to the Joseph Rowntree Foundation Poverty and Disadvantage Committee described the effect this had on children:

…the children who experience the worst forms of poverty are not those whose parents sit on benefits year in year out, they are the children who are in families whose parents seek to get out of work but move between work and no work. That seems to propel those families into a much more severe sort of poverty; so we need to be looking at a flexible benefit system. Whilst there has been lots of progress made on shooting people into work from benefits, there has not been as much attention given to, shall we say, the parachutes to protect people as they fall out of work, bearing in mind that most people actually do get back into work.[43]

37. A significant proportion of those children living in poverty come from households where at least one parent is working. In order to continue to reduce child poverty, the problems of low pay, job retention and career advancement must be tackled. We refer the Government to the findings of our previous Report, Poverty in Scotland, on these issues. As we stated in that Report, "the tax and benefits system must, at a minimum, ensure that no-one in full time work is living in poverty".[44]

38. Our last Report found that in general, policy on poverty was not 'joined-up' either nationally or with the devolved administration in Scotland and Scottish local authorities. We recommended that the Government needed to do more to ensure that policies did not conflict with each other and to establish rigorous 'poverty proofing' across the board. The effects of this lack of coherence can be seen in the child poverty statistics. The Scottish Low Pay Unit told us that "The extra income generated by work is quickly negated by […] 'hidden costs' and drop-off in benefit entitlement that results in the extra expense of council tax, rent, prescription charges and school meals."[45] The high transitional costs experienced by parents entering the workplace, as well as the loss of key benefits, undermines the Government's efforts to raise incomes through making work pay. There is a need for the Government to introduce a simplified benefits system that allows an individual to move from unemployment to work without losing income.

Barriers to employment

39. Even where there is a real prospect of increasing family income through work, parents may be prevented from taking a job due to inadequate childcare, lack of provision for disabilities or adverse employer attitudes. Evidence from the Child Poverty Action Group Scotland indicated that "there are dangers in over-focussing on work as the solution to child poverty […] low pay (combined with job insecurity, lack of flexibility for working parents and sparse in-work support for those with disability or long term illness) continues to undermine work as a route out of poverty".[46]

40. The Government has acknowledged that "childcare is by far the biggest barrier to improving parents' employability".[47] Working parents in receipt of Working Tax Credit can claim support with the cost of registered childcare, but even where childcare is affordable, our evidence suggests that there are significant problems with a lack of local provision (particularly in rural areas), opening hours that do not match the working day and insufficient places in affordable nurseries.[48] Support for childcare would also be of benefit to parents who are not in work, but wish to improve their employability. As evidence from One Plus argued, "Childcare should also be available for lone parents who wish to take up training or continue their education before returning to work."[49]

41. Our witnesses said that the inability to secure suitable childcare was a significant barrier to entering employment. Evidence submitted by Oxfam stated that "The lack of affordable, accessible childcare, even with the advent of tax credits, still remains one of the principal barriers faced by women to accessing and sustaining employment."[50] Mr John Dickie, Head of the Child Poverty Action Group Scotland, agreed:

For far too many parents in far too many parts of the country childcare is still unaffordable and inaccessible, particularly in some of the most disadvantaged areas and particularly in terms of being accessible to the most disadvantaged families. The current system, despite investment in childcare tax credit, in Sure Start, in Working for Families in Scotland, is still far too patchy a system for the supply of childcare and that is going to be a critical thing that needs to be got right if parents are going to overcome that barrier to employment.[51]

42. Barriers to entering the workplace may also be associated with disability, both for adults with disabilities and for parents of disabled children. The Equalities Co-ordinating Group told us that Scottish households with one or more disabled people are twice as likely to live in poverty than those with no disabled people.[52] Evidence from Capability Scotland suggested that "families with disabled children are among the poorest in Scottish society. Our research, conducted through the unique 1 in 4 poll, shows that social injustice impacts on families living with disability in many ways. They experience poverty of income, poverty of choice and poverty of opportunity."[53] The Scottish Executive should do more to ensure that resources reach disabled families, who are disproportionately affected by poverty.

43. Parents of disabled children may face an even greater struggle to secure appropriate childcare in their locality, preventing them from entering the workplace. We were told that the unemployment rate amongst mothers of a disabled child runs at 80%.[54] Capability Scotland described the problem as primarily one of childcare:

Many parents do not have the choice of work available to them because of a lack of suitable, affordable childcare. The 1 in 4 poll found that nearly 70% of working parents with a disabled child relied on family members to care for their disabled child and half of them said they did so because of a lack of suitable or affordable childcare. Having a disabled child means that the decision about whether or not to go back to work is very complicated. Mainstream childcare provision is often unable to accommodate disabled children: inaccessible premises, a lack of trained staff and cost combine to mean that parents of a disabled child rely on informal childcare. This in itself minimizes the financial appeal of working as they are then unable to access childcare tax credits. The cost of suitable childcare can also be prohibitive.[55]

44. We asked Ministers what was being done to help families overcome these barriers. Caroline Flint MP said:

…we have introduced other measures to support families where we have made it a legal right to request flexible time if your child is under six and, if you have a disabled child, up to 18, and you are looking after an adult who is dependent. We are also now looking to consult on extending that right to flexible working for parents of older children which I am pleased we are discussing. There is a whole load of factors here that are about pay but also about the support you give to manage that work/life balance to enable people to be in work.[56]

45. The Government has succeeded in increasing the incomes of many working parents through the minimum wage and tax credits, but it must now recognise that future progress will depend not only on financial rewards, but also on removing the current barriers to entering work. In order to continue to reduce child poverty, the Government's focus on getting people into work needs to be responsive to the needs of families. Access to affordable and suitable childcare is key, both for working parents and for those who wish to undertake training to improve their skills and employability. Parents of disabled children face a significant challenge in accessing suitable childcare and support for these families should be reviewed as a priority. We are aware of successful local childcare projects, but the Committee believes that more needs to be done to support these groups.

46. Even if the Government does tackle these barriers, some parents will remain out of work, either because it is impossible to combine the extent of their caring responsibilities with the demands of a job, or because they choose to devote themselves to raising a family full-time. Evidence submitted by One Plus cautions that the focus on work should not devalue the choice to be a full-time parent:

While many [lone parents] combine paid and unpaid work, the alternative of specialising in the unpaid work of caring for children and others should be a viable and valued option. Any vision for the future should provide genuine choice to parents as to whether to stay at home with their children or take up employment with the guarantee of affordable high quality childcare.[57]

47. The Government has focused on work as a route out of poverty. We welcome the recent increases in employment for those seeking work. However, Ministers must be cautious in suggesting that all parents are now expected to enter paid work. The contribution to society made by full-time carers must not be undervalued.

Action in Scotland

48. The Scottish Executive currently shares the UK Government's target to eradicate child poverty by 2020. Although some of the main levers for the reduction of poverty, such as the tax and benefits system, are reserved powers, many services aimed at increasing employment are delivered locally through the Scottish Executive and local authorities in Scotland. The Scottish Executive has responsibility for Sure Start Scotland, which provides support for families with very young children, focusing on deprived communities and vulnerable families. It also runs the Working for Families (WFF) programme, aimed at improving employability by tackling family and household disadvantage and exclusion. Money is allocated to local authorities based on the numbers of children in households dependent on key benefits. WFF has been given funding of £50 million between 2004-2008.[58]

49. As noted earlier in this Report, Scotland has performed better than the UK average in reducing child poverty. Witnesses suggested that this was due to the combination of UK-wide policy with effectively targeted local support for parents wishing to enter employment. Caroline Flint MP said "that combination of those overarching UK-wide policies, along with initiatives at a more local level, which I think the Scottish Executive has contributed to in the last five years, has been helpful".[59] Mr Neil Langhorn, Head of the Antipoverty Strategy Team in the Social Inclusion Division at the Scottish Executive agreed:

As to why we have been more successful at getting people into work, I think it is partly a case of both our efforts, the efforts of Jobcentre Plus have combined well with things like Working for Families and other Scottish Executive support programmes around employability. Essentially, it is partly a case of where we started from, we started from a worse position, therefore more families were eligible, but we have also been better at getting people into work."[60]

50. The role of local government in providing key services such as education and childcare and in co-ordinating the efforts of different bodies and agencies is clearly of great importance. Mr Jim McCrossan, Community Learning and Regeneration Manager at Argyll and Bute Council emphasised the benefits of a holistic approach:

What we find, though, that has worked, and this has been a theme through the session today, is partnership, working between agencies with child poverty or issues which are more directly concerned with literacy and numeracy. There is rarely one problem operating in isolation, so that is often the key to taking a more holistic approach.[61]

51. In the course the inquiry we also heard of other efforts to spread good practice and to work co-operatively with counterparts. Mr Mike Palmer, of the Social Inclusion Division of the Scottish Executive, described the work of the British-Irish Council in this area:

For example, through the British-Irish Council, Scotland joint leads on the social inclusion strand of that. We are actually looking in the British-Irish Council at the moment at child poverty. I jointly chair the official level group of the British-Irish Council on that strand. Each time we meet, which is about three or four times a year, we look at various things that are going on across not only the UK administrations, but also Southern Ireland and the smaller islands in the British Isles,[62]

52. During our inquiry, there was a change in administration at the Scottish Executive. We asked witnesses from the UK Government and the Scottish Executive whether this would affect working relationships. They said that efforts to tackle child poverty in Scotland would not be adversely affected by political differences. Mr Stewart Maxwell MSP, Minister for Communities and Sport at the Scottish Executive said, "we work as closely as we can with the UK Government because there is a determination to try and tackle child poverty and poverty in general. That is something which both of us surely can work together on".[63]

53. Our previous Report on Poverty in Scotland concluded that the best way of tackling poverty was through a joined up approach, integrating services provided by the UK Government, the Scottish Executive and local authorities. Although there is clearly more to be done, we are pleased that co-operation between these bodies appears to have helped to reduce child poverty in Scotland. Tackling child poverty requires combined effort and a genuine political will. We hope that the historically close collaboration between the UK Government and the Scottish Executive in this area will continue.

39 HC 128-I (2007-08), p 15 Back

40 Q 868 Back

41 Q 894 Back

42 Ev 155 Back

43 Q 352 Back

44 HC 128-I (2007-08), p 18 Back

45 Ev 75 Back

46 Ev 154 Back

47 Ev 282 Back

48 Ev 335 [Equal Opportunities Commission] and Ev 363 [One plus] Back

49 Ev 366 Back

50 Ev 344 Back