Conclusions and recommendations
1. We
are concerned by the recent apparent slowdown in the reduction
of child poverty in the UK but are pleased to note that Scotland
is doing better at reducing child poverty than the UK as a whole.
The Government should analyse the reasons for this relatively
good performance so that successful strategies can be identified
and deployed more widely. (Paragraph 13)
2. Poverty runs in
families. If levels of child poverty can be reduced, there is
an opportunity to break the cycle of generational poverty. We
therefore welcome the Government's focus on the reduction of child
poverty. The success or failure of policies in this area will
affect not only those currently living in poverty, but generations
to come. (Paragraph 17)
3. Action to tackle
child poverty necessarily targets parents, attempting to lift
children out of poverty by raising family incomes. This action
would be more effective if the position of young single adults—the
parents of tomorrow—were also improved. As we noted in our
previous Report, very poor progress has been made in reducing
poverty amongst this group. The strategies we recommended in that
Report, namely, the provision of a decent minimum income level
as well as stable career paths enabling progression, should not
be seen in isolation from the problem of child poverty. The Government
also needs to work to increase the take-up of benefits and tax
credits entitlements. Maximising the incomes of young adults will
have a preventative effect on child poverty that is sustainable
for years to come. (Paragraph 23)
4. We are concerned
by the evidence we have received that those children living in
the severest poverty in Scotland may not have fully benefited
from the recent reductions in child poverty rates. The poorest
children are not helped if the Government meets its targets only
by reaching those just below the poverty line—a strategy
that also endangers the Government's longer term targets for the
total eradication of child poverty. (Paragraph 30)
5. The Government
needs to do more to assess what progress has been made in raising
the incomes of the poorest families. The current child poverty
targets are based on a single poverty line of 60% of median income.
This is not sensitive to variations in standards of living that
fall below this line and we therefore recommend that additional
research should be undertaken to assess the standard of living
of the poorest children. (Paragraph 31)
6. 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". (Paragraph 37)
7. 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. (Paragraph 38)
8. The Scottish Executive
should do more to ensure that resources reach disabled families,
who are disproportionately affected by poverty. (Paragraph 42)
9. 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. (Paragraph
45)
10. 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. (Paragraph 47)
11. 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. (Paragraph
53)
12. Child Tax Credits
have been a key factor in reducing levels of child poverty, but
given the complexity of the tax credit system, we are concerned
that the Government should do its utmost to ensure that families
are aware of their entitlements and that they can access the full
range of support that is available. Even if the take-up of tax
credits improves, significantly more resources will be needed
in order to reach the 2010 target of lifting half of children
out of poverty from the 1997 baseline. (Paragraph 62)
13. The Government
needs to keep the balance of its targeted programmes of support
under review. It is possible that, once some groups have been
helped out of poverty, others may be left behind. The tax and
benefits system must be flexible enough to respond to these changing
needs. (Paragraph 65)
14. The UK welfare
system today is a mixture of universal and targeted programmes,
embodied in the different forms of support provided by Child Benefit
and tax credits. Our inquiry has found evidence that children
in the poorest families may not be reached by some of the current
government policies, which focus on means-tested benefits and
employment. In this context, increases in Child Benefit, which
has a high take-up and is universally available, seem attractive.
It is undeniable, however, that increases in Child Benefit would
also go to rich families. The Government needs to consider carefully
whether there is a way to reach the poorest families through a
targeted benefit, or if universal support is the only reliable
method of raising incomes amongst this group. (Paragraph 70)
15. Children in larger
families are at greater risk of poverty. Our evidence suggests
that equalising the rate of Child Benefit would help many of the
poorest families. We are attracted to this idea but consider that
further research is needed to establish whether this is the most
practical way of reducing poverty in large families. (Paragraph
74)
16. We have had representations
to consider seriously the option of establishing a twice-yearly
seasonal grant for families in receipt of Income Support, Jobseeker's
Allowance or the maximum Working Tax Credit. Throughout this Report
we have emphasised the importance of simplifying the benefits
system. We are concerned that establishing a new seasonal grant
might increase the bureaucracy involved. We do believe that resources
should be devoted to helping low income families to cope with
large items of one-off expenditure which might otherwise push
them into poverty. It might be possible to achieve this by allocating
additional resources to the Social Fund, as recommended in our
previous Report. (Paragraph 76)
17. Our evidence indicates
that those young people who stand to gain the most from training
courses experience the greatest difficulties in securing access
and financial support. The generational cycle of poverty will
not be broken unless the Government ensures that young adults
are supported to gain the skills necessary for a life free from
poverty. Age-based discrimination in the tax and benefits system
undermines progress in this area and we therefore recommend that
it should end. (Paragraph 80)
18. We welcome the
progress that has been made in reducing child poverty since 1997,
which has been achieved as a result of unprecedented levels of
investment and a strong political will that now appears to be
shared by all. Poverty is often passed from generation to generation.
The reduction of child poverty therefore offers the opportunity
to break the cycle of deprivation. Nonetheless, the levels of
child poverty in Scotland are still high by international standards
and there is some evidence to suggest that progress is slowing
down. In order to reach the target of halving child poverty by
2010, the Government will need to match, if not surpass the level
of resources and of commitment of the past decade. (Paragraph
81)
19. We recommend that
the targeted nature of welfare support should be reviewed to ensure
that help is reaching those most in need. Throughout this Report,
we have emphasised the importance of a simplified tax and benefits
system. (Paragraph 82)
20. Child poverty
can be tackled through many of the same strategies as poverty
in general. By maximising the incomes of parents (and parents-to-be),
children will no longer be born into poverty. Our previous Report
on Poverty in Scotland emphasised the need for an integrated strategy,
working co-operatively with the Scottish Executive and local authorities.
There is evidence to suggest that this approach has led to a relatively
greater reduction in child poverty in Scotland, compared to the
UK as a whole. However, inconsistencies and administrative complexities
remain in some areas of the welfare system. These need to be removed
if further progress is to be made. (Paragraph 83)
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