Scottish child poverty targets; progress is being made but more investment is needed
24 March 2025New research published today [24th March] by Fraser of Allander Institute finds that meeting the Scottish Government’s targets for reducing child poverty will require additional investment, but targeted interventions to help the poorest families could make a significant difference.
The Scottish Government is due to publish details of its progress on reducing child poverty on 27th March 2025, indicating whether interim child poverty targets have been met. The interim targets are for fewer than 18% of children to be in relative poverty in financial year 2023/24. Expectations are that the interim targets are unlikely to be met. If no changes are made to the current set of tax and benefit policies (including mitigation of the two-child limit), the research finds that relative child poverty in 2030-31 would be around 20%, short of the target of 10%.
Today’s research, funded by abrdn Financial Fairness Trust, examined some of the levers available to the Scottish Government to reduce child poverty, such as increasing the Scottish Child Payment (SCP)*, supporting parents into work and helping them to increase their hours of work and pay. A multi-level approach is necessary to meet child poverty reduction targets:
• Mitigation of the two-child limit is a welcome announcement, and is expected to reduce child poverty in 2030/31 by 1 percentage point.
• Policies that would increase parental employment and pay could reduce child poverty by a further 2.8 percentage points, but increases to hours for working parents have a minimal impact – largely because many parents already work full-time.
The estimated remaining 7 percentage point reduction in poverty needed to meet the 2030/31 child poverty targets poses a significant challenge. Researchers found that, in addition to other policies modelled, increasing SCP to £150 per week per child for all recipients, or to £115 (weekly) per child in receipt of SCP plus a per-household premium of £50 for some priority households, would be necessary to meet the relative poverty target of less than 10% by 2030/31.
The cumulative cost of these combined policies is between £4.6 and £4.9 billion in current prices. This is a substantial investment, equivalent to about 75-80% of the budget for devolved benefits in Scotland this year (although about 60% of this is childcare costs to allow parents to work).
Until now, the Scottish Government has relied on universal measures (apart from the SCP) to lift children out of poverty. The researchers suggest prioritizing some households could be a more cost-effective of reaching the child poverty targets. For example, adding a per-household premium of £50 on to Scottish Child Payment for certain priority households, in conjunction with parental employment policies, would reduce child poverty by 1.3 percentage points at a cost of about £294 million in 2030/31.
The options researchers have modelled are not the only path to meeting the child poverty reduction targets, and there are potentially other options that could cumulatively make a big difference – for instance, a Minimum Income Guarantee, additional rent and housing policies, or further measures to increase benefit take-up. However, the timeframe for interventions to take effect is relatively short, which limits the range of options now available to the Scottish Government if they are to meet the targets.
Hannah Randolph, Knowledge Exchange Fellow at the Fraser of Allander Institute, said:
“This research highlights a range of potential policies that could make progress towards the child poverty targets, as well as the size of investment needed. While mitigation of the two-child limit is a welcome announcement, it is far from enough. Given the scale of the challenge, and regardless of which policies they choose, it’s important that Scottish Government show how they will meet the child poverty targets in the final delivery plan next year.”
Judith Mabelis, Research Manager at abrdn Financial Fairness Trust, said:
“It is admirable that the Scottish Government has set a child poverty reduction target. It is the right thing to do to and shows they are serious about tackling poverty. However, this research shows that tackling poverty is much harder than setting targets; Government needs to be realistic about what can be done to meet those targets and focus their support with targeted interventions. This research highlights some of the policy choices the Scottish Government can make to tackle child poverty.”
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The Scottish Government is due to publish details of its progress on reducing child poverty on 27th March 2025, indicating whether interim child poverty targets have been met. The interim targets are for fewer than 18% of children to be in relative poverty in financial year 2023/24. Expectations are that the interim targets are unlikely to be met. If no changes are made to the current set of tax and benefit policies (including mitigation of the two-child limit), the research finds that relative child poverty in 2030-31 would be around 20%, short of the target of 10%.
Today’s research, funded by abrdn Financial Fairness Trust, examined some of the levers available to the Scottish Government to reduce child poverty, such as increasing the Scottish Child Payment (SCP)*, supporting parents into work and helping them to increase their hours of work and pay. A multi-level approach is necessary to meet child poverty reduction targets:
• Mitigation of the two-child limit is a welcome announcement, and is expected to reduce child poverty in 2030/31 by 1 percentage point.
• Policies that would increase parental employment and pay could reduce child poverty by a further 2.8 percentage points, but increases to hours for working parents have a minimal impact – largely because many parents already work full-time.
The estimated remaining 7 percentage point reduction in poverty needed to meet the 2030/31 child poverty targets poses a significant challenge. Researchers found that, in addition to other policies modelled, increasing SCP to £150 per week per child for all recipients, or to £115 (weekly) per child in receipt of SCP plus a per-household premium of £50 for some priority households, would be necessary to meet the relative poverty target of less than 10% by 2030/31.
The cumulative cost of these combined policies is between £4.6 and £4.9 billion in current prices. This is a substantial investment, equivalent to about 75-80% of the budget for devolved benefits in Scotland this year (although about 60% of this is childcare costs to allow parents to work).
Until now, the Scottish Government has relied on universal measures (apart from the SCP) to lift children out of poverty. The researchers suggest prioritizing some households could be a more cost-effective of reaching the child poverty targets. For example, adding a per-household premium of £50 on to Scottish Child Payment for certain priority households, in conjunction with parental employment policies, would reduce child poverty by 1.3 percentage points at a cost of about £294 million in 2030/31.
The options researchers have modelled are not the only path to meeting the child poverty reduction targets, and there are potentially other options that could cumulatively make a big difference – for instance, a Minimum Income Guarantee, additional rent and housing policies, or further measures to increase benefit take-up. However, the timeframe for interventions to take effect is relatively short, which limits the range of options now available to the Scottish Government if they are to meet the targets.
Hannah Randolph, Knowledge Exchange Fellow at the Fraser of Allander Institute, said:
“This research highlights a range of potential policies that could make progress towards the child poverty targets, as well as the size of investment needed. While mitigation of the two-child limit is a welcome announcement, it is far from enough. Given the scale of the challenge, and regardless of which policies they choose, it’s important that Scottish Government show how they will meet the child poverty targets in the final delivery plan next year.”
Judith Mabelis, Research Manager at abrdn Financial Fairness Trust, said:
“It is admirable that the Scottish Government has set a child poverty reduction target. It is the right thing to do to and shows they are serious about tackling poverty. However, this research shows that tackling poverty is much harder than setting targets; Government needs to be realistic about what can be done to meet those targets and focus their support with targeted interventions. This research highlights some of the policy choices the Scottish Government can make to tackle child poverty.”
Read full report