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Our next item of business is an evidence session on the recently published UK child poverty strategy, “Our Children, Our Future—Tackling Child Poverty.”
Before I begin, I wish to say a few words. I wrote to the Secretary of State for Scotland on 4 November to invite him to give oral evidence, either in person or online, on the UK Government’s child poverty strategy. A number of follow-up emails were sent seeking a response to our invitation. Last week, the secretary of state’s office confirmed that he was unable to give oral evidence and that he would provide written evidence instead. It is disappointing to receive a response so late.
Although we welcome written evidence, members will not have the opportunity to ask the secretary of state about the content of that evidence. We are keen to work with the UK Government on this important issue and I hope that, going forward, we can work together to eradicate child poverty in Scotland.
With that on the record, I welcome to the meeting Shirley-Anne Somerville, the Cabinet Secretary for Social Justice, and Julie Humphreys, director of tackling child poverty and social justice from the Scottish Government. I thank you both for joining us and invite the cabinet secretary to make some brief opening remarks.
Thank you very much, and good morning, convener. Eradicating child poverty is the Scottish Government’s top priority and a national mission for us all, and I am glad to see the UK Government’s renewed focus on that critical issue, albeit later than it had envisaged.
Although there is action to welcome, including the scrapping of the two-child limit following unrelenting pressure from the Scottish Government and many charities, I am clear that more is required to support families.
There was initially very positive engagement with the co-chairs of the UK Government’s child poverty task force in October 2024 and an interest in developing a truly four-nations approach. However, I am sad to say that that did not materialise. There was a lack of meaningful engagement from UK ministers and, despite sharing learning and experience from Scotland, UK ministers unilaterally decided to end four-nations engagement on the strategy earlier this year.
Despite my repeated attempts, no ministerial engagement took place between May and December as the strategy was finalised. It is deeply disappointing that the UK Government failed to foster the consensus and partnership across Governments that was initially agreed and to seize the opportunity available to us all. Instead, a strategy has been developed that sets no statutory targets for poverty reduction, immediately weakening accountability.
A broad range of measures have been outlined in the strategy, but that mostly represents a consolidation of previously announced policies rather than a commitment to further action. As the Poverty and Inequality Commission and others have highlighted, the strategy does not go far enough to support families with no recourse to public funds, it fails to remove the benefit cap and it continues to freeze the local housing allowance rates. Those are all conscious decisions that the UK Government has taken.
The UK Government’s own analysis shows that relative poverty rates are estimated to remain broadly stable across the UK as a whole, despite the measures in the strategy, with 4.3 million children expected to live in poverty by the end of the decade. That is the scale of the UK Government’s ambition—that poverty remains broadly stable.
In contrast, there is already clear evidence of the impact of the Scottish Government’s approach. Child poverty rates have fallen in Scotland only because we have taken bold action, such as the Scottish child payment, which is successfully keeping children out of poverty. Our action is making a difference, with the lowest-income households with children estimated to be £2,600 a year better off this year as a result of Scottish Government policies.
I will continue to urge the UK Government to go further and to match our ambition and action. As it does so, we remain committed to working with and supporting the implementation of the strategy in Scotland.
As the committee knows, the Scottish Government is in the process of developing our third child poverty delivery plan. We have committed to reinvesting the money that is committed to the two-child limit payment to tackle child poverty. We will set out the details of our investments in the Scottish budget, which will be published on 13 January 2026.
In conclusion, we will continue to review the UK Government strategy and the written evidence provided by the secretary of state, which we did not have the opportunity to look at in detail before giving evidence today. We will look at what that means for Scotland and for our next delivery plan, which is due for publication by the end of March 2026. The Scottish Government is committed to doing all that we can to eradicate child poverty and the UK Government must do so too; the strategy must be its crucial first step and not the only step.
I am grateful for the opportunity to be with you today and to answer any questions that the committee may have.
Thank you, cabinet secretary. There was a lot in that opening statement and I will begin with the positives. As you indicated, the rate of child poverty in Scotland has been falling but you have characterised the UK strategy as broadly stabilising the current very high level of child poverty found elsewhere in the UK, rather than driving it down. You suggested that there was positive and constructive engagement when engagement with the UK Government and UK task force began in October 2024. Can you say a little more about the positive and constructive engagement at that time?
We were certainly keen to work with the new UK Government on the issue. I appreciated that the UK Government needed some private space within the task force so that it could look at the policies that it was developing. A four-nations sub-group was therefore convened, but it would be fair to say that that felt a little more transactional, in that we provided information and got responses rather than ever getting into a discussion or a genuine back-and-forth about how problems could be resolved and taken up or about how we could learn from each other. There were the foundations of what could have been a quite successful four-nations approach, but, unfortunately, that did not happen even when we had the four-nations sub-group, which the UK Government then decided to end. There was a promise of bilateral work to follow on from that, but that did not materialise until the evening before the strategy was published.
You have described the engagement that did happen as being “transactional” but it is good that engagement took place. Did that happen at both ministerial and official level?
As I said in my opening remarks, we had ministerial discussions. However, I would not call them discussions because we provided them with information and ideas about what we thought were the priorities, as did other nations, but no genuine or substantive discussion really took place.
Officials continued meeting after the ministerial meetings ended. Once again, I would describe that as being useful but never getting into the detail of any policies that were being looked at by the UK Government, which meant that there was a genuine inability for Scottish Government officials to have in-depth discussions about the impact that those policies might have in Scotland or about any learning that we could provide or that we could take from what the UK Government intended to do. It would be fair to describe that as suboptimal.
I will roll my next two questions into one because I know that my colleagues wish to come in. The Scottish Government advocated some policies to the UK Government as being able to make a real difference. Did you see any of those policies reflected in the strategy published by the UK Government? Are you still in the dark about why the dialogue suddenly stopped?
The aspect that we warmly welcome is the abolition of the two-child limit. We said all along that it would be much better to do that at source rather than have the Scottish Government mitigating the effects of the limit, so that is to be warmly welcomed.
However, I would use that as an example or demonstration of how, because we did not know where the UK Government was going on that, the Scottish Government and Social Security Scotland had to continue our work so that we could be ready to mitigate the two-child limit ourselves. Indeed, the UK Government’s decision is warmly welcomed and will make a difference to children across the UK. The other caveat is that, because the benefit cap remains in place, many children will not fully benefit from the two-child limit being lifted, because they will be hit by the benefit cap. That is not the case in Scotland because the Scottish Government will mitigate the benefit cap, which will be an additional expenditure for us, in order to ensure that everyone will benefit from the two-child limit being scrapped.
Was no explanation given as to why the conversations with the UK Government ended?
There was a feeling that it wished to move to a bilateral rather than a four-nations process, but the bilateral process did not happen.
I will follow up on the two-child limit later, so I will not explore that further.
Good morning, cabinet secretary. It is unfortunate that the UK Government is not at the meeting because the letter, which I understand was received late last night, reflects a different picture of the engagement between the two Governments, but we do not have the opportunity to question the UK Government about that. The letter speaks about a monitoring and evaluation framework. The cabinet secretary said that there was no statutory target for the UK plan. There is a statutory target in Scotland, but my understanding is that we are not on track to meet it. The monitoring and evaluation framework is in place and is being developed. The letter says that
“we will continue to work closely with the Scottish government to complement ... monitoring and evaluation activity”.
Is it the case that we have a statutory target in Scotland, but that we are not as far along to achieving it as we would hope to be?
We are determined to meet our target in 2030. I recognise that the interim target was not met. It has been more challenging for the Scottish Government to meet its targets when the headwind from the UK Government has been pushing children into poverty, rather than lifting them out of it. As I said in my opening remarks, the two-child limit has now been lifted by the UK Government, which will make a difference to the number of children who are living in poverty and that is important to recognise. I am very pleased that the UK Government has moved on that.
With reference to the targets, before the strategy was published, I had a round-table discussion in London with UK anti-poverty stakeholders to exchange ideas. One of the things that came through clearly for me was their real desire for the UK Government’s strategy to have targets, which they felt was very important. Although the strategy includes monitoring and evaluation, it is not the same level of accountability as there would be if there were targets. When I met the Scotland Office minister in the late afternoon before the strategy was published, at a time when we did not have the strategy to discuss—I had the meeting, but not the strategy—I said to her that we would be keen to work with the UK Government, as we have been all along, on the monitoring and evaluation and on the implementation of it. I hope that we can pick up those discussions with her early in the new year.
You have said that the scrapping of the two-child cap will make a difference. I am trying to understand the figures from the Scottish strategy. I do not know whether you have the Scottish Parliament Information centre’s papers, which say that the
“latest modelling, (including mitigating the two-child limit), estimates 100,000 fewer children in relative poverty”
by 2030. Has modelling been done on what would happen if the two-child cap were to remain in place? I am assuming that the 10 per cent reduction is due to the scrapping of the two-child cap.
If you will forgive me, I am not aware of the part of the SPICe briefing that you are referring to, but we can certainly provide something in writing that will give our analysis of the impact of the two-child limit being scrapped. We had done such modelling anyway because we had planned to mitigate the cap, so I am happy to provide the analysis in writing. Forgive me because I do not have it to hand.
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That would be helpful. I am trying to understand the impact of the Scottish Government’s policies. If the two-child cap were to remain in place, how many children would the strategy help? If we accept that the scrapping of the two-child cap reduces the number by 95,000 in Scotland, that leaves us with 5,000 children being helped. If we could get clarity in writing on that, that would be helpful.
I was going to ask about the impact of the increase in universal credit on Scotland’s targets, but you might need to come back and reassure me about that.
Where we are at the moment—
Sorry to cut across you. You should of course answer that question, and I apologise to Claire Baker, but we are all aware of the questions that other members are due to ask, and quite a lot of overlap is happening.
On the impact modelling aspects, because we were not aware of what was in the strategy until it was published, Scottish Government officials have not been able to model and assess the impact of the policies in Scotland. The UK Government is doing modelling, which my officials are looking at, as you would expect. We are not at the point of having our own information on the impact, but that is being developed, and it will play a key role in the development of our child poverty delivery plan. We will assess the impact of the UK Government strategy, which will be integrated into our overall modelling.
I apologise for cutting across you, Ms Baker. I do not like doing that.
Good morning. How will the Scottish Government spend the funds that it had set aside to mitigate the two-child limit and that are now freed up? It would be good to get an idea of which options you might be looking at for where the funding could be placed.
The First Minister has made it very clear that the funding will be used for further child poverty measures. He made that commitment some time ago and, as I mentioned in my opening remarks, that is now forming part of the budget process, which the Government is going through as we speak, and the measures will be announced as we publish our budget. However, the commitment to ensure that the funding is spent on anti-poverty measures is absolutely sound.
We have had letters and correspondence from stakeholders with different views about how the money could be spent, as you would expect. It is important that we assess that against the Scottish Fiscal Commission’s analysis of the money that will no longer have to be spent because we no longer have to mitigate the two-child limit. It is important to recognise that we await the Scottish Fiscal Commission’s forecasts to see what that amount will be, and, as I have mentioned, we will also have to consider the additional expenditure that we must undertake as a result of the further mitigation of the benefit cap and the expected increase in demand for the Scottish child payment, because more people will be eligible for universal credit and therefore eligible for the Scottish child payment following the scrapping of the two-child limit. All that will be taken into account as we develop the budget.
You have identified that demand may increase for certain benefits in Scotland for which funding has already been set aside, so you have opportunities and options to develop that. That gives the Scottish Government flexibility to look at where that funding could have an impact in the poverty strategy that you have set out.
The First Minister has made it very clear that the money that will be saved from no longer mitigating the limit will be spent on child poverty measures, and we will look at that in the round as part of the budget process.
Thank you.
To show my ignorance in regard to financial things, is the leftover money that you now have a one-off annual thing, or do you see that continuing in the next three or four years? If I am in charge of a third sector organisation, for example, do I have to say what I can do in the next nine months with any money that you give me, or are you generally looking to fund long-term projects—not necessarily in the third sector?
It is recurring. We would have continued to mitigate against the two-child limit for as long as it was in place, so it is a recurring amount of money.
You obviously get lots of demands on how you spend your budget. A couple of weeks ago I was at a food bank here in Edinburgh, and the people there said to me that the largest rise in the number of people coming to the food bank was among young men between the ages of 18 and 22. I understand that the First Minister has already committed the money but, with such competing demand, is there a danger that certain groups within society can get left behind because the focus is on one group? How do you balance that?
You raise a very important point about the competing demands within the budget. The First Minister has made it very clear that the money would be used for child poverty, because the purpose of the mitigation of the two-child limit was to tackle child poverty. Clearly, it is not the only aspect of the Government’s actions to deal with the cost of living crisis that many people face—not just families with children. That is exactly why we invest around £3 billion a year in helping those on low incomes and helping to tackle the cost of living crisis.
That goes wider than our work on child poverty, but the money for the two-child limit will be allocated to a child poverty measure.
Thank you, convener.
I think we are returning to you for your main questions anyway, Mr Balfour.
My apologies, cabinet secretary. It is too close to Christmas.
What is your assessment of how changes to universal credit childcare, the minimum wage and employment rights, for example, might affect child poverty in Scotland?
We are still assessing that at the moment. It is clear that some aspects of the UK strategy will have an impact across the UK and other aspects are England only, for example.
For example, some aspects concern parents on low incomes who are accessing childcare and need to return to work after parental leave to increase their earned income—and that is welcome. We know that the uptake of the universal credit childcare element remains low, and it appears that much of that is to do with a lack of awareness of support and of the availability of eligible services, as well as the genuine complexity of the system.
There is a lack of clarity as to how support with up-front childcare costs for those returning from parental leave will be delivered in practice, with stakeholders advising that awareness of the Jobcentre Plus-led flexible support fund is very poor. There is therefore work to be done on the implementation of the policy to ensure that the UK Government is working to develop the take-up of some of the schemes that it is providing.
Although any proposed increases in the statutory minimum wage rates are of course welcome, the UK national living wage is still not the real living wage, and that difference needs to be recognised. As I think I said earlier to Claire Baker, we are still modelling the impact that those changes will have on Scotland through the work that is being done in drafting the child poverty delivery plan.
I expect that you could talk to us for half an hour on this subject, but the deputy convener is asking you to keep your answer fairly short.
Could more effective action have been taken in relation to measures applying across the whole of the UK?
I could indeed talk for some time on that. It may be useful to the committee if I provided in writing the details, or at least some of the information, that we sent to the UK Government as we tried to move these various aspects along.
It is also important to recognise that I was not sighted on the written evidence from the UK Government until this morning. Perhaps we can wrap in some of my reflections once I have had an opportunity to read the letter from the Scotland Office in greater detail. That will go through some of the missed opportunities that we were hoping to work with the UK Government on as the strategy was developed.
I go back to a previous question. Will there be an obvious line in next year’s budget showing us where the money that was going to be used for mitigation is now being used? Will it be something that you can point to and we can look at specifically, or will it be swallowed up—to use a better word—in the whole of the budget?
Rather than it being swallowed up, it is part of the overall importance that the Government will place on the issue. A number of parts of the budget will help to tackle child poverty. The budget is still being finalised, so we have not worked out the finer details of how that will be developed and presented. However, we recognise the importance of being able to demonstrate to stakeholders that we have developed that work. The First Minister has been true to his word about using the money to tackle child poverty, and we will reflect on how we can demonstrate that in the budget.
Good morning, cabinet secretary. The strategies of the UK Government and the Scottish Government are set out differently and have different priorities. That is understandable. I am interested in whether there is a wee bit of crossover. To what extent are policies that are already in place in Scotland included in the UK Government’s strategy? Do you see that crossover as helpful? Are there any additional points that you would raise?
There are clearly areas where both Governments have come to the same conclusions about the drivers of child poverty and the important policy interventions that can be undertaken. We might have used different terminologies, but it is important that we look at income from social security and the wider support that is given to people, for example through employment or from other public services. It would therefore be fair to say that there is a shared read-across about the drivers of poverty.
Work has been undertaken by both Governments in a number of areas; sometimes that work is similar and sometimes it is separate. With regard to social security, the UK Government has taken the decision on the two-child limit. We were disappointed that it did not go further on the benefit cap or the local housing allowance, or implement something equivalent to the Scottish child payment.
There are areas in the UK strategy to do with early learning, childcare, employability and so on that are solely to do with England. We, too, have policies on early learning and childcare, and ones that recognise the importance of employability. How that will be taken forward will be developed in the budget and the tackling child poverty delivery plans.
Many of the foundations and the understanding of the drivers of poverty are the same. The policies sometimes differ in range or in detail.
You used an example that I pulled out, too, about the difference in the way in which England is approaching free childcare. Are you keen to make sure that lessons are learned about how we might do some of the things that are positive in the UK strategy?
We are very keen to learn lessons. That is why we wanted to work more closely with the UK Government on the development of the strategy, because we thought that there might even be things that we could learn from it—who knows? We did not have that opportunity, but we are keen to look at it.
09:30It is important to recognise that we in Scotland have sometimes taken different approaches to policies and that there are also policies available in Scotland that are not available in the UK. I mentioned the fact that, overall, around £3 billion is spent on helping those on low incomes and the cost of living crisis. We have developed the five family payments, including the Scottish child payment, in which we invest more than £0.5 billion, and there are the free prescriptions and free eye tests. There are therefore a number of things that are not in the UK strategy that are in the Scottish Government’s policy.
As we look at where the UK Government has taken a different policy approach, it is also important that we learn lessons. There is a difference in approach to childcare in England, with that approach being available only to working families. The Institute for Fiscal Studies has made it clear that, despite the investment that has been made, the poorest third of families will see almost no direct benefit from the new entitlements. When I was down in London for my most recent round table, I also heard that there are some implementation challenges when a policy is being launched, but there are also challenges with delivery. That is quite normal when such a large policy is undertaken.
Those are the types of lessons that we would like to be able to learn, so we can learn about what has worked well and about the challenges that different Governments, whether in England or Wales, face when they take different approaches.
As we have just heard, various measures have been set out in the UK Government’s strategy that might give rise to Barnett consequentials. Have you had the opportunity to gather and generate an estimate of how much those consequentials might be?
The UK Government’s budget resulted in additional consequentials of £820 million over the UK spending review period—it is important to note that that is over the spending review period.
The amount falls short of the investment that ministers called for. To summarise that with an example, it does not make up for the funding shortfall in the cost of the increased employers’ national insurance contributions that were introduced in last year’s budget. Although there has been an increase in Barnett consequentials, it is important to recognise the time period of that increase and the fact that it does not make up for the hit from last year’s increase in employers’ national insurance contributions.
I have already mentioned how we will deal with the two-child limit funding and what our approach is to using the money that has been freed up from our commitment on that.
Is there any understanding of what has been generated by the UK child poverty strategy and any consequentials that might flow from it? I think that the committee would like to know what that is and whether any consequentials would be funnelled into child poverty measures.
In my opening remarks, I referred to the strategy being more of a consolidation of what was previously announced rather than what is new, with the exception of the two-child limit. I do not know what language the UK ministers have used in their written evidence, but in the discussion that I had before we had the copy of the strategy, it was implied that it was a collation rather than a launch of new things. Therefore, there are no additional consequentials from it, because there does not appear to be anything new that would bring any consequentials to the Scottish Government.
That is helpful.
If there is anything in the written evidence to the contrary, I will be happy to look at it, but that is our understanding at present.
Cabinet secretary, we are approaching the end of our evidence session, but I might just finish off where we started, which was on the on-going dialogue with the UK Government. For whatever reason, that appeared to dry up and the bilateral discussions did not happen.
What is your preference, cabinet secretary? Is it for a four-nation approach to tackling child poverty, so that we can draw on the experience of Wales and Northern Ireland, share best practice and have open and honest discussions about what various Governments think works and does not work? If there are disagreements, that is okay, but it is important to be clear about your preferred approach. Is it about sharing best practice and continuing that conversation, or was it the bilateral approach suggested by the UK Government that did not happen in the end? What would you like to see happen, cabinet secretary?
For me, whether it is a four-nation or bilateral approach, it is about how we get past me saying what I would like, the UK Government giving its position and there being no genuine discussion. We need to find a way through that.
I am conscious of the fact that, on the day that the strategy was launched, Scotland Office ministers suggested that they were disappointed that the Scottish Government was obsessed with process issues, saying that we should get down to the details. However, it is exactly because we wanted to get down to the details that we needed a process—to allow us to do that.
The type of thing that I would like to see next year is a genuine discussion, whether it is about difference in policies, lessons learned, monitoring and evaluation, or whether it is about looking in more detail at the strategy that the UK Government has developed and how it impacts on Scotland. For that to be meaningful, we need to get past the transactional nature of the discussions that we were in at the start of last year and get down to a genuine discussion.
I would very much welcome that, and we are in the middle of drafting our child poverty delivery plan, so there is absolutely the space to do it. I hope that the UK Government can find a way to think that that might also be useful as it looks to implement its policy.
That is helpful. As there are no more questions, I thank the cabinet secretary and Julie Humphreys for their support of our evidence session this morning. That concludes our public business, and I move the meeting into private.
09:37 Meeting continued in private until 10:56.