Parliamentary Briefing Scotland s Anti- Poverty Framework Introduction These are challenging times for fighting poverty in Scotland. After years of progress in some areas we are now beginning to see an increase in levels of poverty amongst key groups. The recession has meant that thousands more families are at risk of poverty, with the services that people on low incomes rely on coming under pressure due to spending cuts. The Poverty Alliance welcomes this timely debate in the Scottish Parliament about the Achieving Our Potential (AOP) anti-poverty framework. It is vital that we have an open debate regarding how we can do more in these difficult times to protect the most vulnerable and ensure that we do not slip further back in the fight against poverty. This briefing draws on the Poverty Alliance s experience of working with hundreds of groups and individuals across Scotland with direct experience of poverty and many who are engaged in the fight against poverty. In the last two years alone we have organised more than 30 discussion seminars, focus groups, conferences and training events involving a wide range of participants, including people directly experiencing poverty, community and voluntary organisations, representatives of local authorities, health boards and the Scottish and UK Governments. This briefing is based on the experiences and views gathered at these events, as well other source material. In addition it is informed by the Poverty Alliance s key priority areas: Incomes in and out of work, Services to tackle poverty, Participation Attitudes to poverty. The briefing sets out the current context of poverty in Scotland, looks in turn at each of the key areas in the framework and makes recommendations on where actions can be improved in the future. Parliamentary Briefing June 2010 1
Poverty in Scotland The latest figures for poverty in Scotland are not encouraging 1. Overall there has been little change in the proportion of individuals living in relative poverty in Scotland since 2004/05. In 2008/09 840,000 individuals lived in relative poverty in Scotland (before housing costs). The proportion of children living in low-income households increased from 20 to 21 percent between 2007/08 to 2008/09, and the proportion of adults living in lowincome households increased from 15 to 16 percent over the same period (an increase of 30,000). Whilst these increases may reflect the initial impact of the recession, it is important to note that the current trends in relation to income poverty pre-date the recession. The New Policy Institute (NPI)/Joseph Rowntree Foundation (JRF) note in the Monitoring Poverty and Social Exclusion 2009 report that progress in tackling poverty has effectively stopped since 2004/05 2. The reasons for the halting of progress in relation to child poverty are complex. However a combination of issues in relation to benefits and in-work poverty may provide an explanation. NPI notes that whilst Working Tax Credits have been successful in keeping around 1 million children out of poverty each year at the GB level (an additional 700,000 children out of poverty each year compared to the old pre- 1999 Family Credit system) more families 1 Scottish Government HBAI 2008/09 Briefing http://www.scotland.gov.uk/publications/2010/05/po vertystats0809 2 T. MacInnes et al (2009) Monitoring Poverty and Social Exclusion 2009, NPI/Joseph Rowntree Foundation http://www.jrf.org.uk/sites/files/jrf/monitoringpoverty-social-exclusion-2009-full.pdf now require them. They note that the fairly strong improvement brought about by tax credits has been undermined by a rising need for them. Although they also state that it is not clear what is driving this need for tax credits, they also note that in-work poverty has been rising. It may be that this is fueling the need for tax credits. We return to the issue of low pay below. It is also important to note that low benefit levels are also a significant factor in the increase in relative poverty. The value of benefits for adults has not kept pace with inflation. Whilst this is an area out side of Scottish Government control, it is an issue that is likely to have a greater impact on efforts to address poverty in the future. The Scottish Government must have a clear position on the role of income adequacy within the benefits system and must make its position clear to the UK Government. The impact of unemployment on poverty levels in Scotland, whilst not recorded in the latest data, will undoubtedly be a significant factor in the coming years. This will be seen in two ways. Increases in out of work poverty. As the numbers of people reliant on out of work benefits increases, then so too will the level of poverty for adults, with and without children. A rise in the proportion of households experiencing in-work poverty. This will be as a result of more families relying on a sole earner or on parttime work. Tackling Income Inequality The inclusion of income inequality in the Scottish Government/Cosla anti-poverty framework was ambitious. Whilst many Governments across Europe talk of the Parliamentary Briefing June 2010 2
need to address income inequality, few (if any) have made it a central part of their anti-poverty strategy. We welcome the inclusion of the target to increase the proportion of income by the lowest three income deciles as a group by 2017. However, this is a challenging target and it is not yet clear that it has been integrated into the approaches taken by local partners to address poverty. We return to this issue below. Within the area of tackling income inequalities the framework identifies three priorities: Making work pay Maximising the potential for people to work; and Maximising income. Low Pay We are encouraged that the need to address low pay is prominent in the antipoverty framework. A recent report by the Poverty Alliance 3 highlighted that at least 370,000 workers in Scotland were paid less than 7 an hour. Around 20 percent of women were low paid, and rural parts of Scotland had some of the highest proportions of workers in low paid jobs. Addressing low pay is a difficult issue in the devolved context. The most direct route to increasing low paid workers incomes would be to increase the National Minimum Wage, to lift low paid workers out of the tax system or to improve tax credits. These are not options that are available in Scotland. However there is much that can be done in Scotland, and the Scottish Government and local partners have a key role to play. 3 K Strauss (2010) Low Pay in Scotland, Poverty Alliance Briefing No. 15, http://www.povertyalliance.org/publications_detail.a sp?pubs_id=52 Recommendation 1 The Scottish Government and Local Authorities take immediate action to bring all directly employed staff up to the level of the Scottish Living Wage, currently 7.15 an hour. The most recent figures available suggest that some 20 percent of directly employed public sector workers are paid less than 7 an hour. A Freedom of Information (FOI) request to health boards and local authorities has shown that the exact number of low paid workers within these organisations varies substantially. But we estimate that at least 8,500 workers directly employed by the NHS in Scotland were paid less than 7 an hour at the beginning of May 2010. Accurate figures on the number of subcontracted staff paid less than this were not available. Within Scottish Local Authorities we estimate that at least 13,591 workers were paid less than 7 an hour. This does not include nine local authorities who have yet to respond to the FOI request. The number of subcontracted staff was not available for local authorities. Paying these workers the living wage will make a small impact on the target to reduce income inequality, but, more importantly it will make a significant impact on the lives of those workers affected and their families. As one low paid worker interviewed by the Scottish Living Wage Campaign (SLWC) stated: The cost of living is so high; it [the living wage] is needed to get by. It s got to be better than the minimum wage. Who can actually live on the minimum I m pretty sure that the Parliamentary Briefing June 2010 3
people who came up with those figures aren t. 4 Paying the living wage to directly employed staff would also send a clear signal to all employers that low pay is an issue that must be dealt with. The recession and the public sector pay squeeze cannot be used as an excuse for not addressing low pay in these areas. It is notable that over the last year the Scottish Living Wage Campaign has made three Living Wage Employer Awards to Glasgow City Council, Scottish Enterprise and Employers in Voluntary Housing. The Scottish Government, local authorities and NHS Scotland should follow their lead and pay the living wage to all of their staff. We also believe that more could be done by Scottish Government and local authorities to make greater use of community benefit clauses to ensure that any companies bidding for public sector contracts agrees to pay at least the living wage set by the Scottish Living Wage campaign. One of the most significant challenges is engaging the private sector in the discussion about low pay. The most substantial problems of low pay are in the hospitality and retail sectors. These sectors are important to the Scottish economy and it is vital that our future economic success is not based on low paid work. Recommendation 2 The Scottish Government should institute a programme to recognise good practice in relation to low pay, 4 For more details see the case study section of the Scottish Living Wage Campaign Website http://povertyalliance.org/slw-resourcesdetail.asp?ct_id=43 particularly in relation to the retail and hospitality sectors. This could be modelled on Investors in People Award or on Green Tourism Awards. Such an approach could help to foster a change in the culture that tolerates low pay. Access to Rights One of the commitments in the framework was to institute a campaign regarding access to basic employment rights. Initial discussions took place between the STUC, the Poverty Alliance and the Scottish Government. These discussions did not lead to the campaign that was anticipated. We understand that further work is ongoing within the Scottish Government to identify vulnerable workers that would benefit from such a campaign. We believe that such a campaign required now more than ever as the recession continues to have an impact and workers terms and conditions come under increasing pressure as budgets are squeezed. Case studies carried out as part of the Scottish Living Wage Campaign highlighted that poor working conditions go hand in hand with low pay. Recommendation 3 The Scottish Government should instigate a campaign on basic employment rights as soon as possible to ensure that there is no erosion of workers rights as a result of cuts. Maximising the potential for people to work One of the key challenges in this area is the context in which the framework has been operating. Throughout the period, since its launch in November 2008, unemployment has been consistently Parliamentary Briefing June 2010 4
increasing. This has made the task of ensuring that those furthest from the labour market are supported back into work much more challenging. The Future Jobs Fund has played an important role in ensuring that younger people remain connected to labour market during the recession. The efforts to support the creation of more apprenticeships by the Scottish Government, particularly the recent announcement of 5,000 more new places, will also play an important part in helping to ensure that people are able to access employment. This approach has been complemented by work undertaken by some local authorities (particularly Glasgow City Council) to increase the availability of apprenticeships. What is not clear is the impact that these efforts are having on those who are most at risk of poverty. Recommendation 4 The Scottish Government and Cosla should publish details of the impact of current training initiatives on those furthest from the labour market. This will allow an assessment of whether more resources need to be directed to particular vulnerable groups. We are pleased that efforts to ensure the lessons from the Working for Families programme are disseminated. This was a popular and successful programme and it is good that work has already begun on the dissemination of good practice. One of the elements, we believe, that helped in the success of the programme was that it was a national programme delivered in a flexible way at the local level. From work carried out into the programme by the Poverty Alliance, the local branding of the programme was important, as was the holistic approach that was taken 5. We believe that there should be scope to deliver national programmes in partnership with local government. Recommendation 5 In future revisions and negotiations on the concordat between the Scottish Government and Cosla opportunities are created to allow for large scale national demonstration projects to tackle address poverty and social exclusion. One of the key barriers that Working for Families sought to address is the lack of affordable and appropriate childcare. Recent evidence from the Daycare Trust suggests that the costs of childcare continue to rise 6. Action to address problems with access to childcare would not only ease the financial pressure on low income working parents, but would also tackle one of the key barriers that many parents face in returning to the labour market. Recommendation 6 The Scottish Government and Cosla must ensure that commitments made to increase nursery provision for 3 and 4 years olds to 15 hours per week is honoured by all local authorities. Maximising Income for All 5 S. Mackenzie (2008) Bridging the Policy Gap Report: the Working for Families Fund, www.povertyaliance.org/btpg 6 http://www.daycaretrust.org.uk/pages/childcare-costsstill-on-the-up-despite-recession.html 10 February 2010 Parliamentary Briefing June 2010 5
The additional funding given to independent advice services in Scotland through the framework has been important in providing support to those on low incomes. The success of the Macmillan Cancer Support in accessing benefits for their clients is well known. Despite the support that has been given to a range of advice providers, we are aware that many independent advice providers are under increasing pressure to deal with the volume of enquiries they are dealing with. Many participants at the Poverty Alliance s recent seminar series highlighted that many advice agencies were operating flat out. Services in rural areas in particular appear to be under real pressure. We are concerned that cuts in funding from both local and national Government will have a severe impact on advice provision when it is needed most. We are aware that it is not only voluntary sector advice provision that is under threat. For example, staffing in the welfare rights team in Glasgow City Council is being cut, with cuts in advice provision expected elsewhere. In this context the 2.5million cut in funding to implement the framework announced by the Minister for Housing and Communities will cause a great deal of anxiety among those delivering vital frontline services to vulnerable families and individuals. Recommendation 6 The Scottish Government and Cosla must be transparent in the decision making process regarding any funding cuts. Repeated commitments have been made that services for the most vulnerable will be protected. It is vital that all public bodies demonstrate how they will do this. Supporting People Living in Poverty Given the change in the economic context in which the AOP framework is being delivered there is a greater emphasis required on supporting people who are currently living in poverty. The elements identified in this area for further action are in many ways correct: reform of local taxation, addressing fuel poverty and financial inclusion are all important in times of increased pressure on already limited family budgets. Local taxation It is disappointing that no alternative approaches to addressing the problems of the current council tax system have been proposed. The current system remain fundamentally regressive, particularly for those in low paid work who are not able to access Council Tax Benefit. Recommendation 7 All parties in the Scottish Parliament work together to find a suitable way of reforming the current system to reduce the burden of the council tax on people living on low incomes. Fuel poverty Around 800,000 i.e. 1 in 3 households in Scotland are unable to afford to heat their homes to an adequate level. For those living in fuel poverty, the consequences are misery, discomfort, ill health and debt. It often means choosing between essentials such as cooking a hot meal or turning on the heating. There is a statutory requirement to end fuel poverty in Scotland by 2016. To achieve this, Scottish schemes such as the Energy Assistance Package are important. The Parliamentary Briefing June 2010 6
Scheme improves the energy efficiency of homes, as well as boosting low disposable household income through benefit and tax credit checks and referrals to social tariffs offered by energy suppliers. However, a number of bodies, including the Scottish Fuel Poverty Forum, have indicated that a step change in investment is required in order to meet the 2016 target. Recommendation 8 The Scottish Government increases investment on fuel poverty programmes and clarifies how it is plans to achieve the goal of eradicating fuel poverty by 2016. Addressing the stigma of poverty It was encouraging that the issue of the stigma associated with poverty was mentioned in AOP. However there appear to be no concrete actions linked to this issue. Community members attending events organised by the Poverty Alliance frequently refer to the stigma of poverty, whether this is in respect of the casual use of discriminatory language or the experience of interacting with benefits system. The experience of stigma and discrimination can make the already difficult situation of living on a low income worse by reinforcing the sense of exclusion that many people living on low incomes experience. Addressing negative public attitudes to poverty is a legitimate and necessary area of activity. Work carried out by JRF over the last few years has highlighted that negative public attitudes are a barrier to building greater support to tackle poverty. 7 7 http://www.jrf.org.uk/work/workarea/attitudespoverty The European Year for Combating Poverty and Social Exclusion provides an opportunity for taking action around the issue of attitudes to poverty. We believe that the Scottish Government and Cosla must do more to address the issues of stigma and discrimination faced by people living on low incomes. Recommendation 9 The Scottish Government should look at developing an ongoing programme, similar to the See Me campaign, to address public attitudes to poverty. Free school meals We are pleased that the Scottish Government held to its promise of making it possible for local authorities to provide free school meals to all pupils in P1-P3. However we are disappointed that few local authorities appear willing to ensure that the commitment is delivered. This has the potential to make a significant impact on the health outcomes of all children, but particularly those from low income households. Recommendation 10 The Scottish Government should set out how they will ensure that all P1-P3 pupils will be able to access free school lunches from August 2010. Making the Tax and Benefits System Work Better The framework sets out some very important principles for the way that the tax and benefits system should operate in Scotland. The key principles around security of income, simplicity and transparency, the importance of reducing Parliamentary Briefing June 2010 7
financial risk are all important in the reform of the welfare system. We are particularly please to see the statement that Benefits must provide a standard of living which supports dignity, freedom and social unity. The benefits system will, it is expected, undergo significant change under the new UK Coalition Government. Whilst these changes are intended to simplify and improve the system, there is a danger that the system will become significantly tougher for many claimants. Recent statements around the use of benefit sanctions are incompatible with tackling poverty. We note in the framework that the Scottish Government will establish high level meetings with the DWP and Cosla leaders. As the pace of welfare reform is likely to increase we would encourage the Scottish Government to ensure that these meetings take place. We would expect that they will ensure that the principles in the framework will form the basis of any discussions with the UK Government regarding the future shape of welfare reform. Institutional Arrangements The concordat between Cosla and the Scottish Government has brought changes to how policy is developed and implemented, how priorities are identified and targeted, and how progress is monitored. Policy development and implementation The AOP Framework is a joint statement signed off by both Cosla and the Scottish Government. It is intended to help contribute to the national outcome we have tackled the significant inequalities in Scottish society. It is clear that the intention is that achieving this outcome can only be done collectively and in a coordinated way.. Coordination should come through the Single Outcome Agreement (SOA) agreed between Community Planning Partnerships and the Scottish Government. In theory this should allow for greater flexibility by local partners to identify the key poverty issues in their area and take the action required to deal them. The framework should add to this process by helping to set out priorities for investment across the four policy areas that make up the framework. However it is not clear that, in relation to tackling poverty, this has been the case. A comprehensive review of SOA carried out last year by Members of the End Child Poverty Coalition in Scotland. This found wide variation in the approaches that local partners took to addressing poverty and to the priority it was given. For example only nine SOAs stated that they had developed local anti-poverty strategies, and only one stated that they were working to embed the framework into their SOA. The End Child Poverty briefing stated that this suggests that the framework has not been a key strategic document in developing the 2009 SOAs. Recommendation 11 More needs to be done to ensure that all CPPs embed the framework into their SOAs and that it has a strategic role in the development of future agreements. The Tackling Poverty and Regeneration Learning Network, run by the Scottish Centre for Regeneration within the Scottish Government, was launched in early 2009 and has organised a range of successful events and briefings aimed at CPP members in order to help them address poverty more effectively. It is likely that as Parliamentary Briefing June 2010 8
the learning network develops, then it will result in a better fit between local priorities and the AOP framework. Forums such as the Cosla Tackling Poverty Officers Group and the Elected Members Tackling Poverty Group are welcome. However it is not clear that these forums and activities are impacting on the mainstream policy at the local level. Whilst many local authorities and CPPs take their role and responsibility in relation to addressing poverty very seriously the analysis of SOAs by the End Child Poverty Coalition suggests that many appear to be still paying only lip service to ensuring that the approached outlined in the framework is fully integrated into local strategies. The other main element in the governance of the framework is the Tackling Poverty Programme Board. It is taking forward important work to help in the prioritisation and monitoring of commitments in the framework, but after only four meetings it too early to say what influence it will have on the development of future priorities for tackling poverty. The open and transparent way that this board has operated, with all papers easily accessible on the Scottish Government website 8, is to be commended. It is to be hoped that this high level board will continue to develop and become a key mechanism for influencing the future direct of anti-poverty policy in Scotland. Recommendation 13 The role of the Tackling Poverty Program Board in relation to influencing future spending decisions and priorities at the national level should be clarified 8 See: http://www.scotland.gov.uk/topics/people/tacklingpoverty/initiatives/tacklingpovertyboard As part of the Alliance s Evidence Participation Change project, the Scottish Government and Cosla have committed a significant amount of time to supporting the creation of a Tackling Poverty Stakeholder Forum. This forum involves participants from within local and national government, representatives of key voluntary organisations, and people with direct experience of poverty. This body feeds in the views from these representatives to the development of anti-poverty policy in Scotland, and contributes to the monitoring of the framework. The support given to this body underlines the genuine commitment to the involvement of external stakeholders, and particularly those with direct experience of the issues, in the development of national anti-poverty policy. This commitment is a very positive step forward. Prioritisation and Targeting The institutional framework that has developed should, in theory, allow for a clearer and more transparent approach to prioritisation and targeting of actions to address poverty and social exclusion in Scotland. In a time of increasingly tight public spending, this will become more important to ensure that key anti-poverty priorities are delivered and that support for the most vulnerable is maintained. Recommendation 14 The Scottish Government must show how spending decisions support the delivery of key goals within the framework, particularly where budgets are being reduced. Given that the framework is a joint framework with Cosla, it is vital that local authorities and other public bodies are Parliamentary Briefing June 2010 9
transparent about what impact any changes to funding will have on the commitments to tackle poverty. Cuts are already being applied to a whole range of services at local level. Additional charges are also being applied to many services which will have an impact on people living on low incomes 9. Whilst many authorities state that they will continue to protect the most vulnerable whilst making cuts, it is not clear how this is being done in practice. Recommendation 15 Local Authorities and other statutory bodies should be required to show how changes to spending at the local level will impact on the commitments they have agreed to within AOP. The current arrangements certainly provide a means to carry out this prioritisation. However, it is not clear what impact they are having on the decisions that are currently being taken, either at national or local level. Whilst the precise nature of the policy mix required to address poverty will change due to the recession, more could be done to ensure that decisions that are taken do not run counter to the objectives outlined in the framework. Monitoring the framework The strong link between the framework and SOAs means that monitoring of the framework is tied up with monitoring of SOAs. We have a concern that at present monitoring of both is far too weak. A more robust approach to monitoring is required. The Scottish Government has a role to play in bringing together information on key priorities and actions at a local and national level and reporting on these on a regular basis. This would allow for the development of a national overview on whether progress is being made in addressing poverty. This national report would then be subject to debate in the Scottish Parliament. This would allow for greater scrutiny of current actions and more transparency in the monitoring of commitments made in the anti-poverty framework. Recommendation 15 CPPs should be required to produce dedicated anti-poverty strategies that reflect commitments in the framework and in other relevant areas (those areas where there are statutory duties e.g. child poverty, fuel poverty, homelessness, etc) Conclusions In the midst of the recession there is a real need for continuing the fight against poverty. It is likely that as economic growth returns to the economy unemployment will continue to increase. The cuts that are affecting public services and the voluntary sector have the potential to lead to further hardship for thousands of families across Scotland. Cuts being implemented at the UK level are likely to compound this hardship. In this context the debate on poverty taking place in the Scottish Parliament is a vital one. Out of it should come greater clarity on how we can better protect those currently living in poverty, and how we prevent more people falling into it in the future. 9 See for example http://www.heraldscotland.com/news/homenews/the-reckoning-1.1002716 Parliamentary Briefing June 2010 10