Powered by Guardian.co.ukThis article titled “Scottish government urged to use devolved powers on child poverty” was written by Libby Brooks, for theguardian.com on Monday 5th March 2018 00.01 UTC

The Scottish government is coming under pressure to commit to using its newly devolved powers to top up benefits in order to meet its child poverty targets.

Last November, Holyrood passed Scotland’s first child poverty bill, which reintroduced the statutory targets abolished by the UK government a year earlier. The four goals, which include reducing relative poverty from 26% to 10% of children and absolute poverty from 21% to 5% of children, must be met by 2030.

But anti-poverty campaigners, supported by research from the cross-party thinktank IPPR Scotland, argue that using the new powers to top up existing benefits, part of an extensive package of welfare devolution going through the Scottish parliament, is the simplest and most effective way of meeting those targets.

According to the IPPR Scotland report, which modelled the effects of topping-up the child element of universal credit for the next financial year, a top-up of £50 a month could bring 45,000 children out of relative poverty, at a cost of £390m a year, reducing child poverty in Scotland by just under a fifth

The number of children could increase to 100,000 with a top-up of £150 a month, at a cost of £950m a year, reducing relative child poverty rates in Scotland from 26% to 19%. The Institute for Fiscal Studies has forecast that relative child poverty rates in Scotland could reach 29% by 2021-22 because of slowing economic growth and continued austerity.

What is universal credit?

Universal credit is the supposed flagship reform of the benefits system, rolling together six benefits (including unemployment benefit, tax credits and housing benefit) into one, online-only system. The theoretical aim, for which there was general support across the political spectrum, was to simplify the benefits system and increase the incentives for people to work, rather than stay on benefits.

How long has it been around?

The project was legislated for in 2011 under the auspices of its most vocal champion, Iain Duncan Smith. The plan was to roll it out by 2017. However, a series of management failures, expensive IT blunders and design faults have seen it fall at least five years behind schedule.

What is the biggest problem?

The original design set out  a minimum 42-day wait for a first payment to claimants when they moved to universal credit (in practice this is often up to 60 days). After sustained pressure, the government announced in the autumn 2017 budget that the wait would be reduced to 35 days from February 2018. This will partially mitigate the impact on many claimants of having no income for six weeks. The wait has led to rent arrears (and in some cases to eviction), hunger (food banks in universal credit areas report notable increases in referrals), use of expensive credit and mental distress.

Ministers have expanded the availability of hardship loans (now repayable over a year) to help new claimants while they wait for payment. And housing benefit will now continue for an extra two weeks after the start of a universal credit claim. However, critics say the five-week waiting time is not enough and want it reduced to two or three weeks.

Are there other problems?

Plenty.  Multibillion-pound cuts to work allowances imposed by the former chancellor George Osborne mean universal credit is far less generous than originally envisaged. According to the Resolution Foundation thinktank, about 2.5m low-income working households will be more than £1,000 a year worse off when they move on to universal credit, reducing work incentives. Landlords are worried that the level of rent arrears racked up by tenants on universal credit could lead to a rise in evictions. It’s also not very user-friendly: claimants complain the system is complex, unreliable and difficult to manage, particularly if you have no internet access.


Russell Gunson, the director of IPPR Scotland, said: “Compared with topping up child benefit, or other existing benefits, our analysis found that topping up the child element of universal credit in Scotland was most effective at tackling relative child poverty.

“Using Scotland’s new powers to top up benefits may not be as difficult as creating whole new benefits, and it’s clear that we need some really ambitious action to meet these targets, from government, business and others. We’re keen for us not just to have world-leading targets on reducing child poverty but also world-leading progress.”

John Dickie of the child poverty campaign group CPAG Scotland welcomed the findings, saying: “Today sees yet more independent analysis setting out the urgency of using Holyrood ‘top-up’ powers to boost family incomes as part of wider action to end child poverty.”

CPAG has made the case for an immediate £5 top-up for child benefit. “What is absolutely clear is that doing nothing is not an option. Ministers must now choose how, not if, to use new social security powers to help end child poverty,” it said.

The Scottish government will bring its action plan for meeting the 2030 targets before MSPs by the end of this month.

At the most recent meeting of the social security committee, the Scottish government rejected an amendment supported by Labour and the Scottish Greens to write the £5 child benefit increase into the framework bill for the new powers, arguing that enabling legislation was not the appropriate place for such a change.

Jeane Freeman, the social security minister, said: “There can be little doubt that using resources in a way that delivers relatively small impacts on child poverty is not the most effective targeted action to take. So it is clear that, whilst a universal £5 top up to child benefit is not a bad idea it is not the best idea.”

The Scottish government’s independent poverty andinequality commission published its own advice on meeting the 2030 targets last week, suggesting that social security powers are one of the key levers that will need to be used.

While the commission did not recommend topping up a specific benefit, it did note analysis which suggested that topping up the child element of universal credit, combined with removing the two-child limit and removing the benefit cap, is “potentially the most cost-effective way of reducing child poverty”.

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