Hanna McCulloch, policy and parliamentary officer at CPAG Scotland, outlines the case for a £5 top up of child benefit
In the last few weeks official figures have shown that rates of child poverty in Scotland have leapt from 1 in 5 to 1 in 4.
Despite receiving very little media attention, the figures are big news for the 260,000 children now classed as living in poverty in Scotland – many of whom will have their prospects and hopes for the future dashed by a lack of the basic resources their friends and classmates take for granted.
Worse still, these latest figures could be just the tip of the iceberg. The Institute for Studies has forecast that by 2020 the number of children living in poverty in the UK will have doubled compared to 2010. And while a lack of good quality, decently-paid jobs is key cause of child poverty the key factors driving up poverty are dramatic cuts to the UK social security system.
UK government policies such as the decision to freeze the value of working age benefits (regardless of how much the cost of food or clothes or nappies rise) and cuts to tax credit and universal credit for working families have been cited time and again by independent analysts as key drivers of the ongoing rise in rates of poverty.
It’s a bleak picture and it can sometimes seem overwhelming. There’s a real temptation for us to throw up our hands in frustration and defeat. After all, what can really be done here in Scotland to make a dent in such massive rises in poverty and such swinging cuts in spending?
We should, however, steel ourselves and remember that, in reality, a huge amount can be done.
No, child poverty cannot be eradicated overnight in Scotland. But well designed, adequately funded policies could start to turn the tide on child poverty – and make a significant difference to the tens of thousands of families that are struggling to make ends meet. The Scottish Government knows this. It’s one of the reasons for its decision to introduce a Child Poverty (Scotland) Bill to eradicate child poverty in Scotland by 2030.
One policy that would set the Scottish Government well on its way to this goal would be using newly devolved social security powers to top-up reserved benefits.
CPAG along with the Poverty Alliance, One Parent Families Scotland, the Church of Scotland and the Children’s Commissioner for Children and Young People and many others are calling on the Scottish Government to use its new social security powers to top-up child benefit by £5 per week for every child in Scotland.
To some, £5 a week sounds like small change. Enough for a latte and a Sunday paper. But we know that it’s enough to make a significant difference both at national level (by reducing levels of child poverty by up to 14%) and at household level (by making a significant contribution to the everyday cost of living).
£5 a week could mean seven breakfasts of cereal, milk, fruit juice and a banana for a child. Over two months it could mean a good quality coat to see a child through the Scottish winter. Over the course of a year it could pay for a child to go away on a week-long P7 trip with his friends. These are real, tangible resources and experiences that could make a significant difference to the health, wellbeing and attainment of Scotland’s children.
£5 could also help to ease the pressure on stressed out parents that are struggling to make ends meet. Rebecca, a lone parent living in Inverness told us that an extra £5 a week “would be beneficial. With so many bills it would be one day less crying”.
While many support the idea of using top-up power to invest in family benefits, they are less convinced that child benefit is the right one to top-up. Surely it makes more sense, they argue, to top-up benefits that are only paid to families on the lowest incomes. Why not add £5 or even more to the value of means tested benefits like universal credit or child tax credit that are targeted at those on the lowest incomes?
Indeed, at a time of strictly limited resources and competing demands for government spending such an approach makes a lot of sense and it’s an approach that we have given a great deal of thought here at CPAG. The real difficult, however, is that getting extra money only to those at risk of poverty can be administratively problematic – even impossible – and would result in many of the children in the greatest need missing out.
Problems with making a Scottish top-up dependent on the family being in receipt of a ‘means-tested’ benefit include the following.
Means tested benefits are unpredictable
Cases that CPAG has gathered through its early warning system highlight the fact that means tested benefits are often subject to long delays, sanctions and suspensions – often with little rhyme or reason. The resulting sudden falls in household income often drive families into income crisis and to the doors of their local food bank.
A young couple with two small children have been left with very little income for five months and substantial rent arrears as they were repeatedly incorrectly advised that they were not entitled to UC. Initially their claims were not accepted and they were advised to claim tax credits, but this was refused as the couple live in a full service area. After three months a claim was accepted but immediately erroneously closed.
In terms of the Scottish Government’s powers, the problem lies in the fact that topping up unpredictable benefits would make that top-up unpredictable too.
Child benefit on the other hand is administratively simple. It isn’t based on complicated income calculations that can be botched. It isn’t subject to sanction or suspension. Indeed it is very often the only source of income that families presenting at food banks have when their means tested benefits and the system delivering them have failed.
Fewer and fewer families get means tested benefits
There was a time when most families with children at risk of poverty were in receipt of some kind of means tested benefit – whether that be income support or child tax credit or both. Cuts and restrictions to benefit entitlements, however, mean that the pool of families eligible for those benefits is shrinking. So while six out of ten families with children were eligible for tax credits in 2015, only five out of ten families will be eligible for universal credit by the time it is fully rolled out. In this way, making the Scottish Government’s top-up contingent on eligibility for UK benefits could chip away at its value over time, leaving many of the 70% of children in poverty that live in working households at risk of missing out.
It can be hard to know who gets what means tested benefit
Finally, families move in and out of eligibility for means tested benefits over time as their incomes rise and fall with changing earnings, redundancy, pregnancy and the many other complexities of everyday life. Again if the Scottish Government’s top-up was linked to receipt of means tested benefit then it too would come and go as families circumstances changed. The real difficulty would be keeping up to date with who is and who isn’t entitled to these means tested benefits. Much of this information is held by the DWP or HMRC so making the Scottish Government dependent on those agencies ability and willingness to share that information in a timely way.
So while any use of new powers that significantly boosted family incomes in Scotland would be welcome there are strong arguments for prioritising a £5 top-up to universal child benefit.
Above and beyond administrative and practical concerns topping up child benefit would send a powerful signal that all children in Scotland are worthy of support. In terms of Scotland’s relationship with its social security system, sending a message like that could be invaluable.