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CHILD POVERTY IN SOCIAL INCLUSION PARTNERSHIPS

APPENDIX ONE DEFINING INCOME

The purpose of this technical appendix is to clarify certain aspects of the analysis which could not be outlined in any detail within the main text of the report. We have mentioned in numerous places throughout this report that our methodology and definitions would follow those used by the Department for Work and Pensions in their work and annual reports on the Household Below Average Income (HBAI) data sets. However, the Scottish Household Survey does not collect exactly the same data as that gathered by the HBAI and so some discrepancies can occur when attempting to replicate certain key variables and information for cross comparison between the 2 data sources. Thus, this section will clarify and highlight those differences, to help ensure that incorrect conclusions are not inferred from the analysis.

Definition of Income

Income is the key driver behind all of the analysis presented in this report and it is therefore essential that due care and consideration are given to its definition and calculation and that any important points are duly flagged up. Our definition of income used for the Scottish analysis is annual net (i.e. disposable) income of the household after housing costs. Before proceeding to a description of the actual components of income, an important difference needs to be highlighted here with the definition used in the HBAI analysis. The Scottish Household Survey does not include the incomes of any other people in the household other than the highest income householder and his/her spouse/partner. If other adults are living in the household then their income is not recorded and subsequently it cannot enter into the calculation for net disposable income. Thus, there will be a serious bias in the calculations of income for large households consisting of more than 2 adults within the SHS. The HBAI data set on the other hand records data on income for all individuals within the household.

The actual components of income that make up total income within the 2 data sets are listed below.

For the HBAI data, gross income is made up from the following sources:

(HBAI report 2000, page 193, Appendix 1)

2. Usual net earnings from employment
4. Profit/loss from self employment
6. All social security benefits
8. Income from occupational and private pensions
10. Investment income
12. Maintenance payments (if a person receives them directly)
14. Income from educational grants and scholarships
16. Cash value of (free school meals, free welfare milk, free school milk)

NET disposable income consists of gross income net of the following:

2. Income tax payments
4. National Insurance Contributions
6. Domestic rates/council tax
8. Occupational pension schemes contributions
10. Personal pension schemes
12. Maintenance and child support payments
14. Parental contribution to students living away from home

For the SHS , annual gross income is made up of:

2. Usual net earnings from employment
4. Income from income support
6. Income from family credit
8. Income from jobseekers allowance
10. Income from housing benefit
12. Income from council tax benefit
14. Income from earnings top-up
16. Income from child benefit
18. Income from lone parent child benefit
20. Income from maternity allowance
22. Income from state retirement pension
24. Income from maternity pay
26. Income from other state benefit
28. Income from widows pension
30. Income from incapacity benefit
32. Income from disability working allowance
34. Income from DLA Care Component
36. Income from DLA Mobility
38. Income from injury/disablement benefit
40. Income from Invalid care allowance
42. Income from Severe Disablement benefit
44. Income from statutory sick pay
46. Income from war disablement benefit
48. Income from IS/HB disability premium
50. Income from attendance allowance
52. Income from other disability benefit
54. Income from non-state pension
56. Income from annuity
58. Income from maintenance payments
60. Income from rent
62. Dig money
64. Income from accident/sick scheme
66. Income from investments
68. Student loan
70. Income from grant
72. Other misc. income

NET income is gross income (all of the above) net of

2. Income tax payments
4. National Insurance Contributions
6. Occupational pension schemes contributions
8. Personal pension schemes
10. Union dues
12. Other unspecified deductions

Thus, the main differences in "income" between the 2 data sets are:

• Domestic rates/council tax omitted from SHS definition of "NET"
• Maintenance and child support payments omitted from SHS definition of "NET"
• Parental contribution to students living away from home omitted from SHS definition of "NET"

These differences, taken together with the important omission of other adults' income in households larger than 2 adults, highlight the fact that cross comparison of income calculations between the 2 data sets is impossible. This should be borne in mind at all times when drawing conclusions from the analysis.

It is very common in applied work within the area of poverty research to further refine the definition of income to exclude a measure of housing costs. We also adopt this convention. However, as before, the measure of income after housing costs (AHC) for the HBAI differs from that for the SHS.

The HBAI definition of housing costs that are subtracted from net disposable income consists of the following:

• Rent (gross of housing benefit);
• Water rates, community water charges and council water charges;
• Mortgage interest payments (net of tax relief);
• Structural insurance premiums (for owner occupiers);
• Ground rent and service charges

For the SHS data, information on council water charges, structural insurance premiums and the community charge are not recorded. The SHS does not collect data on council tax bands either, so a charge cannot even be inferred or imputed for any of the households within the SHS data sets. Thus, the housing costs subtracted from annual net income within the SHS are:

• Rent (gross of housing benefit)
• Mortgage Interest Payments

Once these costs have been subtracted we have a value for annual net disposable income after housing costs.

These differences in the treatment between the SHS and HBAI meant that the estimates of child poverty rates differed between the 2 surveys. Consequently, where the incidence of child poverty was calculated using SHS data, an adjustment was necessary to bring it into line with that produced by HBAI. The adjustment factor that was applied to the SHS estimates was that which was necessary to produce total child poverty rates that were the same as those for Scotland as a whole for each of the 3 income poverty thresholds. These totals were 19 per cent for children below 50 per cent of median income, 29 per cent for children below 60 per cent of median income, and 38 per cent for children below 70 per cent of median income (see Table 3.3). The data to which this adjustment factor was applied are urban versus rural child poverty rates (Table 3.9) and SIP versus non-SIP child poverty rates (Table 4.2).

Equivalised Income

The measure of income calculated as above must go through one further adjustment before it can be used for analysis. This adjustment is called equivalisation where the income figure for the household is adjusted to reflect the household's size and composition because different households of different size will require a different level of income to achieve the same standard of living. This adjustment is carried out using equivalence scales which have been constructed to take into account the different sizes and compositions of households.

The scales we used are the McClements Scales which are identical to those used in the HBAI report and are given in the following table ⁸.

Table A1 McClements Equivalence Scales (AHC)

Source: HBAI Report (2000)

Equivalence scales need to have a reference point or family/household to which other incomes can be adjusted. Most scales take a couple household as the reference point (i.e they have an equivalence or weighting of 1 viz. (0.55+0.45)) so that households with just one member will have their income increased relatively speaking and a large family will have there income reduced relatively speaking.

Thus a household consisting of a head, spouse and one child aged 1 year old would have a weight of 1.09 (0.55+0.45+0.09).

Mentioned earlier was a problem of non-reporting of additional adult income in households of 3 adults or more. This has consequences for the equivalisation of household income in that weights cannot be attached to every person in the household as not every person's income was reported. Consequently, for households of 3 adults or more the weights attached to these households are the same as the weights attached to couple households as only 2 incomes are reported. To equivalise the income from large adult households using weights for ALL adults would lead to the equivalised income being seriously under reported.

Imputation of Key Variables

In any large scale data set such as the SHS or HBAI there are inevitably a number of missing values for some data. This tends to be most common for questions relating to income, housing costs, benefit income etc and other such 'sensitive' data. Within the SHS 34% of all income data (including benefit income) has been imputed. In other words, households who did not provide sufficient income data had a value assigned to them. For the SHS, this imputation was carried out by System 3 Ltd, one of the 2 SHS survey firms.

When our research team started to interrogate the SHS data we found that a significant proportion of households were also missing data for their housing costs. Thus we were missing data on gross rent as well as mortgage payments. Given, that the research has to operate at a small spatial scale we felt that we could not ignore this problem and opted to impute housing costs for those households who did not provide such data. Our preferred method of imputation was via 'Hotdecking' as practiced by the Department for Work and Pensions, who produce the HBAI data set.

Hotdecking is a procedure of assigning data to households with missing values from households with similar characteristics who did provide the required data. To carry out this procedure manually is a huge time consuming task so to avoid this the research team purchased a piece of software called SOLAS v3.0 for Missing Data Analysis, that automates the process of data imputation. In order to impute the data we then had to select some household characteristics that could then be used to extract a value for the missing data. To this end we used area of residence, property type and age of highest income householder to select households for the imputation of mortgage payments and property type and area of residence for imputation of gross rent. The missing values were replaced and the analysis proper could then proceed.

APPENDIX TWO SOCIAL INCLUSION PARTNERSHIPS AND ELSEWHERE COMPARED

Chapter Four summarises some of the most important social and demographic differences between children living in Social Inclusion Partnership areas and children living in other parts of Scotland in 1999/2000. For the record, this Appendix includes additional statistical data comparing SIP areas with non-SIP areas.

Table A4.1 Composition of households with children by socio-demographic characteristics by location of residence in, 1999/2000 (% of children)

The figures are arranged in columns. HIH is highest income householder.

Source: SHS 1999/2000 (own analysis)

Table A4.2 Composition of households with children by work and family status by location of residence in 1999/2000 (% of children)

The figures are arranged in columns.

Source: SHS 1999/2000 (own analysis)

Table A4.3 Composition of households with children by savings and investments by location of residence in 1999/2000 (% of children)

* These percentages include only children living in households that did have savings

The figures are arranged in columns.

Source: SHS 1999/2000 (own analysis)

Table A4.4 Composition of households with children by selected assets by location of residence in, 1999/2000 (% of children)

The figures are arranged in columns.

Source: SHS 1999/2000 (own analysis)

APPENDIX THREE QUALITATIVE RESEARCH METHODS

The qualitative component of this research into child poverty in Scotland falls into 2 parts: an initial telephone survey to collect information on SIPs' work; and interviews and documentary analysis in 4 case study areas.

Telephone Survey

Managers of all area-based and thematic SIPs were contacted during July and August 2001 to obtain initial information on child poverty through a telephone survey. The objective was to use this data to assist in the selection of 4 case studies.

The telephone survey included questions on the extent to which SIP managers saw child poverty as within the SIP's remit, their perceptions of 'child poverty' and brief details of child poverty initiatives they would highlight.

The survey was completed by 41 SIP managers or their representatives: 6 SIPs could not be contacted in the time available and one refused to participate.

Case Study Selection

Following the telephone survey, 4 SIPs were selected for more detailed consideration using a case study approach. The aim was that the case study SIPs should exemplify different approaches to tackling child poverty. The research team were looking for at least one thematic SIP, at least one rural SIP and at least one SIP operating outside the Scottish central belt. Area SIPs were only considered for selection if they had identified a range of initiatives tackling child poverty in their areas. The 4 case study SIPs finally selected were:

• Dundee Xplore;
• Greater Govan;
• Blantyre and Hamilton; and
• East Ayrshire.

Xplore is a thematic SIP focusing on young people at risk of exclusion in Dundee. The 3 remaining are area SIPs, although the focus of the Blantyre and Hamilton area SIP is young people up to age 25.

Case Studies

Interviews were conducted with the SIP manager in each of the 4 case studies, and with key partners and project staff identified in consultation with the SIP manager. The interviews were intended to gain a deeper understanding of the nature of child poverty in the SIP, of the efforts being made to tackle child poverty and of any perceived barriers to tackling child poverty.

A total of 23 individuals were interviewed on child poverty in the SIP areas. Of these, 4 were with SIP managers, 3 were with SIP staff, 11 were with SIP partners and the remaining 5 were with project managers or staff. In addition documentation on the SIP and its associated projects was collected and reviewed.

It should be noted that while interviews could not always be achieved with representatives of the selected projects, the selected initiative's aims and achievements were in each case explored with SIP staff and partners. Details of selected projects in each SIP are given below.

Dundee Xplore

Because of the different way of working, the Xplore SIP manager did not identify any child poverty initiatives during the telephone survey.

The research draws on interviews with the SIP manager, 3 SIP staff and 2 partners. The partners were representatives of the local authority departments of Neighbourhood Resources and Strategic Planning.

Greater Govan SIP

In the initial telephone survey of SIP managers 5 key initiatives were identified as tackling child poverty. These were:

• children's rights project (Govan Law Centre);*
• credit union (Greater Govan Credit Union);*
• ethnic minority outreach (Govan Housing Association);*
• healthy living centre (in development);
• key skills for parents (Cardonald College).

Additionally, it was pointed out that children in poverty benefit from a range of community facilities. The initiatives above which are asterisked were selected for further consideration by the research team. Difficulties with access meant that this case study draws on interviews with only the SIP manager, the ethnic minority outreach worker and 2 partners. The partners were representatives of Greater Glasgow Health Board and Glasgow City social work department.

Blantyre and North Hamilton SIP

During the telephone survey the SIP manager identified 6 key initiatives tackling child poverty in the SIP area. These were:

• best fed babies programme;*
• cashless school meals;
• community intermediary job access;
• family centre;*
• lone parent personal development project; and
• youth credit union (under development).*

The initiatives above which are asterisked were selected for further consideration by the research team. The research draws on interviews with the SIP manager, 5 partners and 2 project staff. The partners were representatives of the South Lanarkshire Council's strategic services, social work and education departments and also included a Health Board interviewee.

East Ayrshire Coalfields area SIP

During the telephone survey the SIP manager identified 8 key initiatives tackling child poverty in the SIP area. These were:

• credit union;*
• EASY project;
• recreation project partnership;*
• money advice project;
• support for people into work;
• teenage pregnancy project;*
• YIP world;* and
• young carers project.

The initiatives above which are asterisked were selected for further consideration by the research team. The research draws on interviews with the SIP manager, 2 Board partners and two project staff. The partners were representatives of East Ayrshire LHCC and East Ayrshire Council's Educational and Social Services department.

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