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Annex A
Poverty in Scotland: a brief overview of the evidence
General
1. There are 880,000 individuals living in relative poverty before housing costs in Scotland. This represents 18 per cent of the population i.
2. There are 990,000 individuals living in relative poverty after housing costs in Scotland, representing 20 per cent of the population i (all other figures throughout this document are on a 'before housing costs' basis).
3. Nine per cent of the British population are in persistent poverty ii, defined as being poor in 3 out of the last 4 consecutive years.
4. The number of people in poverty in Scotland has fallen by 10 per cent in the last 10 years. The reduction has been greatest amongst children and pensioners. However last year the number of working age adults in poverty rose by 10,000 i.
Chart 1: Number of people in poverty, Scotland 1995/96 - 2005/06
Source: Family Resources Survey, Households Below average Income datasets.
5. Individuals in working families form a large proportion (38 per cent) of the poorest in Scotland, even though the risk of poverty is far higher for those in workless families (35 per cent of people in workless families are poor compared to 10 per cent of people in working families) i.
6. There is little difference between urban and rural areas in the prevalence of poverty i although there may be some difference in how people in rural areas experience poverty as some goods are more expensive in rural areas iii and some services are less convenient to access iv. The Scottish Government is currently undertaking a literature review on the difference between urban and rural experiences of poverty.
7. Children who grow up in poor households are more likely to have low self-esteem, play truant, leave home earlier, leave school earlier and with fewer qualifications, and be economically inactive as adults v. Consequently, children born into poor families are more likely to be poor adults.
8. One hundred and thirty thousand children in Scotland live in households that are both relatively low income and materially deprived, according to the definition used by HM Treasury and the Department for Work and Pensions i,vi.
9. Poverty levels in Scotland are similar to the UK as a whole. They are lower than in Ireland but higher than all other countries in the Arc of Prosperity. The table below shows the levels of economic growth and poverty in these countries. A number of countries, such as France, Austria, Greece and Hungary, have demonstrated that economic growth can be achieved alongside a reduction in poverty.
Table 1: GDP and Poverty in Scotland, the UK and The Arc of Prosperity Countries
| Percentage GDP Growth 1995-2005 | Percentage of people in poverty 1995 | Percentage of people in poverty 2005 |
|---|
UK | 2.8 | 20 | 18 |
|---|
Scotland | 2.5 | 20 | 18 |
|---|
Ireland | 7.5 | 19 | 20 |
|---|
Iceland | 4.3 | - | 10 |
|---|
Norway | 2.8 | - | 11 |
|---|
Denmark | 2.1 | 10 | 12 |
|---|
Sweden | 2.7 | 8 | 9 |
|---|
Finland | 3.5 | 8 | 12 |
|---|
Source: Paichaud, D., Mangen, S., and Burchardt, T (2007) Tackling Poverty and Disadvantage: Arc of Prosperity and Other Countries, paper produced for the Scottish Government.
Education and Employment
10. If a family member is in paid employment the risk of poverty to that family is much reduced, although there are many in-work households that remain in poverty due to low wages and/or large families i. Over 50% of children in poverty live in a household where at least one adult works
11. The rate of worklessness for working-age households in Scotland is 16 per cent vii.
12. Over 500,000 Scottish employees are low paid (paid less than 60 per cent of the median full-time hourly wage), representing almost 24 per cent of working people. The chance of being low paid is greatest for women, part-time employees, private sector employees, young people, disabled people and some ethnic minority groups viii.
13. Temporary, seasonal employment is a particular issue in rural Scotland and self- employment rates are high. In remote rural Scotland the highest proportion of workers are in the primary sector (agriculture, forestry and fishing.) ix,x Furthermore, in remote rural areas 8 per cent of people have more than one job compared to 3 per cent in large urban areas xi.
14. In 2007 median hourly pay for adults in full-time employment was 12% lower for females than for males xii.
15. The lower a person's qualifications the higher their risks of being out of, but wanting work, or being in low paid work xiii.
16. As there is a strong relationship between education and employment so there is a strong relationship between education and poverty: 27 per cent of people with no qualifications are in poverty compared to 13 per cent with qualifications i.
Chart 2: Percentage of people employed by highest qualification, Scotland 2006
Source: Annual Population Survey (Jan-Dec) 2006, Office for National Statistics.
ILO = International Labour Organisation. The ILO definition of unemployment covers people who are out of work, want a job, have actively sought work in the previous 4 weeks and are available to start work within the next fortnight; or out of work and have accepted a job that they are waiting to start in the next fortnight.
17. Around 77 per cent of school leavers from the ten per cent most deprived areas entered a positive destination (further or higher education, employment, training or voluntary work) in 2006/7 compared with just over 93 per cent of those from the ten per cent least deprived areas xiv.
18. The proportion of 16-19 years olds not in employment, education or training has not changed significantly over the last 15 years, as the graph below illustrates. Data for the latest year indicates a slight drop. Other evidence from school leavers destinations statistics and from the Department of Work and Pensions benefit statistics also suggest that this group has reduced in recent years.
Chart 3: Percentage of 16-19 Year Olds Not in Employment, Education or Training 1992-2006
Source: 1992-2002 Labour Force Survey ( LFS), Quarters combined, 2003 - Annual Scottish Labour Force Survey, 2004-2006 Annual Population Survey
20. The recent OECD report Quality and Equity of Schooling in Scotlandxv highlights the strong influence that socio-economic status has on student performance in Scottish schools. The report notes that the big factor that impedes the ability of Scottish children to use school effectively is socio-economic status. This factor is more complex and broader than poverty, concerning the relationships between individuals and institutions and relating to cultural attributes and practices - family values, child rearing, language development, health and physical wellbeing, aspirations, and financial capacity.
Housing
21. Families who own their own home makeup 47 per cent of the poorest people in Scotland, even though the risk of poverty is far greater for families that do not own their own home (12 per cent of families who own their own home are poor compared to 31 per cent who do not) i.
22. A household is in fuel poverty if it would be required to spend more than 10% of its income on household fuel. 'Extreme Fuel Poverty' can be defined as a household having to spend more than 20% of its income on fuel.
23. Twenty-four per cent of households are fuel poor and 8 per cent are extremely fuel poor. The rate is much higher for single pensioners, of whom almost half are fuel poor. The number of fuel poor households has been rising steadily since 2002, although numbers are lower than a decade ago xvi.
24. Over 40,000 households were homeless in 2006/07 xvii (homeless people are not included in the official poverty statistics xviii) and around 3% of families live in overcrowded conditions xix.
Disability, Health and Mortality
25. Almost 310,000 people (7 per cent of the population) claim Incapacity Benefit or Severe Disability Allowance in Scotland. A further 30,000 claim Attendance Allowance or Disability Living Allowance xx.
26. There is now considerable evidence to show that lack of work can be a major driver of ill health. 5
27. The risk of poverty is far higher if a household contains a disabled adult: 23 per cent compared to 15 per cent for non-disabled households i.
28. Two per cent of working age people become disabled each year xxi.
29. People with less autonomous, less secure working conditions and lower earnings are more likely to develop an illness which limits their capacity to work xxii.
30. Life expectancy is 70 years in the 10 per cent most deprived areas of Scotland compared to 81 years in the 10 per cent least deprived areas xxiii.
31. Deprived populations have considerably higher levels of Coronary Heart Disease mortality. The Standardised Mortality Rate for under 75s in Scotland's 15 per cent most deprived areas is 110.2 per 100,000 compared to 61.8 per 100,000 in Scotland overall xxiii.
Debt and Financial Exclusion
32. Ten per cent of Scottish households report not managing financially xxv.
33. Five per cent of families do not have a bank or building society account xxv.
34. Forty-two per cent of families living in rented accomodation do not have contents insurance, compared to 2 per cent of families who own their home xxv.
35. Citizen's Advice Scotland debt clients owe an average of £13,380. Over half have no income other than pensions or benefits xxiv.
36. Twenty-seven per cent of households in the 15 per cent most deprived areas have savings or investments, compared to 58 per cent in the rest of Scotland xxv.
Crime, Disorder and Justice
37. There is little doubt that poverty is correlated with the risk of crime victimisation, with disorder and criminal activity, and with the likelihood of imprisonment. Those living in the most deprived areas of Scotland have higher levels of worry about being the victim of crime, and experience much higher levels of disorder and antisocial behaviour. The areas they live in have much higher levels of recorded crime, and men from these areas are much more likely to be imprisoned.
38. Over half (53%) of people in the most deprived areas are worried about being assaulted or mugged, compared with around one third (35%) in the rest of Scotland. xxvi
39. Nearly half (48%) of people living in the most deprived neighbourhoods experienced at least one form of antisocial behaviour, compared with around a third (34%) in Scotland as a whole. xxv
40. For the crimes included in the Scottish Index of Multiple Deprivation 2006, in the most deprived areas there was one crime recorded in 2004 by the police for every 9 residents, compared to one crime per 23 residents in the rest of Scotland. xxvii
41. Domestic abuse is more than twice as common amongst those with income of under £10,000 per year (7%) than amongst the overall population (3%). xxviii
42. For men, the imprisonment rate for those coming from the most deprived areas is four times higher than the Scotland average (953 per 100,000 males of all ages, compared to 237 per 100,000 males of all ages in Scotland as a whole).
Inequality and public perceptions of poverty
43. For the past 12 years, the lowest three income deciles have taken home approximately 14 per cent of the total income in Scotland. The top 3 deciles have taken home about half of the total income in Scotland. i
44. Over the last 20 years, a large and enduring majority of people (73 per cent in 2004) have considered the gap between high and low incomes too large. People do not necessarily think that those of low income are underpaid but that those on high incomes are overpaid. However a smaller proportion of people support income redistribution xxix as a way of reducing inequalities.
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