Taking Forward The Government Economic Strategy: A Discussion Paper on Tackling Poverty, Inequality and Deprivation in Scotland

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Key Areas for Action by the Scottish Government

43. We believe that levers available to the Scottish Government under the current devolution settlement enable us to tackle poverty in 3 broad ways. These recognise that many people are already in poverty and that there is therefore a need for actions which address the consequences of poverty, as well as measures to prevent poverty:

  • Prevention of poverty and tackling the root causes - these include addressing educational disadvantage and underachievement; tackling poor health; providing more choices and more chances for vulnerable young people at risk of disengagement; tackling worklessness - particularly deep-rooted pockets of inter-generational worklessness; providing the best start in the early years so that all children can achieve their potential; and regenerating our most disadvantaged communities suffering from concentrated deprivation.
    There are also deeper societal causes which need to be addressed; these are to do with the discriminatory attitudes and values underlying life in Scotland today, ranging from perceptions of class, the worth we attach to different kinds of employment and childcare (and the balance between the two), and the degree to which people are provided with genuine choices to access the opportunities offered to them, for example through the provision of effective support to families that allows parents to take up employment or further their education.
  • Helping to lift people out of poverty - for example, by improving employability (through more and better employment and through 'one door' employability services that provide clients with a joined-up package from Jobcentre Plus, economic development, health, social and childcare services) so that people can take advantage of the opportunities that economic growth will provide; improving individuals' mental wellbeing and resilience; enhancing the availability and quality of advice and information services; promoting benefit take-up to ensure that people entitled to benefits and tax credits maximise their incomes; helping people through key transition points in their lives (such as when they leave school, return to work, or leave the care system); tackling substance misuse and homelessness; and reducing re-offending.
  • Alleviating the impact of poverty on people's lives - for example, by increasing entitlement and encouraging the take-up of free school meals; through the abolition of prescription charges; by funding free personal care for older people; providing free bus travel for older people and discounted travel for young people; by tackling fuel poverty; by developing the concept of a 'living wage'; and through the introduction of a fairer Local Income Tax to replace Council Tax.

44. Key questions:

  • Are these three areas for action the right ones to adopt?
  • How should our efforts be balanced between them?

45. We also want to look ahead at the potential for fiscal action to reduce inequality and help lift people out of poverty if further devolution of powers from Westminster - and ultimately independence, as proposed under the National Conversation - brings greater powers to the Scottish Parliament.

46. It is clear that we need a portfolio of policies that will help the full range of people in poverty - and we need to link that in turn to the delivery of the GES and the Solidarity and other Golden Rules. Not all initiatives will impact on everybody in the same way, and not everybody has the same needs. For many moving towards or into sustained work will be a clear and relatively straightforward route out of poverty. For others who cannot work or are a long way from the labour market other interventions will be necessary.

47. Many of those in severe poverty, who are in the lowest income decile, may have multiple and complex needs which will require multifaceted and often intensive interventions. Others, like pensioners, may require support to maximise their disposable income through benefit take-up or reduction of essential living costs. In rural areas policies to combat poverty may link closely with the development of sustainable places and measures to enhance and protect the environment.

48. We also need to be clear about the respective roles and responsibilities of the Scottish and UK Governments. As indicated above, we believe the focus of the Scottish Government should primarily be on tackling the root causes of poverty - through action in areas such as early years, education, health, housing, employment and skills - as this is where devolved levers can have the greatest long-term impact.

49. In terms of lifting people out of poverty, the existing evidence shows that UK-wide policies on aspects such as tax and benefit arrangements (particularly the tax credit system) and the minimum wage have had the greatest impact on poverty in Scotland to date, but that devolved policies designed to help more people into work (particularly lone parents), to tackle poor health, and to improve skills and qualifications have played an important supporting role. However it appears that much of the impact of recent changes to UK tax and benefit systems has already been felt, that further progress on tackling poverty will require new policies and programmes, and that devolved and reserved policies will need to work together more effectively.

50. While we intend to focus on tackling the causes of poverty we also believe that Scottish Government policies have a potentially significant role to play in helping to lift people out of poverty. It is here that our policies and those of the UK Government (such as the Welfare to Work programmes managed by Jobcentre Plus) must complement each other to ensure that we move the greatest number of people into sustainable employment, both raising their household income above the poverty line and providing them with a long-term future.

51. We must also accept that we will not eradicate poverty overnight and that Scottish Government policies in a number of areas can help to improve the quality of life of people currently living in poverty - again in co-operation with the UK Government.

52. We currently have limited powers available to us under the devolution settlement to use fiscal policies to tackle poverty and income inequality. However we believe that our proposal to replace Council Tax with a fairer Local Income Tax has the potential to contribute to tackling poverty and income inequality, although we also know that it may not be sufficient on its own to lift many households out of poverty. We will be seeking views on our Local Income Tax proposals through a separate process and we will want to consider those views in conjunction with the views elicited from the discussion of this paper.

53. In discussion with stakeholders a vital question on which we will be particularly keen to get views is: to what extent are current policies and programmes fit for purpose? We will also be seeking views on:

  • Where the Scottish Government can contribute most to tackling poverty;
  • How we maximise the impact of these policies and programmes;
  • Where there may be gaps in these policies and programmes that need filling, and how they should be filled;
  • The balance of activity by the Scottish Government between the three key areas outlined above;
  • How well reserved and devolved programmes currently complement each other and any areas where co-operation can be improved;
  • The key barriers to greater partnership working and examples of how these can effectively be overcome;
  • Any areas where it is believed enlargement of the devolution settlement could improve the seamless provision of support and achieve a greater impact on poverty and income inequality;
  • The constituencies within Scotland, such as employers, with whom the Scottish Government should do more to influence thinking and action on tackling poverty.

Page updated: Friday, February 01, 2008