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Published by Scottish Council for Voluntary Organisations

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Worst year in memory for living standards of families on low incomes


Despite ground-breaking financial support Scots families are still desperately struggling

A new report has found a widening gap between the cost of raising a child in Scotland and actual family incomes, despite the significant impact of Scottish government policies and lower childcare costs.

The report commissioned by the Child Poverty Action Group (CPAG) in Scotland from the Centre for Research in Social Policy at Loughborough University builds on calculations which find that across the UK it costs at least £160,000 to bring up a child at a socially acceptable standard of living.

However, inflation and real-terms cuts to UK benefits ean that families with children who have little or no paid work now receive under half what they need through universal credit and child benefit.

In Scotland, families benefit from a range of Holyrood policies, including the new Scottish child payment, to reduce these costs and to improve incomes. Alongside cheaper than average childcare this can reduce the net cost of bringing up a child by over a third for low-income families.

The report warns that in the past year, rising costs have made incomes less adequate relative to families’ needs throughout the UK. The shortfall has risen from around 30 per cent to 40 per cent below needs in Scotland, and from over 40% to over 50% elsewhere in the UK. 

John Dickie, director of the Child Poverty Action Group in Scotland, said “This important analysis confirms that Scottish government policies are making a big difference to families. But the harsh reality is that soaring inflation and real terms UK benefit cuts means the gap between incomes and the minimum cost of raising a child is widening horribly.

“It is absolutely vital that the finance secretary uses this week’s Scottish Budget to double down on support for children. At the very least he needs to ensure the Scottish child payment and other Scottish benefits hold their real terms value next year.

“Given the pressure on his budget he must also use his tax powers to increase the resources available to him to deliver the social security, childcare and employment actions that are needed to meet his government’s child poverty targets.”

Donald Hirsch, professor of social policy and director, Centre for Research in Social Policy, Loughborough University and co-author of the report, added: “2022 has been the worst year in memory for the living standards of families on low incomes, with costs soaring and benefits falling badly behind.

“It is unfortunate that the extra Scottish help, especially through the Scottish Child Payment, has only reduced the damage done, rather than making families better off overall.

“Nevertheless, the policies are having a big impact in these terms, and show that it is not just UK-wide policies that can make a difference to social security.”



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