Deprivation prevented by introduction of Scottish child payment, first cross-nation study finds

• Deprivation and food insecurity would be “between 8 and 9 percentage points higher without Scottish child payment”
• ‘Cliff edge’ work disincentive fears also “overplayed”, say economists
• New evidence backs case for Scottish child payment Budget boost

Emerging evidence from a research project bringing together economists and social policy academics from the Universities of York, Glasgow and the London School of Economics and Political Science (LSE) has found “statistically significant reductions in both child material deprivation and food insecurity relative to England, after the introduction of the SCP (Scottish child payment).”

By comparing trends north and south of the border the researchers find that the effects of the Scottish child payment (SCP) are “considerable in size” and “that both material deprivation and food insecurity would have been between 8 and 9 percentage points higher in Scotland without the SCP.” This equates to over 70,000 fewer Scottish children in either material deprivation or food insecurity than would have been the case without the payments.

The findings are based on analysis of the DWP’s UK-wide Family Resources Survey. Alongside interviews with low-income families in Scotland and in England they offer the first comparative study across UK nations of the impact that the unique Scottish child payment is having. The payment is already widely credited with lifting at least 40,000 children out of poverty at a time when child poverty across the UK continued to rise.

‘Cliff edge’ work disincentive fears “overplayed”

In separate analysis the research team explore the impact of the ‘cliff edge’, the point where a small increase in earnings could take families above the eligibility threshold for Scottish child payment leading to an overall loss of income.

Ministers and others have expressed concern that this ‘cliff edge’ could act as a disincentive to parents to increase their earnings, and that any boost to the value of the payment would increase the disincentive.

However, the researchers find no evidence to suggest that the Scottish child payment has reduced labour supply. The analysis shows that only a small share of families have incomes that position them close to the cliff-edge. A lone parent or a sole earner in a couple could work at least 39 hours a week at national minimum wage before reaching the cliff-edge. Second earners in families not in receipt of housing support are most exposed: the cliff-edge falls between 9-41 hours of work for partners of full-time minimum wage earners, depending on parental age and number of children. However, a comparison of labour market participation and hours worked among families on both sides of the border finds no labour supply impact in practice, including among second earners. The researchers conclude that “concerns that the SCP creates work disincentives are overplayed.”

Professor Emma Tominey from the University of York led the research. She said: “Our study of families’ experiences in England and Scotland is clear in suggesting that the Scottish child payment is having a significant impact in reducing family hardship, child deprivation and food insecurity. Fears that the payment creates a work disincentive are also overplayed. There is no evidence that the SCP creates meaningful work disincentives - partly because for many families the cliff-edge exists at such a high level of hours worked as to make any potential constraint non-binding.”

Professor Kitty Stewart, Department of Social Policy and Associate Director of the Centre for Analysis of Social Exclusion (CASE) at LSE was part of the project team. She said: “Our results show that things are easier for Scottish families relative to English families as a result of the SCP. But wider pressures mean material deprivation is still rising both north and south of the border - just less quickly in Scotland. To make a bigger difference, the Scottish Government should build on its investment so far and increase the value of the payment.”

Access both papers on the CASE website here:

CASE paper 238:  Investing in Children: Early findings on the difference the Scottish Child Payment makes to child well-being

CASE paper 239:  Does The Scottish Child Payment Weaken Work Incentives?