Monitoring poverty and social exclusion in Scotland 2007
December 2007
Following the publication of our December 2007 report for the UK as a whole, we were asked to prepare a note on some of the policy issues arising for the Scottish Executive/Government. This note is provided below. Note that the material is not a formal Findings and, as such, has neither been quality assured nor approved by the Joseph Rowntree Foundation.
The material in this note covers two particular areas where issues arise for
Scottish-specific policy consideration, namely income poverty and health.
Income poverty
The most commonly used threshold of income poverty is a household income that is 60% or less of the Great Britain average (median) household income in that year. This is the main threshold used by ourselves as well as by the UK Government, Scottish Executive and European Union. The latest year for which data is available is 2005/06. In that year, the 60% threshold was worth £108 per week for single adult with no dependent children; £186 per week for a couple with no dependent children; £182 per week for a single adult with two children under the age of 14; and £260 per week for a couple with two children under the age of 14. These sums of money are measured after income tax, council tax and housing costs have been deducted, where housing costs include rents, mortgage interest (but not the repayment of principal), buildings insurance and water charges. They therefore represent what the household has available to spend on everything else it needs, from food and heating to travel and entertainment.
Overall trends
Our overall finding for the UK as a whole is that progress on income poverty has now stalled. It is not clear that this finding applies with equivalent force to Scotland specifically.
First, whilst the estimated prevalence of income poverty in Scotland in 2005/06
(the latest data available) was slightly higher than in 2004/05, it is still
noticeably lower than in earlier years.
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Second, levels of income poverty in Scotland are actually lower than in most of the rest of Great Britain, the only exceptions being the affluent regions in the South of England (excluding London).
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Third, although the UK as a whole is still only around halfway towards the UK
Government's 2004/05 target of reducing child poverty by a quarter, this target
has almost been achieved in Scotland.
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Note that this difference between Scotland and the UK is not because the scale of the fall in child poverty has been uniquely high in Scotland. Rather, it is more because the lack of a fall in child poverty in London and the West Midlands has been uniquely low.
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As well as falling levels of child poverty, Scotland has also (like the rest of Great Britain) seen sharply falling levels of pensioner poverty.
By contrast, levels of poverty among working-age adults without dependent
children is higher than a decade ago. Indeed, working-age
adults without dependent children in Scotland are now more likely to be in
poverty than pensioners – this is an historic shift given that, a decade ago,
their risk of poverty was half that of pensioners.
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One of the reasons for the contrasting trends in poverty rates between groups is the UK Government's policy of raising benefit levels for both pensioners and families with children whilst simultaneously freezing those for working-age adults without dependent children.
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In-work poverty and low pay
In Scotland, as elsewhere in the UK, poverty is by no means confined to families who are workless. For example, getting on for half of all children in poverty in Scotland live in families where at least one of the adults is in paid work.
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Here again, however, the picture in Scotland does not compare unfavourably to
that for the UK as a whole. For example, the prevalence of low pay in Scotland
is a bit lower than in most of the rest of the UK.
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Three aspects of low pay in Scotland are, however, of particular note. The first
is that the geography of low pay is very different from that of worklessness and
deprivation more generally. More specifically, low pay is most prevalent in the
rural areas in the south and north of the country rather than in the central
belt.
The second aspect of note is that quite a high proportion of low paid workers in
Scotland (around a fifth) are directly employed by the public sector.
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Note that the analysis above also suggests that only a minority of low paid workers work in industries (manufacturing, finance, etc) which are potentially face international competition.
Also note that current arrangements mean that it would be quite expensive for local public sector employers (but much less so for the public sector as a whole) to do something about the low pay of their employees. This is because, for every extra pound that the employee gains, the extra cost to the employer is around £3. This, in turn, is because the other £2 goes to HM Treasury via increased income tax and national insurance plus reduced tax credits.
The third aspect of note is that very few low paid workers in Scotland are members of a Trade Union.
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Finally, disadvantage at work in Scotland is by no mean confined to just low pay. For example:
- Job insecurity: two-fifths of people who find work no longer have that work six months later.
- Access to training: those with no previous qualifications are much less likely to receive training than those with some qualifications.
- Pension provision: more than half of employees on below-average incomes are not contributing to a non-state pension.
Policy issues arising
As the analysis above illustrates, Scotland's poverty situation does not compare unfavourably with that for the UK as a whole. As a consequence, it could perfectly well be argued that there are no major policy issues arising for the Scottish Executive/Government. Furthermore, many of the key policy areas, particularly those relating to tax (including tax credits) and benefits (including eligibility rules as well as benefit levels), are currently the responsibility of the UK Government.
Such a position would, however, seem something of a missed opportunity given that the general political ambience in Scotland is arguably more concerned about the problems of poverty than its equivalent at Westminster. In this context, we would raise two groups of questions for policy:
- Could the Scottish Executive/Government not be more proactive in lobbying Westminster on some of the issues? For example, what is its stance towards the UK Government's longstanding policy of freezing benefit levels of those without dependent children?
- Could the Scottish Executive/Government not take a lead in those areas where it could potentially make a real difference, most notably regarding the quality of jobs (as discussed above and wider than just low pay) as well as their quantity (where the recent record in Scotland is good, as elsewhere in the UK)? For example, how about doing something about the fifth of all low paid workers who are currently directly employed by the public sector?
Ill-health
Analysis
While the rates of premature death have fallen over the last decade, they are still much higher than in any other part of Great Britain.
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29 of the 32 local authorities have higher premature death rates than the average for England and Wales.
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In other words, Scotland's high rates of premature death are both
longstanding and across the country, not just limited to the well known case of Glasgow.
Scotland's relative ill-health is not confined to premature deaths. For example, on the very different subject of dental health among children, all parts of Scotland except Forth Valley have, on average, more missing, decayed or filled teeth among their 5-year-olds than the England and Wales average.
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Policy issues arising
Health is a fully devolved area of policy. As such, policies for improving Scotland's health lie with the Scottish Executive/Government.
Talking to public health professionals in Scotland, it is widely agreed that there is a 'Scottish effect' in relation to health. In other words, taking any comparable groups and comparing Scotland with either England and Wales, or with the European Union, Scotland tends to fare worse, and often much worse.
What is much less clear is the cause of this 'Scottish effect'. It is presumably not to do with the quality of health services in Scotland, where spending is higher than in England or Wales. So, it is presumably more to do with issues of lifestyle and behaviour.
Unless the causes are properly understood, it is difficult to see how practical solutions can be developed. In this context, we would raise two groups of questions for policy:
- Are Scottish Executive/Government policies for improving health based on a full understanding of the causes of 'Scottish effect'? Do they, for example, understand why premature death rates are so much higher in Scotland than in England or Wales? What reason is there for believing that the current set of policies will have a substantial enough effect to bring Scotland more into line with England and Wales? Alternatively, are Scottish Executive/Government targets in danger of being too optimistic?
- Should policy focus equally on the whole of the Scottish population (as it largely seems to currently) or does it require particular attention to health inequalities between different groups in the populations? Should it aim to cover all aspects of health or would it be more practical to focus on developing particular solutions to particular problems (such as the high death rates among those aged 55-64, the children's dental health, etc)?