Achieving child poverty target could cost £920m a year in benefits, report warns

Scotland could meet its 2030 child poverty target—but a report has warned that this could cost £920m a year in benefits, with “significant additional” spending also required to increase the number of parents in work.

Chris Birt, associate director at the Joseph Rowntree Foundation (JRF) in Scotland, said its research shows: “Holyrood has the chance to prove that it’s up to the task of not just setting lofty ambitions, but straining every sinew to deliver on them.”

The Joseph Rowntree Foundation examined the costs and impacts of different measures that could be introduced to tackle child poverty (Jane Barlow/PA). PA Media

The think tank said there would be financial benefits from getting more parents into employment, and from helping those with jobs to work more hours.

Doing this could increase tax revenues to the Scottish Government by £410m, it said, while cutting spending on universal credit by around £500 million a year.

With 240,000 children living in poverty in Scotland, the JRF produced what it described as a “toolkit” for parties running in the 2026 Holyrood election, setting out the impact different policies could have towards meeting the target of having less than 10% of youngsters in relative poverty by 2030–31.

The think tank said it had “deliberately not prescribed an exact course of action” but had instead “shown the required scale of action needed”.

To meet the target, the report said the next Parliament would need to “lift around 100,000 children out of poverty” – adding this would “require a laser-focused prioritisation”.

The Meeting the Moment paper stresses that none of the measures it considered would achieve the target on their own.

“Even a near quadrupling of the SCP (Scottish child payment) to £100 a week per child at an annual cost of £1.14 billion would see a child poverty rate three percentage points above the targets,” it said.

However it found increasing the SCP – which is given to low-income families for every child they have under the age of 16 – to £40 a week would have “the best poverty reduction impact per pound”.

This would cost an extra £190m a year – but on its own would only bring the child poverty rate down to 18%.

However the research found that by supplementing the benefit for families with babies and for single parents, and by boosting take-up to 100% of those eligible, when combined with other measures – such as boosting employment among parents in poverty – 90,000 youngsters could be lifted out of poverty, meeting the 10% target.

The report said: “This would cost an additional £920m in targeted child benefits in Scotland (as well as other costs associated with increasing employment).

“It would also increase tax revenues by £410m because of increased parental employment.

“Universal credit expenditure could also fall by £500m as demand for it falls due to higher incomes through work.”

Mr Birt said: “Whoever forms the next Scottish Government has the chance to change what it means to grow up in Scotland.

“To do so, they must meet the Parliament’s child poverty targets. Not only for Scotland’s children and their futures, but to show those who often feel overlooked and ignored by politics that trust can be rebuilt through actions.

“This analysis gives each political party a detailed map to help them reach a Scotland free from child poverty. They may choose to take different routes to get there. But whichever route they take will require every ounce of determination and demand action at scale.

“The actions of Westminster governments may help, or hinder, but Holyrood has the chance to prove that it’s up to the task of not just setting lofty ambitions, but straining every sinew to deliver on them.”

Social Justice Secretary Shirley-Anne Somerville said: “I welcome this report from the Joseph Rowntree Foundation.

“We are absolutely committed to meeting the 2030 child poverty targets and thanks to the actions we are already taking, families in the poorest 10% of households are estimated to be £2,600 a year better off in 2025-26 and this value is projected to grow to an average of £3,700 a year by 2029-30.

“However our policies are having to work harder in the current economic context and as a result of decisions taken by the UK Government, such as keeping the two-child limit on Universal Credit which are holding back Scotland’s progress.

“While the Joseph Rowntree Foundation predict child poverty will rise in other parts of the UK by 2029, they highlight that policies such as our Scottish Child Payment, and our commitment to mitigate the two-child limit, are behind Scotland ‘bucking the trend’.

“We will publish our third child poverty delivery plan by the end of March 2026, setting out the actions to be taken between 2026-2031 to meet the 2030 targets. We will continue working closely with stakeholders, including the Joseph Rowntree Foundation, to shape that plan.”