A Preliminary Investigation into Modelling the Impact of Measures to Reduce Child Poverty in Scotland

The Child Poverty (Scotland) Act provides targets for child poverty that must be reached by 2030/31. The next Child Poverty Delivery Plan, setting out the next tranche of policies to move towards the targets is due in Spring 2022. One crucial element of the success of this plan will be the extent to which it can demonstrate progress towards the targets. To do this requires a modelling approach that takes account of a range of factors across a range of policies related to social security, housing and work. In addition, the cost and implications across the wider economy are also critical pieces of information that will ensure a credible plan is in place to meet the targets. This modelling capacity was not available for the last Child Poverty Delivery Plan in 2018, meaning that it was not possible to judge the extent to which progress towards the targets would be met. With the devolution of new powers over the course of the last parliament, there is an urgent need for the development of modelling capacity to fulfil the requirements of policy makers and stakeholders in this area. Building the modelling capacity which adequately takes into account the specifics of the devolution settlement and Scottish context is a significant undertaking. The Poverty and Inequality Commission, in funding this work, have allowed the Fraser of Allander Institute (FAI) and Manchester Metropolitan University (MMU) to build a modelling framework that can start to answer key policy questions with regards to how the child poverty targets can be met, along with the wider impact on the economy of the type of policies that will be required. This report provides an overview of the development of modelling capacity to date. It includes a linkage to a macrosimulation model to help understand the wider impact on the economy. This work is a significant step towards consolidating the knowledge and skills required for credible modelling for policy development and scrutiny ahead of the next Child Poverty Delivery Plan. However, the results, although based on robust data and modelling, are based on hypothetical policy scenarios. Therefore, this report on its own does to provide a credible route map for meeting the targets. With the development of this preliminary stage of model development complete, we now have a firm basis for future, more complex, modelling work that can provide helpful solutions to the question of how the targets could be reached. Although modelling cannot provide all the answers, and indeed some evidence gaps remain, it is a crucial tool in the development of evidence-based policy. This report provides a large amount of technical information to help provide sufficient detail required for those interested in the modelling approach. For others, the first three sections should provide enough of an overview for anyone who wishes to gain a basic understanding of how the work has been approached and the key (hypothetical) results based on this preliminary development work