Poverty inaction costs Scottish economy billions each year

The Herald Scotland

30-04-2025

Over half of that figure - £450 million – is spent on healthcare alone because of the detrimental causes hardship and hunger has on physical and mental health.
Researchers also found that the Scottish economy loses out on £2.9 billion each year because of reduced employment and lower productivity, with the impact of hardship hindering the chances of gaining employment.
Families interviewed by Trussell Trust for the report said that facing hardship led to deteriorating physical and mental health and had meant they were unable to afford transport or clothing to attend job interviews.
The report found that the public purse also loses out on more than £1.4 billion in income taxes each year and needs to spend an additional £405 million on social security payments as a result of poverty.
Across the UK, hunger and hardship costs £81 billion, with £64.4 billion specifically impacting England, £3.6 billion in Wales and £2 billion in Northern Ireland.
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The anti-poverty charity, which supports more than 1,200 food banks across the UK, has backed The Herald's campaign which urges the Scottish Government to increase the Scottish Child Payment to £40 per week to alleviate the hardship.
It also calls for the UK Government to scrap the two-child benefit cap, with Trussell also separately calling on UK minister to 'urgently rethink' planned welfare cuts to disability benefits.
Cara Hilton, senior policy and public affairs manager at Trussell in Scotland, said: 'Trussell's major new research demonstrates the huge impact of hunger and hardship on Scotland's public services and the cost of failing to act.
'The Scottish Government has significant powers to turn the tide on hunger and hardship and must take bold and decisive action in the Programme for Government next month, so no one else has to experience hunger and hardship under their watch.
Read more:
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UK welfare cuts to plunge thousands of disabled children into poverty
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'Not only is it the right thing to do, it's common sense for our economy.
'Scottish and UK Government's have both a moral and economic responsibility to act. There is no time to lose.
'At the same time, we are calling on Holyrood to use its voice to urge the UK Government to rethink its cruel cuts to disability benefits, which risk pushing more disabled people to the doors of food banks.'
Research from Trussell, published in October, found that 670,000 people are facing hunger and hardship across Scotland, including 170,000 children.
A Scottish Government spokesperson said: 'It was encouraging to see a five percent drop in the number of parcels distributed by Trussell food banks in Scotland for children between 1 April 2024 and 30 September 2024 compared to the previous year, which shows our policies are working. We know there is more to do however, our policies are having to work harder than ever to make a difference, against a backdrop of a continuing cost of living crisis, rising energy costs and UK Government decision making, all of which is increasing poverty and hardship for many families.
"To improve the response to the current crisis, our Cash-First approach to food insecurity enables people to choose the essentials they need whilst maintaining dignity.'
A spokeswoman for the Department of Work and Pensions (DWP) said: 'We have set out a sweeping package of reforms to health and disability benefits that genuinely supports people back into work and lifts people out of poverty, while putting the welfare system on a more sustainable footing so that the safety net is always there to protect those who need it most.
'Our £1 billion employment support package will unlock work as part of our Plan for Change, alongside increasing the Living Wage, boosting benefits, and introducing a Fair Repayment Rate to help more than a million low-income households on Universal Credit.'