Executive summary

The report is published at a critical crossroads for Scotland, highlighting an increasing disconnect between the Scottish Government’s rhetoric and the reality for families living in poverty. New data for 2022-25 shows that 17% of people in Scotland were in poverty, including 11% in deep poverty and 7% in very deep poverty. Approximately two in five people in poverty are in the very deep poverty category. Relative child poverty remains high at 21%, and over nine in 10 children in poverty belong to one or more of the Scottish Government’s priority family groups. Despite some progress, the legal target to reduce relative child poverty to 10% by 2030/31 is set to be missed by a wide margin, as interim targets have already been missed.

Introduction

Poverty remains persistently high in Scotland, requiring government at all levels to step up to the challenge. This report focuses on the critical role that councils play in reducing poverty within their communities. It covers public perceptions of local services, the necessity for radical local government funding reform, and the available levers that councils should use to prevent and reduce deprivation. People in Scotland feel let down by politics, necessitating a fundamental rethink of how public services are funded and delivered.

Evidence used in this year’s report

The research relies on several evidence sources, including official UK poverty statistics from the Family Resources Survey (FRS). Additionally, the Joseph Rowntree Foundation commissioned a representative survey of 3,381 adults in Scotland, conducted by the Diffley Partnership in June 2026, to understand experiences of local services and opinions on funding. Qualitative evidence was gathered from the End Poverty Scotland Group (EPSG) and the Grounded Voices programme, which collected real-time data from participants living on low incomes to provide a detailed understanding of their lived experiences.

Poverty rates and progress on targets

In 2022-25, 17% of people (940,000) in Scotland were in relative poverty after housing costs. While overall poverty and deep poverty rates fell by one percentage point since 2021-24, very deep poverty has shown little change. Poverty has deepened over the last 30 years; the proportion of people in poverty who are in very deep poverty rose from 26% in 1994-97 to 43% in 2021-24. Child poverty rates are highest in minority ethnic families (47%), families with a baby (39%), and large families (38%). Work remains a protective factor, but is no guarantee of escaping poverty, as 66% of people in poverty live in a household where at least one person works. Furthermore, 72% of children in poverty live in a working household.

Local government has a critical role in reducing poverty

Scotland’s 32 councils are essential for delivering core services such as schools, housing, and social care. However, many residents feel that councils are underfunded and do not represent their communities well. Public service reform is currently a focus for senior politicians, but the report argues this must be grounded in poverty reduction rather than just achieving cashable savings. There is a disconnect between local government and the needs of low-income communities, exacerbated by years of austerity and single-year funding settlements from the Scottish Government.

Local successes and gaps

Some councils are successfully prioritising poverty reduction by linking data to target support and using levers like economic development and housing. However, the Scottish public generally feels that councils’ efforts do not go far enough. Only 13% of people agree that their council is doing everything it can to reduce child poverty. Satisfaction is high for universal services like schools and leisure (around 75%), but lower for targeted support: only 46% are satisfied with debt advice services, 39% with council housing, and 36% with employment support. Many participants in the Grounded Voices programme reported barriers to accessing support due to a lack of proactive information.

Radical reform is needed

Faith in local government is low, with 60% of people disagreeing that their council listens to their concerns. There is significant public confusion regarding council funding: the public estimates that council tax makes up 36% of budgets (actual figure is 17%) and underestimates the Scottish Government grant at 30% (actual figure is 61%). Two-thirds of people believe councils receive too little funding. When asked how funding should be allocated, 50% suggested based on area deprivation and 49% based on the proportion of people in poverty. The report argues that the current funding settlement is unfit for purpose and requires a radical redesign to support poverty reduction efforts.

Recommendations

The report recommends that the Scottish Government urgently develop a bolder, properly funded plan to reduce poverty and set stretching, income-based statutory targets. It should also provide councils with stable, multi-year funding settlements and reform local government finance. Recommendations for local government include prioritising poverty prevention across all levers (such as transport and schools), providing joined-up local services through partnerships with the third sector, and significantly improving communication with the public by involving people with lived experience in decision-making.

Conclusion

To successfully tackle poverty in Scotland, the Scottish Government and local government must work more effectively both independently and in collaboration. This requires moving beyond blame games regarding funding levels and focusing on a comprehensive national plan backed by the right funding and radical reform. Councils in every part of Scotland must take new approaches to using their available levers to ensure more children grow up free from the constraints of poverty.