Holyrood ministers have been urged to increase spending on benefits, despite the bill set to soar to almost £8bn by 2030.

SNP ministers have been warned they will need to urgently ramp up funding to prevent almost a quarter of Scottish children being trapped in poverty by 2030 - sending Holyrood on a potential collision course with Westminster over benefits.

The UK government has pledged to cut up to £5bn from the annual social security bill, in a controversial move targeting those in receipt of disability benefits.

First Minister John Swinney and Chancellor of the Exchequer Rachel Reeves Picture: Andrew Milligan/PA Wire | Andrew Milligan/PA Wire

The Scottish Government is poised to see its social security bill rise to almost £9bn by 2029, with the new calls for more funding to be put into policies poised to add more pressure on SNP ministers. Social security already makes up around 14 per cent of the Holyrood Budget.

The calls come ahead of the Chancellor’s Spring statement on Wednesday, in which Rachel Reeves is set to confirm a 15 per cent cut to UK government departments.

New analysis from the Institute for Public Policy Research Scotland (IPPR Scotland) think tank, has warned that – without urgent investment from ministers, more than 210,000 Scottish children – 22 per cent - will be trapped in poverty by 2030.

The study has suggested using the social security system further as a tool to lift families out of poverty.

Ms Reeves yesterday defended the cuts to disability payments south of the Border that will have a significant funding impact on the Scottish Government’s equivalent adult disability payment.

Ms Reeves told the BBC that the UK’s welfare bill was “going through the roof”.

Chancellor of the Exchequer Rachel Reeves. PIC: Yui Mok/PA Wire

The Chancellor added that “the big increase in the benefits bill is from more and more young people claiming sickness and disability benefits”, claiming that she does not “believe that there are one in eight young people in Britain today who actually can’t work”.

The Scottish Government has claimed progress is being “undermined” by actions taken at Westminster.

The warning comes as John Swinney’s government will publish figures this week showing if an interim target of reducing child poverty to 18 per cent or less was achieved. Figures from last year put the level at 24 per cent.

The First Minister has described eradicating child poverty as “the single most important objective” of the Scottish Government.

But he has faced criticism for failing to raise the flagship Scottish Child Payment in the upcoming Budget, other than to keep it in line with inflation.

Mr Swinney told The Scotsman’s The Steamie podcast that his government will not hike the benefit further due to concerns it could put off people seeking employment.

SNP ministers are currently drawing up plans to mitigate the UK government’s two-child benefit cap, which could cost as much as £200m of unallocated funding by 2030.

But IPPR Scotland has warned that a “business as usual” social security strategy would leave 22 per cent of Scotland’s children in poverty by 2030. The outlook looks worse in the rest of the UK, where without a change of course, 32 per cent of children could be in poverty at the end of the decade.

During their analysis, researchers considered a “better than best case employment scenario” in which no parent is paid less than the real living wage, unemployment among parents is halved, and 40,000 economically inactive parents – a full quarter of the total – are supported into work.

But the study stressed that this would require a massive expansion of Scottish Government funded employment services. Even if this were to be delivered, the child poverty target would still be missed, with 60 per cent more children in poverty than allowed by legislation.

The researchers have concluded that achieving the 2030 target is possible but only with additional spending. The most direct and targeted route for this spending would be to increase social security payments to families in or at risk of poverty.

IPPR Scotland modelled that doubling the Scottish Child Payment would add around £500m to the social security budget in 2030, and would lift 40,000 more children out of poverty, cutting the child poverty rate by an additional four percentage points.

Dave Hawkey, senior research fellow at IPPR Scotland, said: “Scotland is at a crossroads and must decide whether it is willing to take the necessary steps to eradicate child poverty – there is surely only one option.

“The social security system is an important safety net to catch families when hard times hit, but this is not its only role. Even when adults are working, many families need financial support to make ends meet.

“Child benefit and universal credit have a vital role to play, plugging a gap that the labour market cannot and ensuring that children have what they need to grow up healthy and secure.”

He added: “The Scottish government is in the early stages of developing its next child poverty delivery plan to cover the period up to 2030. It needs to set out the actions the Scottish Government will take to reduce child poverty and the impact they will have.

“The evidence is clear: to meet Scotland’s legal child poverty target, Scotland must commit additional fiscal resources to our shared priority of giving every child in Scotland a good start in life”.

SNP Social Justice Secretary, Shirley-Anne Somerville, said: “We are absolutely committed to meeting the 2030 child poverty targets, and will continue to do everything we can to deliver the change needed.

“Measures like the Scottish Child Payment which is forecast to benefit the families of over 330,000 children in 2025-26, are having a real impact – and the Joseph Rowntree Foundation has suggested that Scotland will be the only part of the UK to see child poverty fall.”

She added: “However we know there is more to do and our efforts are being undermined by the social security policies of the UK Government and policies like the two-child limit which is increasing poverty and hardship for many families.

“That is why in the coming financial year we will develop the systems necessary to effectively scrap the impact of the two-child cap in 2026 – which will lift thousands of children in Scotland out of poverty.”

SNP set for benefits spending collision with Labour to rescue poverty targets

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