£10m set aside for benefit cap offset to be reinvested in tackling child poverty

Millions of pounds that had been earmarked to offset the two-child benefit cap in Scotland will now be spent on tackling child poverty, the Scottish Government has announced.

A total of £10 million has become available following the UK Government’s decision to scrap the cap from April 2026.

In the run-up to next week’s budget, the Scottish Government has announced the majority of the funds will be split between charities and government programmes that provide emergency financial support to families.

This includes £5.5 million for the Scottish Welfare Fund, which provides people on low incomes with emergency grants if they are facing crisis or homelessness.

Just over half a million pounds will go to Aberlour Children’s Charity and £1.5 million to Children First, to provide extra emergency support for families in crisis.

Meanwhile, £1.5 million will be given to the Corra Foundation to distribute additional emergency funds, while a further £1 million will support Government schemes aimed at tackling child poverty.

Speaking during a visit to Children First on Thursday, John Swinney said tackling child poverty will be “at the heart” of next week’s budget.

“When I became First Minister, I said that I will pursue priorities that will make Scotland the best our country can be, and the most important priority that I have pursued in government has been that of eradicating child poverty,” he said.

“We have made progress. Scotland is the only part of the UK where relative child poverty rates fell in the last year.

“Our investment in a more dignified and generous social security system, funded childcare, free school meals and free bus travel for under-22s is putting more money in families’ pockets.

“However, as we start 2026, there are still far too many children in Scotland growing up hungry, or cold, and unable to reach their full potential. That is unacceptable.

“Today’s announcement will provide some immediate short-term relief for individuals and families facing the most challenging of circumstances.

“Our local authorities and charities have well-established means of getting support out quickly to people in need.

“Next week we will set out in more detail our intention to put tackling child poverty at the heart of the next Scottish budget and I look forward to unveiling landmark interventions to drive this work forward.”

The chief executive of Children First, Scotland’s national children’s charity, Mary Glasgow, said the additional support would enable her charity to offer “life changing and immediate support” to thousands of children.

She continued: “Through our national support line we will be able to reach more children and families to offer the financial, practical and emotional support they need to improve their circumstances and tackle the hardships they face in the short and longer term.

“Any family in Scotland in need of help can contact Children First’s friendly, specialist support line team 365 days a year by calling 08000 282233 or starting a web chat at www.childrenfirst.org.uk/supportline.”

Aberlour chief executive Justina Murray said she was was “delighted” with the additional funding, which she said would support Aberlour’s urgent assistance fund.

“We know that families living in poverty particularly struggle with the cost of living during the winter months, with the post-Christmas period particularly challenging and often very bleak,” she said.

“This additional funding will be used to provide emergency cash grants via our UAF to families in desperate need for essentials like heating, food, warm clothing and bedding.

“This generous contribution by the Scottish Government will ensure that around 1,660 families living in poverty will have the basic essentials they need this winter such as food on the table, adequate clothing for their children and a warm home at night.”