Some thoughts ahead of the Senedd Debate on Poverty

Two weeks ago Steffan Evans posted a blog which explored poverty and why it remains a pressing issue in Wales after twenty years of devolution. This week, Steffan’s blog explores some of the key themes that Assembly Members should consider ahead of the an individual member’s debate on poverty this Wednesday.

Poverty in Wales – the scale of the problem

Nearly a quarter of people in Wales live in poverty. That’s somewhere around 720,000 – 730,000. Despite the Welsh Government’s target of ending child poverty by 2020, the situation is in fact expected to deteriorate further. By 2020/21 it is estimated that a further 117,000 people will be living in poverty, with 60,000 of these expected to be children. If these forecasts become a reality 39% of children in Wales will be living in poverty 2020/21. Given both the short term and long-term impact of poverty on people’s health, wellbeing and life opportunities, there is an urgent need to act in Wales to resolve this problem.

Who’s living in poverty in Wales?

To end poverty in Wales it is important to develop a clear understanding of who is living in poverty. Children living in workless households are most at risk of living in poverty (72%), followed by adults in workless households (62%), social housing tenants (48%), Lone parents (46%) and people from non-white ethnic groups (39%).

In terms of the number of people in poverty however, people living with a disabled person are by far the largest group (310,000), followed by people living in working households (250,000) and social housing tenants (240,000).

To significantly reduce the number of people living in poverty in Wales there is a need to develop solutions that seek to reduce poverty not just within high risk groups but also within groups where there are a high number of people living in poverty.

What are the causes of poverty in Wales?

There are three primary drivers of poverty in Wales.

Unfair work

Whilst there has been a decrease in the number of people unemployed in Wales, we have seen a growth in job insecurity and a fall in real-terms earnings over recent years. These changes have pushed more working households into poverty. For example, between 2012-13 to 2014-15, and 2015-16 to 2017-18 the number of people living in poverty in households where all working age adults are in work has increased by 40,000 (from 100,000 to 140,000).

The Social Security System

Recent changes to the benefits system including the benefit freeze and the rollout of Universal Credit has significantly reduced family income. The cumulative impact of welfare reform has left households with children £5,250 worse off whilst it has left households with a disabled adult £3,150 worse off.

Living Costs

Low income households have been faced with significant increases in living costs in recent years. The average social rent has increased by £27.89 a week, bus fares have increased by 80% and a basket of food costing £25 in 2010 now costs £31.49. This has put a real squeeze on low income household’ budgets.

What are the solutions to poverty in Wales?

To solve poverty in Wales there is a need to address all three drivers. This means:

• Raising incomes through more and better jobs;
• Designing a fair and effective social security system;
• Reducing costs by increasing housing affordability.

Whilst many of the key policy levers to put these solutions into place remain at Westminster there are steps that the Welsh Government could take. These include developing an anti-poverty strategy that clearly sets the steps that the Welsh Government intend to take to reduce the number of people living in poverty in Wales. Such a strategy could provide a strategic focus to the Welsh Government’s work, something the UN Special Rapporteur on Extreme Poverty felt was missing during his recent visit.

Further to this there is scope for the Welsh Government to build on the recommendations of the Fair Work Commission to ensure that work is fair for all. We believe that the Welsh Government could also do more to ensure that there is a safety net in place to help families who are not adequately supported by the UK Government’s welfare system. For example, at present, 55,000 children living in poverty are not eligible for a free school meal, a policy area that has been devolved to Wales, whilst our recently published report Kids on the Breadline set out steps that the Welsh Government could take to end holiday hunger. Furthermore, the publication of the Independent Review of Affordable Housing Supply provides the Welsh Government with an opportunity to review its rent policy, to ensure that a policy that places a greater emphasis on affordability is developed.

Set against this backdrop the Bevan Foundation welcomes the fact that there will be a private members debate on poverty this Wednesday and supports the calls made for the Welsh Government to produce a tackling poverty strategy, with a detailed budget and action plan for implementation, and the calls on the First Minister to clarify the areas of responsibility for tackling poverty within each ministerial portfolio. We will follow the debate with interest.