The Welsh Government’s Draft Budget – what it means for poverty

Poverty
Image by ScouserUK from Pixabay
ViewsDecember 20th, 2021

The Bevan Foundation’s Steffan Evans gives our initial reaction to the Welsh Government’s draft budget

Seven months on from the Senedd election and a month on from the announcement of the Labour/ Plaid Cymru Co-operation Agreement the Welsh Government have published their draft Budget for the next three years. What impact are the measures set out within it likely to have on poverty?

Overview

With only a month since the publication of the Co-operation Agreement it’s fair to say that the draft budget does not contain too many surprises. With the Co-operation Agreement light on detail in some areas, the draft budget provides welcome clarity on the Welsh Government’s policy priorities.

Welcomed investment

Arguably the most positive announcements are found in policies that will support children who are trapped in poverty.

The commitment of £90m to support the extension of Free School Meals to all primary school pupils by 2024/25 is especially welcome. Research undertaken by Policy in Practice on behalf of the Bevan Foundation and the Wales Anti-Poverty Coalition earlier in 2021 suggests that this should provide adequate resource funding for the policy to be successfully implemented. Furthermore, the announcement that £40m of this funding will be available from 2022/23 should be sufficient to ensure that all children in key stage 1 are provided with Free School Meals from September 2022.

Further positive announcements include the investment of an additional £20m into the Pupil Development Grant alongside the investment of an additional £40m into Flying Start and Families First.

The Welsh Government’s decision to invest a further £7m into the Discretionary Assistance Fund is also welcome. It will ensure that more people are able to access emergency cash support. The decision to invest £3m to improve evidence on inequality in Wales is interesting although not cheap given budget pressures.

Progress but is it enough?

In other policy areas, the budget statement raises further questions. This is especially true in relation to two policies areas: childcare and housing.

The Welsh Government’s decision to allocate an additional £30m in Early Years and Childcare is a positive step but it remains unclear who will benefit from the extra funding. The Draft Budget Narrative suggests that this funding will be used to expand its childcare offer to parents who are in training or education, and on increasing provision for two year olds. It does not set out how provision will be increased to two year olds, nor does it make reference to whether the children whose parents are not in work nor training will benefit from the expansion in provision.

The Welsh Government’s decision to increase its investment in Social Housing Grants also raises further questions. The increase in Social Housing Grants to record levels is to be welcomed but it is not yet clear whether this will be sufficient to match its bold objective of building 20,000 new social homes by 2026. In the last ten years nearly 22,000 new social homes have been constructed in Wales. Whilst the sector is expected to build new social housing at twice the rate that it has done historically, the Welsh Government has not increased its investment at the same pace. With inflationary pressures also affecting the sector it remains to be seen who will be picking up the bill for the shortfall. We sincerely hope it will not be tenants. 

Missing areas

Unsurprisingly given its omission from the Co-operation Agreement, older children young adults are arguably the group that are most overlooked within the draft budget. As we noted at the time, the Co-operation Agreement offered little to assist the 10,000 children in secondary schools who are denied free school meals despite living in poverty, nor did it make reference to increasing the value of EMA. It is not, then, surprising that these gaps are still present within the draft Budget it is no less disappointing.

Reflection

While there are certainly areas where the Welsh Government could invest further to reduce poverty, it is also important that we do not lose sight of the progress that has been secured through this draft Budget.

The recognition within the draft Budget of the difficulties faced by many Welsh families is welcome, and to this end we’re especially pleased to see the Welsh Government make reference to the Bevan Foundation’s research in its Strategic Integrated Impact Assessment. Given the pressures faced by families it is more vital than ever that the funding commitments made through this draft Budget get out of the door as quickly as possible.

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