Poverty – Are Wales’s Charities up to the challenge?

Poverty in Wales is set to increase dramatically.  Already at high levels, a vicious combination of static wages, cuts to benefits and shortage of jobs could see the numbers of people on low incomes soar. But as cuts bite it’s not clear if Wales’s third sector will be able to rise to the challenge.

People in Wales already suffer from unacceptably high levels of poverty. Between one in four and one in five of the population live on an income below 60 per cent of the UK median for their household type, with the proportion of children living in low income households being considerably higher.

The outlook for the next few years is bleak.  Forecasters see very little economic growth for the UK on the horizon, and with forecasts being repeatedly revised downwards no-one can be confident that even a modest upturn will be achieved. Wales is hardly at the forefront of economic dynamism, so the prospects will be if anything even worse.

Into this static or even contracting economy and labour market are pouring thousands more job-seekers.  Thousands of people are being moved from benefits such as Income Support and Incapacity Benefit in expectation that they will find work. Thousands more older people (initially all women) will be in or seeking work because of the increases in state pension age.  To this must be added Wales’s mini baby-bulge of young people aged 16-24 coming into the workforce.  All looking for work.

Those who find a job are hardly facing a life of luxury. The quarter of earners with the lowest incomes earned just £308 a week for men and £170 a week for women in 2011. Even worse, unlike any other group of workers, the poorest paid have seen their weekly earnings fall over the last two years.  And this at a time when rising prices, particularly of basis such as gas and electricity and food, have most affected those on low incomes.

On top of all this is welfare reform.  Expected, by the Welsh Government’s own analysis, to result in an average loss of income of 4.1 per cent, the effect on those who are already poor is truly appalling.  Lone parents and workless families could lose about 12 per cent of their income – up to £50 a week. Most people would find reductions in income on this scale tough to cope with.  The impact on people who are already on the edge of managing financially could be devastating.

One doesn’t have to be a pessimist to foresee very difficult times ahead for Wales’s least well off.

So what to do? Well, there’s little indication that the UK Government has concern about poverty or Wales at the top of its agenda.  The Welsh Government’s overdue ‘Tackling Poverty Action Plan’ is expected soon, but Cabinet statements made to date don’t inspire confidence that anything new or different is about to be announced.  Local authorities are hamstrung by their legal obligations and tough settlements.

Which leaves charities.  Without coming over all ‘Big Society’, Wales’s third sector can, and indeed should, have a pivotal role to play in “tackling poverty”.  But the third sector, too, faces pressures from cuts in public funding and rising demand for services.  And with relatively few large charities and a very small home-grown philanthropic sector, it’s far from clear if the third sector is going to be able to step up to the challenge.  Yet this is something they can and must do, for the sake of Wales’s most vulnerable people and communities.

The Wales Council for Voluntary Action and Bevan Foundation conference on the third sector and poverty is on 30^th May 2012. to find out more and book your place visit WCVA online

Victoria Winckler is Director of the Bevan Foundation.