Our reaction to the Welsh Government Draft Budget

The Bevan Foundation shares our reaction to the Welsh Government’s Draft Budget

Ahead of the publication of the Welsh Government’s Draft Budget the Bevan Foundation wrote to the Cabinet Secretary for Finance and Welsh Language setting out the 5 policies we believed that the Welsh Government should prioritise if it was to invest in solutions to poverty and inequality. With the Draft Budget now published, how does the action taken by the Welsh Government measure up with our calls?

Our overall reaction

There is much to welcome in this Draft Budget. It includes measures that will make a real difference to the lives of people across Wales, in particular those living in poverty. There is room to go further, however. Actions that could have been taken to put more cash in people’s pockets such as by uprating Welsh Benefits have not been taken. With no sign that the cost-of-living crisis is easing, this is a real concern.

There is also scope for greater clarity from the Welsh Government on its funding plans. The fact that there are significant questions unanswered around the Welsh Government’s funding plans on vital policy areas such as childcare makes it difficult to scrutinise the potential impact of this Draft Budget on poverty and inequality as a whole.

Our five asks

The Bevan Foundation are pleased to see the Welsh Government take direct action in relation to two of the asks we outlined to the Cabinet Secretary in our letter.

Protect the Discretionary Assistance Fund

The Discretionary Assistance Fund (DAF) is a lifeline for people in financial crisis. It provides both direct cash support to people in financial crisis, and goods in kind (e.g. white goods) to support people to live independently. With no sign that the impact of the cost of living crisis on Welsh Communities is easing the Bevan Foundation argued in our letter to the Cabinet Secretary that it was vital that the Welsh Government protected its investment in the DAF.

The Bevan Foundation are therefore pleased to see that the Welsh Government has not only committed to protect its investment in the DAF but to actually increase its investment, by around £1m. This decision will help ensure that there is support available to some of the people in greatest hardship in Wales.

Increase investment in social housing to reverse the growth in households living in temporary accommodation

The number of households living in temporary accommodation in Wales increased by 18% during 2023-24. One in every 215 households now lives in temporary accommodation, including six in every 1,000 children.

Increasing the supply of social housing is one of the key solutions to Wales’ temporary accommodation problem. We have therefore urged the Welsh Government to boost the capital funding available for social housing construction, as well as using all possible means to accelerate delivery. It is therefore welcome to see the Welsh Government announce an increase in its investment in the Social Housing Grant and Transitional Accommodation Capital Programmes.

Less encouragingly there appears to be no action forthcoming from the Welsh Government in relation to one of our asks.

Uprate the eligibility criteria and cash value of Welsh benefits in line with inflation

The eligibility criteria for many Welsh benefits like Education Maintenance Allowance, the School Essentials Grant and Free School Meals in secondary school have not increased in line with inflation. This means that families must be poorer than ever before to access them while for people who are eligible, the value of support is in many cases lower in real terms. 

It is therefore very disappointing that there is no reference made to increasing the thresholds and payment values of Welsh benefits in the Draft Budget.

A lack of information makes it very difficult to assess whether the Welsh Government has taken significant action with regards to two of our asks.

Funding for fair free school meals

Our letter to the Cabinet Secretary highlighted concerns that most local authorities in Wales do not provide free school meals to children from low income families who have no recourse to public funds. Given this, and broader concerns about the eligibility criteria for Free School Meals in secondary schools we called on the Cabinet Secretary to:

• permanently extend eligibility for free school meals to all children from all low-income households, irrespective of a child’s immigration status;
• introduce a fair and appropriate system for assessment of financial eligibility.

Whilst it was welcome to see the Welsh Government commit to invest £93.5m to maintain the universal provision of free school meals in primary schools, it is nonetheless disappointing that the Welsh Government makes no reference to children with NRPF nor to children in secondary schools in its Draft Budget.

Fund Phase 3 of the Flying Start Expansion

With more than half of children living in poverty in Wales living in a family with a child aged 0 to 4, designing a childcare system that is affordable, accessible and of good quality is crucial if to make real progress in reducing child poverty. In this context the Welsh Government’s plans to expand the childcare element of Flying Start to all two-year-olds via a phased approach has been a positive development.

Under current plans 60% of 2-year-olds in Wales will able to receive Flying Start (Childcare) from April 2025 on completion of Phase 2. In our letter we called on the Cabinet Secretary to ensure that adequate funding is secured to start the rollout of Phase 3 from April 2025, as originally planned, meaning that all 2-year-olds in Wales would be able to benefit from the policy.

Whilst it is welcome to see the Welsh Government increase investment in the Childcare Offer by £20m (childcare provision for some children aged 3 and 4) no reference at all is made in the Draft Budget to Flying Start. This will inevitably lead to concerns from some parents that the money will not be there to roll out the policy from 2025.