Time to uprate Welsh grants and allowances

The Welsh Government must do the right thing and uprate devolved grants and allowances by inflation, says Bevan Foundation Director Victoria Winckler. 

The Bevan Foundation and many other organisations are urging the Chancellor to uprate pensions, Universal Credit and other social security benefits by the rate of inflation. Inflationary uplifts for these benefits used to be standard until austerity in the mid-2000s brought a freeze for several years. As a result, the value of many benefits for people of working age is now at its lowest level for decades – right at a time of rocketing prices.

The Welsh Government has been among those urging the UK Government to recognise that benefits need to keep pace with the cost of living. While it has held back from commenting on benefit uprating due to be announced in the Autumn spending review, it has, along with the Scottish Government, urged the UK Government to increase benefits by £25 a week immediately to help with inflation. This is much greater than the current rate of inflation as a percentage of all benefit and pension standard allowances.

The Welsh Government has done a great deal to help with rising costs, from the Welsh Fuel Support Scheme to increasing and extending the Pupil Development Grant – Access to creating a Discretionary Homelessness Prevention Fund. But on the question of inflation-linked uplifts to the many devolved grants and allowances that it is responsible for, so far it has been silent.

The Bevan Foundation has written to the First Minister urging the Welsh Government to uplift key devolved grants by inflation. These include:

• Increasing the level of Education Maintenance Allowance (EMA) paid to low-income learners aged 16-18 by £5 a week – equivalent to 16% uplift after being frozen for more than a decade.
• Increasing the household income threshold for EMA eligibility by 10% to £22,898 (for one child families)
• Increasing the earnings limit for Free School Meals eligibility by 10% to £8,140
• Increasing the allowance paid to 16-18 year olds in work-related training by £5 pw for those in the ‘engagement phase’ and £60 a week for those in the ‘advancement’ phase – an uplift of 16% and 10% respectively
• Increasing the standard PDG-Access allowance by 10% to £135 a year
• Increasing the value of Healthy Start vouchers by 10% to £4.75 per week from 10 weeks pregnant to birth and from ages 1 – 4 years old (increase to £9.45 per week from birth to 1).

Uprating devolved grants and allowance should not just be a one-off because of the eye-wateringly high current rates of inflation – the Welsh Government should make an uprating announcement when it publishes its draft budget every year.  That way, the value of many of these grants and the thresholds that determine eligibility will not be eroded by stealth. 

With the Welsh Government and others focused on the UK Government’s uprating of benefits, it must put its own house in order too.

Victoria Winckler is Director of the Bevan Foundation