How Wales tackled poverty in 2015

10 December 2015

Article by  Hannah Johnson, National Assembly for Wales Research Service

This year, debates about poverty in Wales have been high up the political agenda. Discussions focused on the effectiveness of government programmes, continuing reforms to welfare and what the next five years hold for the poorest in the country.

With the election looming and a stubbornly high proportion of the Welsh population living in poverty, here’s a rundown of the key events, publications and research on poverty published in 2015, in reverse chronological order:

Ahead of the United Nations Summit on Climate Change in Paris in November the Minister for Natural Resources warned that the poorest in Wales will take the biggest hit from climate change. He said:

Climate change is one of the biggest challenges facing the world in the 21st century which has significant environmental, economic, cultural and social consequences. It will affect future generations, and [disproportionately] impact people in poverty within Wales and worldwide.”

The Bevan Foundation published a report in November calling for the next Welsh Government to implement a national programme to spread prosperity and boost the life chances of thousands of people in Wales.

It argued that the next Welsh Government needs a radical new approach which:

  • is of sufficient scale to achieve a measurable improvement in the distribution of income and life chances;
  • recognises the specific needs of people at different stages in their lives;
  • is pan-Wales in scope and impact;
  • includes action by all key organisations – including business, the public sector and third sector.

The Welsh Government launched a consultation in October on a set of legally-required performance indicators to measure the seven well-being goals (one of which is ‘a prosperous Wales’) in the Well-being of Future Generations (Wales) Act 2015.

There is also a requirement to set milestones in relation to the indicators.

A number of the proposed indicators relate to poverty, including: number of babies born at a healthy weight; homelessness; people in work; people able to afford everyday goods and activities; and life expectancy, among others.

Notably, one of the proposed indicators is ‘the number of people living in poverty’, which is not used as a performance indicator by the Welsh Government’s Tackling Poverty Action Plan.

A homeless man
Image from Wikimedia. Licensed under the Creative Commons

In October the Minister for Communities and Tackling Poverty announced an investment of £41.1 million from Welsh Government and EU funds for the Communities For Work Programme. According to her statement, this is a three year programme, and will ‘help support 8,000 individuals into employment’.  She also stated that it will specifically “support economically inactive and long term unemployed adults and young people who are NEETs, who have complex barriers to employment to re-engage with the labour market.”

The Minister also launched the Welsh Government’s Parents, Childcare and Employment (PACE) programme, to help economically inactive parents into training or employment where childcare is their main barrier. The scheme will be delivered across each local authority in Wales and is expected to help 6,400 economically inactive parents aged over 25 into work or training over the next three years.

The Bevan Foundation published a report in September speculating what Wales will be like in 2020. It suggested that:

  • poor families will be £40 a week worse off, while the average full-time worker will be £125 a week better off;
  • there will be 17% more professional jobs, but 12%  less semi- and unskilled jobs;
  • there will be a shortfall of around 60,000 new homes; and
  • 70,000 children will leave school without 5 good GCSEs.

The Foundation’s Director argued that “there needs to be an honest discussion about universalism and targeting, and about place-based versus people-based approaches”.

In September, the Joseph Rowntree Foundation published its biennial Monitoring poverty and exclusion in Wales report, which found:

  • an average of 700,000 people were in poverty in Wales in the three years to 2013–14, equivalent to 23 per cent of the population;
  • compared with ten years earlier, there are more people of working age (particularly young adults) in poverty and fewer children and pensioners in poverty;
  • there has been no reduction in the extent of low pay in Wales for a decade. 270,000 jobs, mainly held by women, are paid below two-thirds of the UK median hourly wage;
  • in 2014 there were 30,000 Jobseeker’s Allowance (JSA) sanctions, which is lower than in 2013, due mainly to there being fewer claimants.

In June, the Assembly’s Communities, Equality and Local Government’s Committee published a report citing deep concern at static poverty levels in Wales, and called on the Welsh Government to significantly refresh its approach to poverty reduction. One political commentator suggested that it was ‘potentially the most important inquiry since devolution’.

The Minister for Communities and Tackling Poverty responded to the report in October, saying that she did not consider the Welsh Government’s approach needed reviewing. Further information on the Minister’s response to the report is available in my previous blog post.

In April, the National Assembly for Wales passed the Well-being of Future Generations (Wales) Act 2015. The Act aims to improve the social, economic, environmental and cultural well-being of Wales.

The Act aims to make certain public bodies think more about the long term, work better with people and communities and each other, look to prevent problems and take a more joined-up approach.

The Welsh Government published its revised Child Poverty Strategy in March. Following consultation, the Strategy retains the three previous strategic objectives. These focus on reducing the number of children living in workless households, increasing skills and reducing inequalities in health, education and economic outcomes. It also set two new objectives: one focussed on the role of the economy in creating jobs and growth for Wales, and the other on tackling in-work poverty.

The Strategy also makes it clear that “the Tackling Poverty Action Plan remains the key mechanism by which [the welsh Government] will deliver the aims of [its] Child Poverty Strategy”.

In January, the Auditor General for Wales published a report Managing the Impact of Welfare Reform Changes On Social Housing Tenants in Wales.

The report examined the impact of welfare reform changes on social housing tenants in Wales and found that that the changes to Housing Benefit introduced by the welfare reform programme were having a significant impact on Welsh councils and housing associations, who were struggling to deliver effective and sustainable solutions.

The Assembly’s Public Accounts Committee decided to undertake an inquiry on the issue. It found that the welfare reforms were hitting people already in poverty particularly hard. Some social landlords use ‘financial capability assessments’ to gauge tenants’ ability to pay rent, which, if failed, effectively means they would be ‘too poor for social housing’.

The report recommended that the Welsh Government:

  • develop a welfare reform strategy to increase consistency and provide coherent leadership on the issue;
  • publish the suite of options considered by Ministers to mitigate the impact of the removal of the spare room subsidy (the so-called ‘bedroom tax’);
  • collect key data from the UK Government Department for Work and Pensions, local authorities and housing associations;
  • monitor the impact of financial capability assessments and undertake research into the profile of applicants who fail them;
  • exercise greater influence to ensure a consistent approach to the use of discretionary housing payments across Wales.

The Minister responded in August, but the Committee asked for further information, which was received in November.

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