Poverty in Wales likely to get worse as economic fallout from Covid-19 continues

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The Joseph Rowntree Foundation report had some stark findings Credit: PA Images

Poverty in Wales is likely to get worse as the economic fallout from the coronavirus pandemic continues, according to a report from the Joseph Rowntree Foundation.

In its latest state of the nation report, Poverty in Wales 2020, the JRF found that a combination of low pay, unaffordable housing and lack of childcare was trapping 700,000 people in poverty; including 180,000 children.

Almost a quarter of people in Wales were living in poverty before the coronavirus crisis struck.

The report found that low-paid workers in Wales had been hit particularly badly. Workers in sectors with a large proportion of low-paid jobs - such as the accommodation, food and beverage sector - had seen 78% of jobs furloughed with the JRF report saying those sectors were "likely to see widespread job losses".

By August, the number of Universal Credit claimants had doubled since the beginning of the year.

Peter Matejic, deputy director of evidence and impact at the Joseph Rowntree Foundation, said: "Too many people in Wales entered this pandemic already locked in poverty.

"As job losses loom and the recession starts to bite, that number is set to rise.

"Families up and down the country are struggling to keep up with rent and put food on the table – this is not the kind of society we want to be.

"Governments in both Cardiff and Westminster must now take decisive action to support those in need through the pandemic and beyond.”

Unaffordable housing was listed as a concern in the report Credit: PA Images

By June 2020 around 400,000 adults had fallen behind on bills, with 200,000 falling behind on rent or mortgage payments. 

The report criticised the Welsh government for allowing rent increases in the social rented sector to outstrip inflation. A move, it said, would worsen poverty amongst working social renters.

A lack of childcare was cited as a driving factor in keeping people in poverty Credit: PA Images

The report also criticised the system that enables some parents to claim free childcare.

Parents of three to four-year olds are entitled to 30 free hours of childcare a week, but to qualify they must work an average of 16 hours a week at minimum wage.

Many families in poverty who are working fewer than 16 hours are locked out of receiving free childcare. The report said this prevented them building up experience and skills to secure more work.

Dr Victoria Winckler, director of the Bevan Foundation, said: “It’s not right that so many people are trapped in poverty in Wales today.

"Coronavirus has had a huge impact on all our lives but people on low incomes have been disproportionately affected.

“The pandemic has shown that the Welsh Government has the power to do things differently.

"It has already stepped in to provide free school meals in the holidays, increased emergency help to families in financial crisis and committed funding for long-term solutions to homelessness.

"But there is more it can do to support the people and places hit hardest.”  

The report made four main recommendations to the Welsh government:

  • Develop a new childcare offer based on seamless provision for all children. This would include a core of free, part-time childcare and early years education for pre-school children and increased provision of affordable before-school, after-school and holiday childcare.

  • Guarantee that social rents are affordable by ensuring that they do not outpace wages or benefits and build 20,000 homes available for social rent over the course of its five-year term.

  • Focus its economic strategies on job creation and retention in the areas of Wales with the weakest local economies and those which are being hardest hit by the pandemic, including the south Wales valleys and rural Wales.

  • Actively consider the merits of the Bevan's Foundation's proposals to improve and bring together the existing devolved grants and allowances into a coherent and effective ‘Welsh Benefits System’.

In response to the report the Welsh government said it had increased support since the pandemic struck.

A spokesperson said: "We have made significant funding available to help children and families most in need, resulting in modest falls in child poverty in the face of a decade of austerity. 

"The pandemic is having a big impact on families living in poverty and we have increased support available to help them through this incredibly difficult time 

"We will continue to do everything we can to support children and families out of poverty."

There was also a call for the UK government to make the £20 uplift to Universal Credit and Working Tax Credits permanent and extend it to families on legacy benefits.

The UK government has been contacted for comment.

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