Poverty costs Wales £3.6 billion every year

Twenty three per cent of Wales’ population, 700,000 people, are struggling to make ends meet.

As well as the impact this has on people’s lives and the waste of potential that it represents, it also places significant demands on the Welsh Government’s budget, with public agencies within health, education, social care and the criminal justice systems spending £3.6 billion every year dealing with the social consequences of this high level of poverty. This is equivalent to £1,150 for every person living in Wales, and represents £1 in every £5 of spending on public services. Poverty also brings additional costs from lost tax revenues and costs to the social security system.

Today, (Tuesday 8 November) the independent Joseph Rowntree Foundation launches the first comprehensive plan showing how to solve poverty in Wales by 2030. Written with the Bevan Foundation, Prosperity without poverty: a framework for action in Wales sets out a vision of a country where no-one is ever destitute, less than one in ten of the population are in poverty at any one time and nobody is in poverty for more than two years.

To solve poverty, the plan focusses on five key areas for action:

  1. Developing an economy that works for everyone. This would include:
    • creating more high quality of jobs through developing industrial strategies for low-paid sectors
    • rebalancing the Welsh economy and promoting inclusive growth by refocussing Welsh Government business finance to support the creation of good quality jobs where they are most needed
  2. Boosting education and skills. Having a good teacher compared with a weaker teacher leads to an additional year's progress. The Welsh Government could build on their progress in this area by:
    • taking action to driving up the quality of teaching and leadership in schools
    • linking funding for apprenticeships to progression and outcomes to boost quality
    • improving careers advice for students and adults
  3. Strengthening families and communities. Families and communities play a vital role in fighting material and emotional hardship, but there is strong evidence that living in poverty can contribute to relationship breakdown. The strategy recommends action to:
    • developing parenting and relationship support services
    • improve the quality of early-years childcare provision to boost the life chances of children living in poverty
  4. Cutting costs. Poverty cannot be eradicated if essentials like housing, food and energy are unaffordable for people on low and modest incomes. To control the cost of these essentials, the Government could:
    • prioritise the building of more genuinely affordable homes and link social rents to local earnings through a Living Rents scheme
    • work with private landlords to improve conditions and affordability in the private rented sector
    • work with suppliers to end the poverty premium and make sure that essential services like public transport, the internet and financial products are available to people on lower incomes.
  5. Addressing complex needs. The Welsh Government has made significant progress towards meeting the needs of people with complex needs, including action on homelessness, domestic and sexual abuse and provision to help care-leavers. But there is still more to be done, such as:
    • Scale up the Housing First model as the default model for homeless adults with complex needs
    • Improve the outcomes for care leavers by improving accommodation and support arrangements for young people who do not wish to live with their carers

Julia Unwin, Chief Executive of the Joseph Rowntree Foundation, said:

“Poverty in Wales is holding back almost a quarter of the population, damaging the economy and affecting the life chances of the next generation. This is unacceptable. The Welsh and UK Governments have an opportunity to end this damaging cycle and ensure that everyone in Wales has the chance of a decent and secure life.

“The Welsh Government has long been committed to positive action to solve poverty, but there is more that must be done to end the problem once and for all. Attempts to solve poverty will only be successful if they tackle all the root causes, so it is vital that Government works closely with businesses, employers and individuals to get to grips with the drivers of poverty and disadvantage in Wales today.”

Dr Victoria Winckler, Director of the Bevan Foundation, said:

"These recommendations are a first because they are based on evidence of "what works" and are focused on the root causes of poverty, which lie in our economy, markets and public services. Just as almost anyone is at risk of poverty, so too must we all - government, businesses and charities - take action."