Next Welsh Government must drive down poverty in Wales

Poverty levels in Wales are some of the highest anywhere in the UK. For example, almost 1 in 3 children in Wales are growing up in poverty. This shocking situation cannot persist and the next Welsh Government have an opportunity, indeed a duty, to change this. With significant powers over things like the childcare system, housing and the expanding Welsh Benefits system, there is much that the Welsh Government can do. A larger and reformed Senedd will raise people’s expectations for what devolution can achieve in Wales — those politicians elected in May must rise to the challenge of this key moment.

Lawrlwythwch yr erthygl hon yn Gymraeg (PDF)

The Welsh Government must do better on poverty reduction

Poverty levels in Wales

Our report, Poverty in Wales 2025, sets out the extent to which people in Wales are experiencing hardship. The story is not a good one, with 22% of people in Wales (around 700,000 people) experiencing relative poverty, with little change in the last 20 years. Underlying that is the fact that poverty has deepened in Wales — with now nearly half of all people in poverty in very deep poverty, compared to a third in the mid-1990s.

Children continue to face a higher risk of poverty too, with nearly 1 in 3 children in poverty in Wales — some of the highest rates seen across the UK.

The story of the period of devolution, then, is that Wales has sustained some of the highest rates of poverty in the UK. The Senedd is also changing, with more members intending to strengthen the accountability role of the Senedd given its broader powers. With public trust in our political institutions at a low ebb it will be crucial for the new members to deliver for their constituents.

In that context, it is high time the Senedd and Welsh Government met the significant needs of people struggling to get by in Wales today.

What powers does the Senedd have to drive down poverty?

In many ways it is understandable that the current Welsh Government (and their predecessors and no doubt successors) will point the finger at the UK Government’s powers to impact the standard of living of people in Wales. With significant control over the social security system, the tax system and employment rights and responsibilities, it is undeniable that decisions taken in London have significant impacts on people across Wales as well as on the spending power of the Welsh Government. Decisions such as the one not to allocate consequential funding to Wales from HS2 further raise conflict between both of Wales’s governments.

But, in common with the devolved administrations in Belfast and Edinburgh, to simply blame Westminster for all the struggles that people face is to diminish the potential of the Welsh Government and Senedd to make change in the lives of people in Wales. With substantial powers over housing, local government, education, transport, health and social care and economic development, there are key things that the next Welsh Government can do that can improve people’s lives.

Action has been taken in Wales that will ease some of the pressure on Welsh households, for example:

• The Discretionary Assistance Fund: nearly 200,000 payments were made from the Discretionary Assistance Fund in 2024-25, providing crucial help in moments of crisis. Systems such as this, like the Social Welfare Fund in Scotland, can help prevent destitution.
• Maintenance of the Council Tax reduction scheme: providing a predictable and consistent scheme across Wales. Recent changes to allow Universal Credit claimants to be treated as if they have applied is also welcome.
• Establishing the Welsh benefits system and Charter: while the roll-out is still in progress, the commitment to bringing together the various support available to people in Wales by devolved government is welcome. As well as efforts to integrate data between local government and the Department for Work and Pensions (DWP) to help with take-up.
• Provision of universal free school meals in primary schools: help to provide a reliable and nutritious meal to support learning and keep down the cost of the school day.
• Maintaining Educational Maintenance Allowance (EMA): by maintaining, increasing the cash value and expanding eligibility for EMAs, the Welsh Government have provided crucial support for young people at a vital transition point in their lives.
• Taking action to address the housing crisis: the Welsh Government’s decisions to abolish the right to buy, to increase investment in social house building and to allow local authorities to set higher rates of council tax for second homes are important steps in tackling the housing crisis, although there is obviously much more to do.

Of course, the budgets of all tiers of government across the UK are under pressure, but politics is about priorities, and for far too long levels of poverty in Wales have been outrageously high.

Where might the next Welsh Government focus?

Ultimately the next Senedd needs to bring a laser focus and prioritisation to poverty if it wants to make progress. There are a number of different areas where it can make progress.

Child poverty

As noted above, child poverty is particularly high in Wales and, ultimately, the current Child Poverty Strategy lacks the ambition and scale of action necessary to drive down poverty levels in Wales. Significant action on the areas below could change that.

Childcare

Parents on low incomes constantly state the cost, lack of availability and lack of flexibility in childcare provision as one of the biggest pressures on both household budgets and a significant barrier to work, particularly for women. Wales still has one of the least generous childcare offers in the UK. The next Welsh Government should embrace expansion of early learning and childcare as a benefit to both the children receiving high-quality and nurturing care, as well as knocking down barriers to work and reducing costs to families. The Bevan Foundation has set out in detail the kinds of changes needed. But key features of any expansion should be the removal of work requirements to receive funded hours, as they simply bake in the inequalities that better access to childcare is trying to fix.

Exploring a child payment for Wales

The Scottish Government introduced the Scottish Child Payment in 2021. It has now been expanded to all children (under 16) in receipt of Universal Credit in Scotland, benefiting each child by around £1,400 every year and significantly reducing child poverty in Scotland. We show our modelled estimates of the impact of the child payment in Scotland in Poverty in Scotland 2024. More recently, the Centre for Social Exclusion at the London School of Economics have shared initial findings from their work on the impacts of the Scottish Child Payment. They conclude that material deprivation and food insecurity has been significantly reduced for children in Scotland compared to similar households in England. While the powers of the Scottish Parliament and Senedd are different, the next Welsh Government should explore how they might be able to do so within current powers, or indeed, seek more direct powers to do so.

Explore support for different family types

For example, in Wales 4 in 10 children in families with a child under 5 are in poverty compared to (admittedly still far too high) rates of 28% for ages 5–10 and 23% for ages 11–19 (see Poverty in Wales 2025). Clearly things like the provision of childcare will help those families with younger children, but the next Welsh Government should explore other ways of supporting these families, such as Baby Grants via the Discretionary Assistance Fund.

Free school meals

Free school meals provide a reliable and nutritious meal for children and are particularly important for children whose households are struggling to get by. The introduction of universal free school meals in Welsh primary schools, as part of the cooperation agreement between the Welsh Government and Plaid Cymru, has been very welcome. However, Wales still has very low income thresholds for free school meal eligibility in secondary schools. The next Welsh Government should expand eligibility so that at least all pupils whose families receive Universal Credit are eligible for free school meals, as is currently the case in England.

Support for children with No Recourse to Public Funds (NRFP)

The next Welsh Government should also look to extend support wherever possible to children in households with NRPF. NRPF conditions create destitution by design, and the Welsh Government, and local authorities, can assist children in such a trap via providing Free School Meals to children with NRPF, removing barriers to applications for support and ensuring that staff are appropriately trained in identifying and supporting families with NRPF.

Better coordinated support for parents to access work

While the regulation of employment rights is reserved to the UK Government, the Welsh Government has the power to knock down many of barriers that people face to accessing work. Whether that’s providing childcare, as already mentioned, or providing affordable and accessible public transport. A coordinated approach is required alongside local government and NHS services to facilitate parents accessing work that adapts to their individual needs and reverses the increasing trend of in-work poverty seen in Wales, and across the UK.

Poverty more generally

There are also actions the Welsh Government can take that will impact on poverty more generally (including for families with children).

Welsh benefits system

While welcome steps have been taken to embed the principles of a Welsh benefits system, there is much more the Welsh Government could do in partnership with local authorities. As the Bevan Foundation argue, the Welsh benefits system should be recommitted to, including commitments to review the eligibility for benefits, and uprate the payments involved. It should also be an arena for closer working with the DWP to maximise take-up amongst Welsh households of all the benefits they are eligible for, whether via the Welsh or UK Governments.

Council Tax reform

Despite being the only part of Great Britain that has had a Council Tax revaluation since Council Tax’s introduction, the tax continues to place an unfair burden on low-income households and is ripe for reform. Council Tax reform has the potential to reduce a significant household bill for low-income households, but also move the burden away from those households that are struggling, and place it with those households better able to cope. Maintenance of the status quo is an active decision to benefit higher-wealth households against those with less.

Protection of the Discretionary Assistance Fund (DAF)

As noted above, the provision of the DAF is crucial, and the extent of demand for it underlines its necessity. Piecemeal reform to it, however, has served simply to restrict access to it rather than maximising its potential to ease hardship. Following the election, it would be sensible to review the scheme to ensure that it is meeting the needs of those most in need.

Housing

While Wales has seen significant investment in affordable housing over recent years, there is an urgent need to focus specifically on the delivery of more social homes. A realistic plan for delivery should include a target specific to social housing, and ensuring that existing social homes are protected, as well as boosting supply by bringing empty privately-owned properties into use.

The next Welsh Government should commit to ending the use of unsuitable temporary accommodation and address the barriers to people moving into a permanent home.

More broadly, a national housing strategy is needed to create a more equitable housing system, strengthening tenants' rights in the private rented sector, and exploring the use of measures such as rent controls and property taxes to both strategically shape the market and raise revenue.

Conclusion

Ultimately, the credibility of the reformed Senedd will be judged on its ability to make a difference in the lives of people across Wales. Nowhere should that be more important than ensuring that the high levels of poverty and deep hardship that many households in Wales are facing are reversed.

Of course, making the sort of changes that we note here would require investments, and the necessary trade offs that that would require. But if politics teaches us anything at the moment, it is that defending the status quo is no longer an effective political strategy.

The political disaffection that many are feeling can be reversed if politicians can deliver change and noticeable improvements in people’s quality of life; surely what motivates any politician to stand for elected office. The next Senedd offers a big opportunity for Wales, and it is one that those who seek to be elected should grasp.