Destitution in a post-pandemic Wales

Destitution is projected to be three times higher in Wales following the COVID-19 pandemic, but a leading Welsh think tank suggest that introduction of a Welsh benefits system would help combat the issue going forward.

Dr Victoria Winckler, director of Welsh Think Tank, The Bevan Foundation made the recommendation at this month’s Cardiff Business School Breakfast Briefing which looked at the extent and effects of destitution in the UK and in particular, the impact of COVID-19 in Wales.

Dr Winckler shared the floor with Dr Elena Lisauskaite, economist at the National Institute of Economic and Social Research (NIESR) who began the session with a definition of destitution as “extreme poverty, where people are lacking basic things, basic needs in their life [such as] clothing, food, shelter.”

In monetary terms, this equates to a single person surviving on less than £70 per week.  If an additional adult is in that household, the household would require an extra £30 per week, and an additional child would need another £20 per week to be considered as living in “extreme poverty”.

Dr Lisauskaite continued by analysing the overall picture in the UK based on modelling provided by the Lifetime Income Distribution Analysis (LINDA) and projections from NIESR’s leading global macroeconomic model (NiGEM).

The UK forecasting made for sombre reading with Dr Lisauskaite describing it as “devastating.” The UK unemployment rate is predicted to increase from 3.9% (in 2019/20) to 6.1% (in 2022/23) with a rise of 54.8% in unemployment for 18- to 24-year-olds and a staggering 65.2% for the 50+ age group. Dr Lisauskaite explained that the pandemic and Brexit will exacerbate an already troubling picture with effects being particularly severe in regions with pre-existing historical deprivation. According to the data, 1,011,500 people will be living in destitution in the UK by 2022/23.

Dr Winckler followed on from Dr Lisauskaite’s presentation, echoing her findings and saying that the Bevan Foundation had very much discovered the same worrying trajectory in Wales during the last two years.

However, Dr Winckler looked to the future despite the bleak predications and advocated a Welsh benefits system which brings all devolved, means-tested grants and allowances together to allow easier access and fewer people missing out on funds they are eligible for. Dr Winckler explained that reforming the value of the grants and allowances and changing the eligibility criteria inline with people's needs is essential.

Dr Winckler also made recommendations across five key areas which the Bevan Foundation believe will help to reduce destitution in Wales:

• Housing
• Prevent homelessness
• Reform help with council tax
• Support for children and young people
• Creation of a new Welsh Emergency Fund.

Whilst reform of the UK social security system is needed, Dr Winckler believes that changes can be made in Wales as a start, as illustrated during the pandemic. She praised the Welsh Government for leading the way with enhanced provision of free school meals and expansion of the Discretionary Assistance Fund.

To find out more and to hear Dr Winckler and Dr Lisauskaite’s discussions in full you can watch a recording of the event.

Cardiff Business School's Breakfast Briefing Series is a network of events which enables business contacts to find out more about the latest research and key developments from industrial partners.

Following lockdown measures, implemented by Welsh Government in response to the COVID-19 pandemic, the School’s Executive Education Team has moved the series online.