Cost-of-living: Welsh ministers’ help not enough, report says

Cost of living policies from the Welsh government do not offer enough help to people facing hardship, a Senedd committee has said.

It criticised a cut in fuel payments and said a top-up in funding for sixth-form and college students was overdue.

Senedd members will debate the Welsh government’s £20bn spending plans for the next financial year on Tuesday.

The Welsh government said the key levers for tackling poverty lie with the UK government.

The Conservatives accused Labour ministers of making real terms cuts to health, social services and education in their budget.

Meanwhile, Plaid Cymru has called for income tax rises to help fund pay rises in the NHS and social care.

The report by the cross-party finance committee looks at Labour ministers’ latest Welsh government budget.

Every year, ministers in Cardiff set out how they will divide funding from the UK government and tax between the NHS, councils, education and other Welsh public services.

“We see little in this draft budget to prevent households falling into hardship,” the committee said.

It also said it is disappointed warm home payments of £200 for people on benefits will stop later this year.

About 166,000 households benefitted from the £90m Winter Fuel Support scheme, but ministers say they cannot afford to keep it.

The committee also calls for an increase in the Education Maintenance Allowance (EMA) for 16 to 18-year-olds. The weekly payment has been kept at £30 since the mid-2000s.

A review of the household income that qualifies students for EMA, which last changed in 2012, was “long overdue and should be undertaken urgently”, it added.

High inflation has reduced the value of the Welsh government’s £20bn budget, with ministers warning they will not be able to deliver as much as they hoped.

But the committee says there is not enough detail about cuts, and it calls for a full assessment on the impact of inflation.

Committee chairman Peredur Owen Griffiths said: “We understand that the funding decisions facing the Welsh government are extraordinarily tough, but we were surprised and worried at the lack of candour in the draft budget.

“This is not the right way to deal with our committee and the Senedd generally, and undermines legitimate democratic scrutiny.”

In the budget, Welsh government ruled out using its powers to change income tax.

Finance Minister Rebecca Evans has said she thought “long and hard” about whether to put up income tax, but decided it “didn’t feel like the right time to be taxing people more”.

Explaining her decision to the committee, she said there was a danger of high earners moving out of Wales to avoid a tax hike.

But the absence of a full analysis of this “suggests that the minister had not seriously considered changing tax rates”, the committee says.

Tuesday’s debate comes during negotiations between the Welsh government and unions over pay.

Most health unions have suspended strikes while they consult members on an improved pay offer from the government.

But Ms Evans has said extra cash found to make a better pay offer to NHS staff means the Welsh government will have “more difficult choices” to make in future years.

The government is expected to win a Senedd vote on the budget on Tuesday, with Plaid Cymru abstaining on the spending plans as part of its co-operation agreement with Labour.

Plaid has tabled an amendment calling for increases to income tax to pay for NHS and social care pay rises.

It does not have enough votes to get its own proposals through the Senedd alone and they are unlikely to pass.

The Conservatives said they had an “action plan” that would put people’s priorities at the heart of the Welsh government budget, which included care hotels to clear hospital backlogs, surgical hubs and freezing council tax.

Shadow Finance Minister Peter Fox said: “The Welsh government receives £1.20 for every £1 spent in England, yet Labour have consistently failed to address the people’s priorities. Waiting lists are the longest in the UK, the Welsh economy is being throttled and our children’s futures are being held back.”

Plaid Cymru leader Adam Price said: “Plaid Cymru has shown a way forward. Using the tax powers we have here in Wales, we could generate an extra £317m to offer NHS workers an 8% pay rise – the first real terms pay increase in over a decade – to help tackle staffing shortages and provide care workers with £12 an hour as a minimum.”

The Welsh Liberal Democrats, who have one MS in the Senedd, called for more money for NHS dentistry and investment in insulation.

A Welsh government spokesman said: “Our draft budget is designed to protect public services and the most vulnerable in the face of a perfect storm of financial pressures.

“It built on spending plans previously set out in our three-year budget – and already scrutinised and agreed by the Senedd – supporting programmes helping people through the cost-of-living crisis including the Discretionary Assistance Fund, free school meals and the Pupil Development Grant.”

The spokesman said the “difficult financial picture is limiting our ability to make the level of spending commitments we would like to make” and the “key levers for tackling poverty” with tax and welfare “largely sit with the UK government”.

“We provided detailed evidence to Senedd committees and look forward to further scrutiny in the debate,” he added.