The new Welsh Government has pledged to introduce a payment to families with children to help to reduce child poverty. This is an important milestone in the fight against child poverty in Wales. While it is by no means the first time that Welsh Governments have topped up the incomes of low-income families – remember the cash paid in lieu of Free School Meals during Covid – to plan to do so on a permanent basis as an explicit way of reducing poverty is new.
It is worth remembering that children are the age group at greatest risk of poverty. Growing up on a very low income has lasting and negative effect on their development. While I was at the Bevan Foundation, we worked with Policy in Practice to model the interventions which would have the biggest impact on child poverty, and a Scottish-style child payment came top of the list. So Plaid Cymru’s manifesto pledge, and now its commitment to deliver, is a major step.
But there some big pitfalls lying ahead, as well as some tough decisions about priorities.
Limited immediate impact
Welcome though it is, there is a question about the impact of the Cynnal pilot on child poverty. Sadly, £10 pw is simply not enough to lift many children above the poverty line. JRF calculated that a couple with two primary-school-aged children living in deep poverty would need an extra £10,900 a year – £200 a week – to reach the poverty threshold while those in very deep poverty would need an additional £13,500 a year. On top of this, the pilot will be paid to up to 15,000 children, far fewer than the total number of children in poverty in Wales.
The reality is that the child payment pilot is simply too modest to make a difference to the headline poverty rate – plus there are quirks in the way that statistics are collected which make it even less likely to show up.
This is absolutely not a reason to back off – but if I was Sioned Williams MS, I’d be shifting the narrative away from the impact of Cynnal on the stats to the impact of Cynnal on families.
Priorities
There’s also a question about which children should be eligible for the Cynnal pilot. Plaid Cymru have, rightly in my view, said that the focus will be on the youngest children, which it has defined as those aged 0-6 years, not least because poverty rates are especially high in that age group. The stats suggest that there are very roughly around 75,000 children aged 0-4 years in poverty and a further 22,000 aged 5-7 years – approximately one in five or six of these children will benefit from the payment during the pilot.
So who will be the lucky children? Well, there’s mention of the pilot focusing on specific local authorities, which I can see might have its attractions. But there are other ways of prioritising too: how about the very poorest families – such as those whose benefits are capped or those with a big shortfall of benefit payments towards their rent? The £10 payment is likely to make the biggest difference of all to children in families with the very least, meaning they can afford some heating, more food or to replace clothing.
Or how about prioritising 0-4 year olds, which have poverty rates of around 41% compared with around 31% for older age groups?
Pitfalls
The incoming Welsh Government should be mindful of possible unintended consequences of the Cynnal payment, the most obvious of which is the impact of increasing family income on eligibility for means-tested benefits or services. Without agreement with DWP, it’s possible that the extra income would simply be deducted from a family’s Universal Credit entitlement. A higher household income could even affect eligibility for Welsh Government benefits, such as School Essentials Grant or Council Tax reduction, MA, it could change debt repayments that need to be made, and rule out access to means-tested services such as legal aid.
Wider support
The Welsh government should also explore whether families eligible for Cynnal get all the support to which they are entitled, whether that is Council Tax reduction, Warm Homes discount, Flying Start childcare, the Discretionary Assistance Fund or a contact with a parent and toddler group. Building links with local, trusted community organisations able to support and signpost families will be key to the long-term aim of lifting thousands of children out of poverty.
The Cynnal child payment is a huge opportunity to tackle the scourge of child poverty in Wales. The pilot is an important first step – and in making it, the Welsh government must not slip.
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