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Making the economy work for people on low incomes A National Assembly for Wales abstract on poverty in Wales

More than half of Welsh working-age adults and children in poverty have at least one person in their household in work.

Poverty in Wales is a key focus for this Committee, but has remained stubbornly high for too long, and work has failed to deliver a route out of poverty for some people. This has a big impact on the lives of people across Wales and affects communities.

We wanted to look at how we can ensure the economy works for those on the lowest incomes and whether the Welsh Government's approach to reducing poverty and boosting prosperity is working.

Why is this important?

We all believe in the importance of work, not just as a means of supplying income, but the broader benefits of work for an individual, their family and their community. However, changes to employment practices and the types of work available are driving up levels of in-work poverty.

A fair day's pay for a fair day's work.

Although some of the policy levers that can help address these issues are outside of the Welsh Government's control, it does have the opportunity to use its powers creatively to ensure that people living in Wales have access to good quality and secure work which pays a decent wage.

What the Committee did

Eight focus groups were held across Wales - in Blaenau Ffestiniog, Caernarfon, Cardiff, Conwy, Ebbw Vale, Lampeter, Merthyr Tydfil, Rhondda Cynon Taff, Swansea, Ton Pentre and Torfaen. Views were gathered from those with direct experience of living on low incomes. This included a mixture of young people, low income families and single parents, some of which were employed, some were in part time work or zero hour contracts, and others were out of work. We also heard from frontline staff including support workers, programme managers and scheme managers. A number of themes emerged which informed subsequent evidence sessions and the final report.

We also heard evidence that the Welsh Government needs to do more in a number of areas.

What we heard

Job opportunities

In every one of the focus groups we held across Wales, we heard about a lack of job opportunities in the area. People told us that available work was low paid, and in some areas, including North West Wales, it is seasonal. People in rural areas also told us about the reduction in jobs that has occurred over recent years.

Public transport

In addition to a lack of available jobs, we heard poor transport links create an additional barrier to employment. People living in both rural and urban areas highlighted the importance of decent bus services because the costs of running a car can be too high. Some of the practical issues were:

  • a lack of basic information about timetables, prices and bus stop locations;
  • the difficulties of shift working when relying on public transport at times when the service is less frequent; and
  • a number of connections make the journey more unpredictable .

Our view

The majority of the Committee support the focus on regional economic development within the Economic Action Plan. The economic challenges faced in Milford Haven, are different to those in Caernarfon, which are different to those in Wrexham. If we are to make real changes to people’s lives, the approach needs to be tailored to the strengths, and challenges, of every community across Wales.

Our recommendations

  1. We recommend that the Welsh Government works with the Chief Regional Officers to ensure that the regional business plans take into account the differences within regions, identify the actions that will address inequalities and benefit those on the lowest incomes within regions.
  2. We recommend that the Welsh Government reviews its Location Strategy to ensure a better spread of public sector jobs across Wales, and in particular deprived areas. This should include setting out how this approach will attract and relocate jobs to the strategic hubs within the South Wales Valleys, and to other parts of Wales, in particular those areas in West Wales and the Valleys set to lose EU Structural Funding.

What we heard

Employability

“How are you going to think about training and qualifications when you’re spending all of your energy thinking about feeding your family…you’re literally just surviving.” - Young mother, unemployed, Cardiff East
“I think there needs to be more of a structured way of working between the job centres and local organisations in the 3rd sector, providing CV, job search, upskilling support.” - Support worker, Swansea

Careers advice

Young people in our focus groups told us that they did not feel that they were taught the skills in school to help them find work, manage money and live an independent, healthy life.

Diversity and employability

Parents in particular spoke of the challenges of finding flexible employment, with one parent telling us:

"[It is] not really an issue to find a job, but it’s difficult to find an accessible, flexible job" - Young mother in part-time employment, Cardiff East

Our view

We welcome the move to more bespoke support based on individual needs. We believe this approach will help those furthest away from the labour market to develop the skills and experiences needed to secure decent, sustainable employment.

Our recommendations

  1. We recommend that the Welsh Government ensures that Working Wales continues to collect data on outcomes and experiences for at least a year after a person has successfully gained employment.
  2. We recommend that the Welsh Government pilots in-work progression support for the four foundational sectors it has chosen to prioritise. This could include areas such as skill council support or careers advice; and support for increasing understanding of transferrable skills and “on the job learning” to assist people progressing through organisations.
  3. We recommend that the Welsh Government works with employers in foundational sectors to pilot creating “job ladders” within firms to improve workforce progression.

What we heard

Zero hours contracts

“They need to be stopped. Awful things – cause people stress and anxiety.” - Service user, Swansea

Our view

We do not support the general use of zero hours contracts. The evidence we heard showed that, combined with low wages, they have driven the rise of in-work poverty. We want to see them only used where there is an overwhelming case that a level of flexibility is wanted for the employee. We welcome the Welsh Government’s approach to try to reduce the use of zero hours contracts in the social care sector and their commitment to use their financial power to develop the cultural change that will drive down their use.

Our recommendations

  1. We recommend that the Welsh Government place requirements on any company receiving Welsh Government support through funding covered by the Economic Contract or otherwise to minimise the use of zero hours contracts. As part of this, the Welsh Government should support organisations to overcome potential barriers to offering secure contracts. As a minimum, companies should have to offer employees the option to move onto secure contracts after a set period of employment, which we suggest should be 3 months.

Making a difference

The Committee would like to express its thanks to all those who contributed their views and participated in the focus groups across Wales.

Your views make a difference. Now is the time for the Welsh Government to grasp this agenda, and to take forward the changes needed to ensure better jobs help to positively improve people's lives.

You can read the Committee's full report on our inquiry page:

You can keep up to date with the Committee's work by following us on Twitter: @SeneddELGC

Credits:

Ruth and Dave - "Senedd ceiling"

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