Poor people fall through a loophole in local funding
SOME parts of Wales with pockets of deprivation aren’t getting the resources they need because of a loophole in the local authority funding formula, it has been claimed.
Dimitri Batrouni, who leads the opposition Labour group on Monmouthshire County Council and has worked as a researcher for Newport East MP Jessica Morden, has written a report in which he calls on the Welsh Government to put the matter right.
He said: “It is not a revelation that poverty exists in Wales, that some people struggle more than others. Increasingly, however, Welsh society is becoming increasingly unequal.
“The principal driver of this is income and where you live. It is an issue that affects both rural and urban areas. The most unequal areas in terms of income in Wales are Denbighshire, Monmouthshire and the Vale of Glamorgan, but it is an issue that affects all parts of Wales. This trend, if we let it continue to grow, will cause a greater amount of social problems in the long term.”
Cllr Batrouni said Monmouthshire, the county he knows best, provided a good example of why current funding arrangements are not as fair as they should be: “It’s a wealthy county, but has hidden pockets of deprivation and high levels of inequality,” he said.
“Many people are shocked to be told that we have over 4,500 children in poverty in the county. In tandem with this, we have a big problem with income inequality – the second-highest level in Wales. In Chepstow alone, a family on one side of the town earns on average £17,000 more than a family on the other side.
“This huge disparity has real social consequences in our county. For example, Monmouthshire’s poorest pupils received the worst GCSE results in Wales last year, and the gap in achievement between the poorest pupils and their betteroff peers has been the worst in Wales for the last five years.”
Cllr Batrouni said the Welsh Government understandably focuses on measuring poverty and identifying areas that have high-concentration levels of poverty through the Welsh Index for Multiple Deprivation. Yet the Welsh Government does not measure income inequality or consider it during the policy process.
“One way this could be addressed is by empowering local authorities to develop local solutions to income inequality in their areas through the creation of an Income Inequality Grant,” he said.
“To be clear, it would be additional money separate from the Revenue Support Grant; the money would be proportionally distributed to all local authorities based on their income inequality levels; it would be assessed on the outcome of reducing inequality within a specific locality; the money could only be spent in areas with high child poverty rates; local authorities would be given the freedom to develop different models, appropriate to their locality; and there would be a two-year review of all schemes to understand what has worked, what has not and the general effectiveness of the grant.
“It is only a suggestion, there might be better methods of addressing this problem, but we must start this conversation and develop ways to tackle it.”
A Welsh Government spokesman responded: “We are committed to spreading prosperity and creating opportunities throughout Wales, which is why we have a cross-government approach to tackling poverty.
“We know challenges remain, but we are working hard, and alongside local authorities, to ensure people in all parts of Wales have the chance to thrive in a more equal and prosperous society.
“Our Economic Action Plan is vital in boosting the Welsh economy and key to making sure the benefits of sustainable economic growth are felt as widely as possible. Programmes such as Flying Start, Communities for Work and Families First are also important in narrowing the gap between our most deprived and thriving areas.
“This year we plan to introduce the socio-economic duty, which will ensure local authorities, and others, consider how their decisions might help to reduce the inequalities associated with poverty.
“The impact of a decade of austerity driven by the UK Government has been felt by communities throughout Wales, but this Welsh Government will continue to do all it can to support people in every part our nation to succeed.”