Senedd Committee calls on Welsh Government to continue to support people struggling with basic household costs in light of ongoing levels of pandemic-related debt

New Report includes recommendations to consider ‘debt bonfires’ to write off public sector debt, extending the Tenancy Hardships Scheme and continued flexibilities in relation to the Discretionary Assistance Fund

The Senedd Committee on Equality and Social Justice has called on the Welsh Government to continue to support people struggling with basic household costs in light of ongoing levels of pandemic-related debt.

In her foreword to the report Debt and the pandemic, published today, Committee chair Jenny Rathbone says that while the broad package of UK and Welsh Government support has helped to mitigate some of the worst excesses of the economic downturn caused by the pandemic -

'The rising costs of living and the end of key measures of government support all point to a difficult period in the months ahead. With this in mind we set out to look at the impact of the pandemic on debt and indebtedness.

In times of economic hardship people are often forced to turn to debt to ease immediate financial problems. This short-term fix can easily create long-term problems for individuals. Although the extent of the debt problem has not been as great as was initially feared, our work has found that 18 per cent of adults in Wales – a higher proportion than in England or Scotland – have experienced economic hardship as a result of the pandemic. Debt and arrears on household bills and council tax have all increased, in some cases markedly. We expect some of these problems to get worse before they get better.'

As a result, the report suggests a number of steps that should be taken by the Welsh Government to ensure that advice and support reaches those who need it, particularly the most vulnerable, including that it should -

• commission expert research into the relationship between addiction and debt, covering addiction in all its forms including gambling, alcohol and other substance addictions;
• set out what additional measures it will put in place to promote debt advice services to vulnerable groups who are at heightened risk of debt so they can make informed choices about the options available to them;
• publish revised plans within the next three months to tackle fuel poverty, to ensure that these are in place well ahead of the next rise to the energy price cap due to come into force from April 2022;
• explore the feasibility of introducing ‘debt bonfires’ in relation to writing off aspects of public sector debt such as council tax arrears;
• ensure that the notice period for no-fault evictions remains at 6 months until the Renting Homes (Wales) Act 2016 comes into force;
• review the Council Tax Protocol for Wales with a view to considering strengthening it or placing it on a statutory footing;
• set out how it will ensure that it uses the legislative or policy levers at its disposal so that tenants across all tenures do not lose their homes because of debt accrued as a result of the pandemic;
• set out how it intends to promote affordable credit sources among those at heightened risk of debt over the next six months;
• explore the possibility of extending the Tenancy Hardship Grant Scheme to include low-income tenants in social housing who are not eligible for discretionary housing payments; and
• make flexibilities introduced to the Discretionary Assistance Fund as a result of the pandemic - that include providing access to five emergency assistance payments a year rather than the usual three and the ability to apply for an additional grant seven days after receiving one rather than the usual 28 days - a permanent feature of the fund.

For more information, see Worst yet to come for households struggling with pandemic debt from senedd.wales