Policy changes are needed to end cost-of-living crisis

As prices for housing, food, energy, and essential services keep rising, community groups continue to provide vital, frontline support locally.

Through our Invest Local programme and other initiatives, community organisations have responded to the cost-of-living crisis by focusing on three key strategies: reducing everyday costs through affordable food and low-cost leisure activities, improving access to welfare advice and support, and promoting dignity by tackling stigma and fostering inclusive social spaces.

While these locally driven, person-centred efforts are critical in supporting people through difficult times, they alone cannot address the deeper, structural issues at the heart of the crisis. To make lasting progress, bold and coordinated policy change is needed from both Cardiff Bay and Westminster.  

Although Welsh Government does not control all the levers needed to tackle the cost-of-living – given that welfare policy and most aspects of taxation remain the preserve of Westminster – there is still scope for transformative action within devolved powers. Crucially, stronger collaboration with Westminster is needed. Now is the time for to forge a genuine partnership in power that delivers meaningful, lasting change for communities across Wales.

The Welsh Benefits Charter

The introduction of the Welsh Benefits Charter, due to sustained pressure from the Bevan Foundation, was a welcome first step but we would like to see greater ambition and pace of implementing the Charter, and at statutory level.  

There are currently unexplored opportunities to develop a centralised application portal, or automated eligibility processes for Welsh Benefits such as the Council Tax Reduction Scheme, Educational Maintenance Allowance, Free School Meals and the School Essentials Grant, which would stop individuals from having to complete multiple application forms to access the support available.

As the work of community organisations has shown, signposting to advice and support providers, or even hosting advice providers in local settings (where people already attend activities) can reduce feelings of stigma for people accessing help. It is crucial that the Welsh Government recognises and invests in face-to-face provision of advice and assistance, ensuring people can access the support they are entitled to, as part of their work on a Welsh Benefits Charter.

Long-term, flexible investment in community anchor organisations

As our recently published evaluation shows, the role of community groups in lessening the impact of the cost-of-living crisis is vital in providing localised and person-centred support.  Funding that is long-term and flexible enables groups to adapt to changing circumstances and local needs with relative ease. It also ensures stability and sustainability for community anchor organisations, and those they support, as well as reducing the pressure to constantly identify funding, or reshape projects to meet funders’ criteria.

For all its limitations, community action offers relatively joined-up support in the face of the cost-of-living crisis. By integrating food provision, signposting to access welfare advice, social connection, and emotional support in accessible local settings, community groups create joined-up and coordinated responses that meet multiple needs simultaneously. This kind of locally embedded, person-centred support helps reduce barriers to access and fosters trust.

To continue providing support locally, community groups and organisations need access to long-term and flexible financial support. Welsh Government and the broader public sector must recognise and value this community activity and adequately fund it as it becomes ever more central to the support people access, providing a vital complementary element of support to the formal welfare system.

Investing in community anchor organisations, could be achieved by creating an endowment fund to provide long-term, flexible investment for these essential, yet often overlooked community organisations.

Lifting the two-child limit

At a Westminster level, one of the most impactful actions that politicians could take is to lift the two-child limit, which restricts Child Tax Credit and Universal Credit to the first two children in a household regardless of need unless exceptional circumstances apply.

Control over social security, including Universal Credit and Child Tax Credit, rests squarely with politicians in Westminster but its consequences are felt deeply and disproportionately in Wales. More than 65,000 children in Wales, 11% of all children, are affected by the limit.

With the Autumn Budget scheduled for November 26th we urge the Chancellor to lift the two-child limit and protect families who cannot afford life’s essentials. The consequences of the policy go far beyond financial hardship. Families impacted by the limit often struggle to afford essentials like food, clothing, heating, and school supplies, which directly undermines children’s ability to learn and thrive.

Moreover, existing research tells us that lower family income is associated with poorer child development. Evidence shows that children in affected households face increased stress, poorer nutrition, and reduced access to educational resources such as books and digital devices. These barriers not only affect academic performance but also damage emotional wellbeing and long-term development. If children are growing up hungry, cold, and excluded, the system is failing them. Scrapping the two-child limit would be a bold and necessary step toward giving every child the chance to grow, learn, and reach their full potential.

If people can’t afford to live, something is fundamentally wrong with the system they’re trying to survive in. Community-led action is powerful and rooted in local knowledge, but without bold and structural policy reform, it can only ease the symptoms of the crisis. Instead, officials and politicians in Cardiff Bay and Westminster, must make courageous decisions to truly tackle poverty and safeguard the groups who are at the forefront of supporting people through this new reality.