Y Pwyllgor Cydraddoldeb a Chyfiawnder Cymdeithasol

Equality and Social Justice Committee


Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Altaf Hussain AS
Jane Dodds AS
Jenny Rathbone AS Cadeirydd y Pwyllgor
Committee Chair
Ken Skates AS
Sarah Murphy AS
Sioned Williams AS

Y rhai eraill a oedd yn bresennol

Others in Attendance

Jen Griffiths Rheolwr Gwasanaeth, Cyngor Sir y Fflint
Service Manager, Flintshire County Council
Karen Davies Purple Shoots
Purple Shoots
Nicola Field Undebau Credyd Cymru
Credit Unions of Wales
Robbie Davison Rheolwr Gyfarwyddwr, Well-Fed
Managing Director, Well-Fed
Sarah Germain Prif Swyddog Gweithredol, FareShare Cymru
Chief Executive Officer, FareShare Cymru

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Angharad Roche Dirprwy Glerc
Deputy Clerk
Rachael Davies Ail Glerc
Second Clerk
Rhys Morgan Clerc
Sam Mason Cynghorydd Cyfreithiol
Legal Adviser

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Cyfarfu’r pwyllgor yn y Senedd a thrwy gynhadledd fideo.

Dechreuodd y cyfarfod am 13:29.

The committee met in the Senedd and by video-conference.

The meeting began at 13:29.

1. Cyflwyniad, ymddiheuriadau a dirprwyon
1. Introductions, apologies and substitutions

Prynhawn da. Welcome to the Equality and Social Justice Committee. We are continuing with our inquiry into debt and the impact of the rising cost of living, with our second session. I have had no apologies today. All Members are present, other than, unfortunately, Susan Lloyd-Selby from the Trussell Trust, who is unable to be with us today. Before I go straight into the session, are there any declarations of interest that anybody needs to declare? I assume that that's a 'no'.

2. Dyled ac effaith costau byw cynyddol: sesiwn dystiolaeth 2
2. Debt and the impact of the rising cost of living: evidence session 2

So, I'd very much like to welcome Sarah Germain, who is the chief executive officer of FareShare, as well as Jen Griffiths, the service manager for Flintshire County Council, and Robbie Davison, in charge of Well Fed. So, welcome to all of you.

In light of the fact the Trussell Trust isn't here with us today, I did notice in its evidence that there had been a sort of drop-off in the demand for food, marginally, in the month of July, when there was a cost-of-living payment made by the UK Government, but that it was then back up to really high levels again in August. I just wondered if you could, very briefly, just summarise what the current situation is, given that we have got your written evidence in all cases. Just how difficult is it for organisations that are endeavouring to ensure that everybody is eating and heating?  

I can start, if you like. So, the demand just isn't going away. It's going up, if anything. As an organisation ourselves that supports other organisations, we are finding that we are getting more and more requests for support. In addition, the organisations that we are working with are also asking for more food. So, the organisations that we are already working with are asking for more food, and we are always having more organisations asking us for food as well.

FareShare UK did a survey back in September-October time, and it found that 96 per cent of our community food members in south Wales were saying that they had had an increase in demand since January the previous year. So, that shows that almost every organisation that we are working with has seen that increase in demand. 

I don't know if people are being turned away. I know that we, and they, are finding it difficult to meet the demand that is there, and that demand is growing constantly.

Okay. Who are the main people who are using these services? We know, obviously, that anybody with children, anybody with a disability, and also private renters whose housing benefit isn't covering the cost of their rent, are in a desperate situation. Is that a reasonable summary of who you are seeing?

I think that it's across the board. There are all sorts of organisations. We work with all sorts of organisations. We work with everyone from homeless hostels, women's refuges, through to pantries and community kitchens. So, we work with a whole host of organisations, and I think that demand is going up across the board. But the highest levels of demand are within groups—. The highest demand groups are families with children, older people and lone parents. Those are the three highest groups that our community groups are saying that that they've seen an increase in demand from. 

I'd just add that there's a kind of new poverty going on. I don't know if I put in the evidence that we've submitted that we are noticing about a 20 per cent increase in people wanting good food services. What's been interesting, and almost alarming at the same time, is that there are people now coming through the system who have never been in need of food aid or, if you like, poverty services at all. Therefore, they don't know what to do while they are in them. So, for the first time, they are trying to make do with maybe visits to a food bank, maybe visits to a pantry, maybe relying on services like us. But, because it's the first time that they have been involved, they've needed to get involved in services like ours and others. The issue for them, when you're talking to them and you're meeting them for the first time, is that there's a panic—there's a real panic—that they don't know what to do next because they've never been in the situation before. That's coming through now. 


Thank you. Flintshire is fairly rural. We've got lots of communities that don't have access to the main town centres—we've got five county towns in Flintshire. And what we are noticing, as Robbie's just said, it's people who've never accessed the system. So, we've got support hubs where we offer advice and guidance, but people are coming in who won't access the benefits system because they wouldn't qualify and they don't meet those criteria. However, they're really struggling to pay their bills. It's eat or heat, feed your children or feed yourself, and it's almost like there's a squeezed middle who are missed by the benefits system because they simply wouldn't qualify. However, because of the cost of living, they're just really struggling to cope, and it's certainly something we've seen through our hub models in Flintshire. People we've never bumped into before are accessing services and trying to find ways to alleviate their situation. 

Given that there is clearly so much need, how are organisations managing to meet that need? Sarah, you said that you weren't aware of anybody being turned away, but if the public doesn't support your organisations, then the situation could become a whole lot worse, couldn't it?

Yes, I think they are feeling it—the organisations that are supporting people that are in this situation are starting to feel it themselves. They stepped up to the plate during the pandemic, they've been working really hard all the way through the pandemic to help through that, and then straight off the back of that we're into this cost-of-living crisis. So, I think the organisations are finding it hard. They are feeling that demand. I've got some stats somewhere if I can just find them. They're being hit by the cost-of-living crisis themselves as well, because obviously their bills are going up, the cost of food is going up, wages are starting to go up as well, so the organisations themselves are starting to feel the impact of this as an organisation as well. 

It's interesting, because the pressure on, if you like, the third sector is continuing to grow and increase, and it's important to note that. What we've been attempting to do as an organisation is—. We have got a completely different model. We've got a commercial model running alongside a social model, and we are trying desperately to move people away from charity alone and to get them to be contributors to their own well-being. And by that I mean we offer four weeks' worth of support that is free to access, which is meals for a week, but after four weeks we start to charge. But we start to charge at a subsidised rate. So, for four weeks, we charge £10 and people get £40 worth of food, and then for the following four weeks—so, it's 12 weeks in total—they pay £15. The reason this is important is because we are using our profits to subsidise the food, but what we are actually asking people to do is to take part in looking after themselves, moving them away from an over-reliance on charity and getting them back into thinking about their own well-being, at a cost that they can afford. Really, really important—good food has to be affordable, otherwise good food will just not be on offer to people. 

Thank you. Sioned Williams wanted to follow up on one of your comments. Sioned.

Diolch, Cadeirydd. Roeddwn i jest eisiau dilyn lan ar sylw Sarah o FareShare ynglŷn â'r cynnydd mewn galw. Yn y dystiolaeth ysgrifenedig, mae 75 o sefydliadau ar y rhestr aros a 42 o sefydliadau—[Anghlywadwy.]—mewn ardal benodol o Gymru neu—[Anghlywadwy.]

Thank you, Chair. I just wanted to follow up on a comment made by Sarah from FareShare regarding the increase in demand. In the written evidence, 75 institutions on the waiting list and 42 organisations—[Inaudible.]—in specific areas of Wales—[Inaudible.]

Those groups are primarily in south-east Wales, because that's where the majority of our members are. [Interruption.] Sorry.


Sorry, Sarah. We just have to take a halt for a moment because we've lost Sioned. Are you able to hear what Sarah Germain's starting to say? 

Chair, sorry. Could I just raise a point, which is that I'm having a problem hearing Rob's microphone? I'm not sure if anybody else is having a problem with that microphone. 

Well, I think the technicians can raise the volume on that mike. 

There is a red light here and it's just gone—

I think that means you're on. 

Can you hear me? Great.

Yes. So, those 75 organisations are across south-east Wales, because that's the majority of where we are. There is another waiting list in north Wales of about 10 organisations up there, and they're across the board. Yes, that's where the—. Yes. 

Ie, dwi jest eisiau gofyn, os gwelwch chi'n dda, beth ydy'r prif reswm pam mae oedolion yn dod atoch chi, yn enwedig—. Rydym ni wedi clywed bod pensiynwyr a phobl sy'n rhiant ar ben eu hunain yn dod i'ch gweld chi. Beth ydy'r prif reswm? Ai am eu bod nhw ar benefits neu nad ydyn nhw'n cael eu talu digon i fforddio bwyd? Beth ydy'r prif reswm, os gwelwch chi'n dda? Diolch. 

Yes, I just wanted to ask what's the main reason that adults approach you. We've heard that pensioners and single parents do access your services, but what are the main reasons? Is it because they're on benefits or because they're not being paid enough in employment to afford food? What's the main reason? Thank you. 

So, again, I think there's a variety of reasons, and some of those reasons have changed. It's not just people that are on benefits anymore; a lot of people, as other people have said today, are that squeezed middle—those people that aren't on benefits but are now struggling because the cost of living has risen. They used to be able to cope on what they were earning, but they're now starting to struggle because the cost of living started to rise. And I think the majority of our charities are saying that they're starting to see people for the first time again—a similar theme that's come out before. The reasons behind that, the majority of them are coming to them and asking for food, but there are other things that they're asking for—for help with fuel bills, help with transport costs. There are all sorts of different reasons that they're going to them. 

I was curious about the type of subsidised food that is supplied door-to-door at a very reduced cost. What type of food is it? Is it balanced and does it contain sugar and salt? Does it do all the breakfast and two meals? Is it chilled or frozen, because, effectively, how they are trying to, you know, warm their food, and other things? So, that was not clear in their report, and I'd be grateful if you'd let me know about the facts of this or how it is supplied. 

Robbie Davidson, Altaf wanted to know what type of food was being delivered in the mobile shops? 

There's a mix. There are cook-at-home meals for people who can actually cook the meals from scratch at home, and the focus is on the evening meal, but the focus is also on staple goods. So, for instance, in the meal box that we provide, if people choose the meals—. And it's important to say that people can choose, so every week we contact and they contact us, and they're selecting from a menu of meals. Once they've selected the meals they've chosen that they can cook at home, then we deliver recipes and the ingredients to do that, and then the staple goods are the milk, the eggs and the bread, and so on.

If people are struggling to cook at home—and our experience is that most if not all people, even when they are struggling with utilities, can get access to a microwave at some point—we deliver in ready meals. So, as a comparator, I would draw your attention to Tesco Finest ready meals or Marks and Spencer ready meals, and the quality of the meals that we provide are on that basis. Every meal is nutritionally balanced, all of the meals are signed off by a dietician, and we have a bank of really qualified chefs who bring those meals together. Just to be accurate, we model all of our meal supply on the top 10 meal choices that people naturally go to, to make sure that they fit with family lives.


Okay. Thank you for that. Before we dive into further information about food, can I bring in Sarah Murphy, just to identify a little bit more information about how this could be done differently?

Yes. So, quite an open question, so it would be really good to get your thoughts on this. So, for all of you: to what extent has cost-of-living support provided by the Welsh and UK Governments helped the households that you are supporting, and how long lasting have those impacts of support been? Whoever wants to go first. Sorry.

Thank you. I think the Government schemes have been really useful, whether they're Welsh Government or UK Government. I think the fuel schemes in particular, where they've moved away from people who are entitled to support and to just helping households, has been really, really useful. We had a tenancy hardship grant scheme during COVID, which was designed to support people who weren't accessing benefits but had a shortfall and were struggling to pay their rent. Unfortunately, the grant conditions with that were so tight that the take-up was really low across all 22 local authorities. It was a really good scheme in principle, but the criteria were so tight, we had lots of money, but we just couldn't support people through that criteria. So, that kind of scheme would be really useful, again, to support people who wouldn't necessarily be able to access the benefits.

From a Flintshire perspective, our discretionary housing payment—we pay way above the Department for Work and Pensions contribution; we have done for a number of years, but we've seen an unprecedented increase in that, alongside huge pressure on homelessness and temporary accommodation, and it's all one big picture, really. And we are seeing people accessing temporary accommodation and homelessness services who wouldn't traditionally have fit that model. So, it's lots and lots of pressure for everybody. I think the grant schemes, certainly in the last 18 months, I would say, are significantly better, because they're much more broad and they move out of that eligibility criteria. And, in Flintshire, we've had an excellent take-up and we've marketed, and I think most of the other local authorities have as well. A little tiny bit more lead-in time would be useful—and we have turned all of the schemes around on a sixpence, because we've had to, and, as I say, we've had really good take-up.

I think the uniform grant scheme as well, the extension of it across the extended years has been really useful for us, and again, we've had a really good take-up. So, we're pushing the take-up from a local authority and a partner perspective, and I think what's helping around the hub models is that we're arming everybody with the information about all of the support schemes. So, anybody who's prepared to listen to us, we talk and we join things together. So, our support hub model, we take that out with us as well, so as our partner teams or third sector teams are out and about in the community, they're armed with all the information, and that's really key as well. Certainly, with the mobile shop, that's been a phenomenal take-up in those communities, and people are pre-ordering from there now. So, going back to Robbie's point: people want to pay; people don't want to have to rely on charity, and for us, it's about getting that model right so that we can support those people who are struggling currently. The food dynamic is really important, because if people are hungry, they're not going to be able to concentrate and cope, and you know yourself, if you're hungry, you can't think about anything else other than, 'I'm hungry'. So, combining all of those services together, the people who access the services are just—. It's such a broad brush. They might be lonely, isolated, struggling—all of those things that I think we mentioned earlier. Recovery from the pandemic has never really been dealt with, because we've lurched straight into another crisis. So, what we're bumping into is a combination of all of that. 


Sarah, if you are going to come in next, I was just going to ask you as well at the same time—. You said in your written evidence that the effectiveness of support schemes in reaching the intended recipients appears to be variable. So, it would also be very helpful to hear, based on your experience, which schemes have been most effective and which ones have also worked less well.

Okay. So, you're asking about how the support has helped. The evidence that I've given you is based on feedback that we've had from our community food members, so I can only relay to you what they've relayed to me. I'm one step removed from the front line, so to speak. Yes, they were saying that it has been variable. I think what they were saying was that the support has been vital and it has made a difference, but as with all of these things, it has never been quite enough, and also a number of people who they were expecting to have taken some of those schemes up haven't necessarily taken them up, from the evidence that they've given back to us. So, it's not always getting out to everybody who might be eligible for it. Those were the kinds of things they were saying. And also, a really big theme—and I think this has been in the news over the last few weeks as well—was about the issue of prepayment meters and the impact that that has on the amount of support and the effectiveness of that support as well. So, I think it has been—.

And I think also there is a bit around the fact that the Welsh Government have been helping third sector organisations as well. There has been support that has gone out to them through grants, and so forth, to allow them to be able to provide services. And I think that really came through as well, how vital the third sector have been in supporting people through this and how vital the services that they provide are, because it's not just about food. Most of the organisations we work with are doing so much more than food; they are trying to give advice, make sure that people get the help that they want, they're providing those loneliness and isolation services for older people so that they can come and have a meal together, rather than just heating something up at home. All of those things, I think, have been really vital in giving people the tools and the resilience to move forward on some of this as well. 

That's really interesting. Thank you very much. And finally, Robbie. 

Just to join both commentaries, really. Jen has mentioned in detail how some of the benefits have been rolled out, but I wouldn't mind coming back to something earlier in the evidence, and this is the difference between people who are hardened to poverty—. So, we're on the front line every single week. So, for people who are hardened to poverty, this is just something else happening to them. This is another wave of austerity. This is the way it's being viewed: it's just more austerity, told slightly differently. Whereas people who are new to poverty, the people who are struggling right on the edge and are just about to come over or are falling over, for them, it's really scary, because they do not know how to cope.

Now, interestingly, I think one of the things where there's a gap, and we've talked about it in Flintshire, is that some of the services are not ready for these people who are new to the poverty dynamic. They're used to dealing with the hardened people who have been in poverty for a long time and in many ways, are coping with this new layer of struggle. But, it's incumbent on us all to try to find ways to get to the people who are just falling into the poverty trap. I say it with some action, really, because these are not small numbers of people, these are large numbers of people who are actually falling into the poverty gap, and they are not able to cope currently. And it's an important factor.

And just to clarify, then, you would put that down to the cost of living, the various different things that are going up, costing more. Is that what you would say is tipping people into that poverty, or are there other issues?

No, it's absolutely that. And interestingly, all of us are about to fall into a new wave of heat and eat, and it's going to affect us all when the subsidy disappears, and people are not ready for this. People are struggling so badly right now that there’s nothing else to give, and these are people who are hard-working—hard-working with dependent children—and they really, really start to struggle and then here comes the next wave. We’re not ready. 


Okay, just before we move on, Jen, one of our colleagues, Jack Sargeant, has been particularly vocal about people being forcibly disconnected from their electricity and put onto prepayment meters without their permission. So, is this something that’s been particular to Flintshire, or—? How have Flintshire council responded to this activity?

I don't have that information directly.

But I do know that it has happened in Flintshire, and I’ve had that information from the various support services and people who are accessing the support services. The prepayment meter is another evidence of a poverty premium, if you like. It’s a bit like the prepayment meters cost more, but you don’t have them unless you’ve got no money, so that doesn’t make any sense. And it's a bit like your local—. I talked about Flintshire being quite rural, and your local Tesco Express is more expensive than your Tesco in town, and you can’t access your Aldi and all of those cheaper supermarkets. It’s like a poverty premium and I think the prepaid meters are just another example of that.

In terms of poverty, we talk about poverty all of the time, and I think most of us have got fixed ideas in our mind about what poverty means; how do you classify that somebody is in poverty? And I think most of us would think, ‘Well, the benefit system is kind of around where that benchmark is’, and that boundary is being pushed all of the time, and we’re seeing that more and more for people who have always been up to date with all of their bills, and now they’re not, but they’re still working as hard as they’ve always worked, but it doesn’t meet all of their expenditure now, and the prepayment meters are just another example of when somebody who’s been struggling and can’t pay their bill going onto the premium rate through the prepayment meter.

Thank you, Chair. Can I ask about tackling food poverty in the current climate, and begin by asking how effective you think Welsh Government is being; how effective their interventions have been in tackling food poverty as part of the cost-of-living crisis?

I don't mind going first. 

I can draw a conclusion from the last couple of years—so the last three/four years, and I can make a direct comparison to what was going on in England. I would say that Welsh Government have been far more progressive with their approach to trying to tackle food poverty, and my experience has been that being able to talk directly to Welsh Government is easy; a lot easier than it would ever be in England, so, that’s praise that I’d like to pass on. But I think interestingly, it’s also how quickly the support and the funds come out; it moves quite quickly, in my experience, in the last couple of years, and again, comparing to what goes on in England, it’s far more fluid, so the support gets to where it should be quicker and much, much easier.

Yes. I can add to that, I think. So, in terms of tackling food poverty, I think that fits in. In some ways, you don’t need to take that out of the whole picture poverty, as in, people who are suffering from food poverty are probably suffering from poverty in the round, and so, I think in terms of the effectiveness of some of the schemes that are there, then the same things that I’ve said before would be there. But I think that there has been some work outside of that that is specific to organisations that are helping to tackle food poverty, if that makes sense. So, organisations such as ourselves and some of our community food members have received support that has helped them in that way, and I think that that help has helped people. Because they've been receiving food, it's allowed them to have extra food from another source, which has enabled them to have extra money in their pockets for something else, if that—. Hopefully, that makes some sense. And organisations that are helping to tackle food poverty are helping people to address some of those other things because of the services that they provide in the round, because they're not just about giving somebody a food parcel; they are about giving them the advice and so on as well. I'm not sure if that does answer that, but, hopefully, it helps a little.


I think that the grants that we've had from Welsh Government schemes have been effective in terms of being a little broader in their approach and less—. I mentioned the tenancy hardship grant before, which was very strict in its criteria. When we've got a national model for a grant scheme, then trying to apply that and get it out locally can sometimes be a challenge, because, obviously, each of the 22 areas have got their own differences. I think it's been a huge success, working with third sector organisations, who have absolutely come into their own during the pandemic and since. From a local authority perspective, those links and connections have been—. Well, we couldn't have managed without them, and I think that those partnerships are going from strength to strength.

So, what we've found in terms of access to Welsh Government schemes has been a partnership approach has been the best way to get the most money into Flintshire to deliver the most difference. We've been quite creative in terms of how we've applied for different grants from different areas. It's a huge learning curve. I think, if I may feed this back, it would be useful if we could have broader grants, because food poverty is not in isolation, and I think that's what Sarah was just saying. We can have a grant for food poverty, but from somebody who would deliver at the front line, using that grant and those funds, the broader the opportunity we have to use those grants means we can make more of a difference. Sometimes, the grant conditions are so tight that we can't necessarily apply it. So, I think maybe what I'm asking for is a broader approach to allow the local areas, whether that be third sector, the local authority, charitable organisations, to be able to use that money in a way that fits their community, because not all of the communities are the same.

Flexibility, then; much more flexibility. So, in-work poverty is becoming increasingly apparent, and, with in-work poverty, there's obviously food poverty, and I've been hearing, particularly from high schools, that there have been instances of schoolchildren being turned away at the till, because they've built up debts that their parents are unable to pay. Apart from it being incredibly embarrassing and humiliating for those young people who endure this, suffer this, it also contributes towards their food poverty. Are you picking up any information and any intelligence in regard to this problem within schools?

Not directly, although we are aware that some of the take-up schemes for the free breakfasts and things weren't working, and we're working with our schools to actually look at offering something broader on the basis that the breakfast that the child isn't taking—it's normally in high schools—could be because they can't get there on time. They might have caring responsibilities or a chaotic lifestyle and can't access that breakfast. We've been running a scheme in Flintshire for the last two years, working with a local fruit provider to provide free fruit into school so that there's no—. Anybody in the school can have access to the free fruit, recognising that's not a meal.

I haven't had any direct feedback about children and young people being turned away at the till, but there are huge challenges around school food. I think primary is probably a safer environment than the high schools. I think the biggest risk is in the high schools, actually. But it's not something I've come across in terms of children being turned away; I haven't had that feedback.

But with our community support and outreach work, we are trying to support the families as a whole, whether that's via the child in school or whether it's via the parents outside of the school, so there are lots of things that we can do. It's not something that I've come across directly, but it will be happening, I would think. Either the child's not accessing the canteen service because they know there's no money on the account—. That could be very real. A lot of work has been done around dignity and free school meals, and actually it's a cashless system and all of that, and I know that the free-school-meal allowance goes directly onto the account. I think there's still a long way to go between closing the gap in options for children who might access free school meals and those who don't. There is still a huge gap in terms of what those children can access.


Just to add, tomorrow I'll be presenting to the school food cross-party group a particular school food model that we've got. One aspect of the model is that we will tackle hunger with any school that we work with. So, if any child is part of a school and is hungry, then they will not need to declare themselves hungry except to teachers, and others, and we will feed them for as long as we're working with that school free of charge. This is an important step forward, particularly when we're looking at universal primary school meals. 

Okay. We'll come on to free school meals in a moment. Ken, back to you.

Thanks, Chair. This is a question direct to Robbie, actually. You developed the food store as an alternative to foodbanks. Can you just tell us why you chose the approach that you selected and why you think it's a better way of doing things?

First and foremost, it's a concentration on meals, so people are provided with meals to eat just like all of us eat meals, and the idea behind the food store is to allow people to eat well when they're in crisis. We use—. I think I put it in the submission: if people eat well, they cope well; if they don't eat well, they do not cope well. So, what we're trying to do is get people eating well whilst they're at the real pitch of their crisis. The big difference in this is to give people choice, allow people to eat as normally as they would if they had money in the first place, and then move people away from the crisis that they're in—so, the over-reliance on charity—to a place, as I mentioned earlier, where they're paying towards their own well-being.

Now, what we've found is that 75 per cent—. When we started this, there was some commentary about whether people would actually start to pay towards the food themselves. We're converting 75 per cent of the people, who are paying £15. So, 75 per cent of everybody who started getting food for free, at the end, the final four weeks, are paying £15 towards the food. That's because the food is relevant to their lives; that's because—often for the first time—people are cooking at home again or eating well at home. And then what they're seeing is that the value is in the service that we provide. So, they're willing to pay the £15. What's important for us, though, is don't let people fall off the end after the 12-week period. So, what we do is we wrap that around with our mobile shop approach, which allows people then to move into the subsidy position where they're buying ready meals from us at £2, which is cheaper than they can get anywhere else, and, importantly, they can buy meals for a family of four for £4—again, much cheaper than they can get anywhere else. And what we guarantee is that the food will taste fantastic. You've got to make sure that the food tastes well as well.

Excellent. Thank you. You've answered my final question, actually, about the subsidy. So, thanks, Chair.

Yes. I'd just like to add a bit to that. Quite a lot of our community food members are not what you would call foodbanks; they are providing other services. So, a number of our members are running community pantries, which sounds very similar to your food store. So, a large number of our members are running community pantries, and those pantries tend to charge a membership fee to be part of almost like a food club, where you can come along and choose your own items from what they have available that week, and there will be a range of fresh food and veg, dairy, all sorts of different things there. One of them is actually running a mobile pantry as well, and then the other side of that is community meals. A lot of our members will provide community meals, whether that's in a community cafe or whether that's one of the homeless hostels providing meals, where the people that come in and access meals there are paying £1, maybe, for that food as well. So, a lot of our members are providing that service. That isn't a free, hand-out service. It's something that people can feel proud of being part of as well.


Thank you. Ken, did you have any further questions? Or shall I—

Okay. Can I call Altaf Hussain? You've got some questions on longer term objectives.

Yes, thank you very much. All of you have said that foodbanks are not the answer to tackle food poverty. What would you prefer to see, and what role can the Welsh Government play in delivering that over the longer term?

Sarah, FareShare's website, examining the use of foodbanks, confirmed that seven out of 10 charities say that 73 per cent of people are accessing support for the first time; 51 per cent accessing it despite being in full employment; and 60 per cent are families with children, which the Chair had already asked about. What does this tell us about the short to longer term challenges in responding to people's needs?

Yes. From what I understand, you're asking about how we can support people longer term. The FareShare model is that we use surplus food from the food industry. It's good food. It's just otherwise going to go to waste, because it hasn't got a commercial outlet, for all sorts of reasons, but it's still good food. Because of that, we find that it is a long-term solution, because it's not asking people to donate food. And in terms of the organisations that we're working with, I think they're trying to help people. It's just that at the moment it's really difficult to find that long-term solution and that long-term way out, because the prices are just keeping going in the wrong direction, so more and more people are getting pulled into it.

But we do need to look at not just having a knee-jerk reaction to some of these things as well, I think. We've got to look at what can we immediately do to help people, but what is the long-term solution out of that. I think some of that might be around—. And it's difficult to say this at the moment, because people keep saying, 'Well, if you put wages up, that's just going to exacerbate the situation,' but I do think that some people that are in these situations are in lower-paid jobs, or are in short-term contracts or whatever, so we do need to look at people having good employment, encouraging the real living wage in organisations out there. All of these things, I think, will help to fix that situation longer term. Yes. I don't think there is an easy solution, unfortunately.

In answering the question, I'd like to split out food poverty from poverty per se. It's really important. Poverty is kind of a confluence of all kinds of things, unemployment and so on—we know what poverty is. Interestingly, food poverty is the lack of availability of good food, and, if people are eating well, they are no longer in food poverty. They're still in poverty, often, but they're no longer in food poverty, and we kind of need to differentiate between the two. It's a well-known and well-researched statistic that eight out of 10 people do not access food aid services at any point, so where are these eight out of 10 people going to receive their assistance? We've been, for quite some time now, concentrating on how do you create solutions. We are wholly focused on food poverty and making sure that people get decent food when they are in crisis. So, our model—and the model is in play in other areas as well—is how, as a social business, can you use your profits to make sure that you are subsidising food for people to access that will lift them out of food poverty.

It's probably not for today, and I may be touching on it tomorrow at the cross-party group, but I really do believe—particularly around universal free school meals—that no child in Wales needs to go hungry while that kind of provision is available, if that provision is married to a system and model that focuses on retaining the social value within the system to make sure that works on behalf of children all of the time. So, to repeat, I really do not believe that food poverty in children in schools is necessary once universal free school meals are rolled out.


Thank you. I'd like to come back to you. Can you tell us how your approach will help to tackle food poverty in rural communities over the longer term? And, over the longer term, is this an approach you plan to roll out beyond Flintshire? What are the potential challenges and opportunities from doing this? 

The mobile food store and how it will be in the long term is about everything that Robbie has just said. It's a paid-for service—people pay for that service. Interestingly, on the mobile food stores, the biggest customers in some of our rural areas are single men who are on their own and have never really cooked for themselves or don't access that. So, we have a huge customer base already. And I'm not saying that those people are necessarily in food poverty. Well, they are not in poverty, but they are in food poverty because they can't access good food, or they don't know how to access good food. So, as Robbie has just said, it is a wider picture around the difference between poverty and food poverty.

In terms of it being a legacy system, it's a paid-for service, so it doesn't rely on grants to operate. So, it's not a project. I think that's the big thing: it's not a project. It is a legacy service and provision that's operating in Flintshire, and will continue to grow if it's funded to begin with. Then, it will grow itself after that, because it is a commercial, social model. 

Jen just touched on it, so it just made me think. It would be useful sometimes, in the use of language that we have on our money and Welsh Government support—. For us, you see, we see the grant as investment into services: so, investment into creating a solution to the problem, rather than it being a grant to fund something that has already been there in the first place. I think that it sometimes helps to say that the Welsh Government is investing in solutions, rather than providing grants to support what is currently in existence. 

Diolch, Gadeirydd. Gobeithio bod y cyswllt Wi-Fi yn iawn. Rwy'n cael problemau. Maen nhw'n gweithio ar y ffordd. Roeddwn i eisiau gofyn cwpl o gwestiynau ychwanegol am brydau bwyd am ddim. Rŷch chi yn barod wedi cyffwrdd â photensial prydau bwyd am ddim i fynd i'r afael â thlodi bwyd. O ran Well Fed a Chyngor Sir y Fflint, rŷch chi wedi ymrwymo i fwydo pob plentyn a'u teuluoedd nhw yn ddi-dâl, cyhyd â'u bod nhw mewn argyfwng. Allech chi egluro i ni sut yn union rydych chi'n defnyddio'r ddarpariaeth prydau bwyd am ddim i gefnogi'r teulu cyfan? Sut mae hynny'n gweithio?

Thank you, Chair. Hopefully, the Wi-Fi connection is okay. I'm having problems. They are working on the road. I just wanted to ask a couple of additional questions on free school meals. You've already touched on the potential of free school meals to address food poverty. In terms of Well Fed and Flintshire council, you've committed to feeding every child and their families, free of charge, for as long as they're in crisis. Can you explain to us how exactly you use the free school meals provision to support the whole family? How does that work?


We're in discussions now with Newydd, the current school food provider, and we're having conversations in Wirral, too. How the business model works—because it is a business model—is that we produce meals at scale. So, for instance, it wouldn't work commercially if we were only working with one school, because there's not enough income from the service to be able to provide just back to one school. But once you start to be producing meals in multiple thousands—. Let's, for argument's sake, say we provided 50,000 meals per week. How we use our profit from that provision is different from other providers. As a social business, we're choosing to use some of our profit to reinvest, to provide meals back to the children and their families.

We've modelled this, we know it can be afforded, but it comes back to how do we retain, how do we invest, to make sure that the social value is retained on behalf of the children. And that value in the first place comes from the increased provision, which is the universal approach, and then those increased numbers drop in, as meals we're going to provide, and then we use our profits to make sure that we reinvest back into the schools themselves. What's important is that, when people are fed well, when children are fed well at the point of their crisis, and their families, they do not stay in food poverty for that long. Because they've eaten, they're moving on, and then they move on to something else. If they don't get access to decent food or no food at all, they remain in food poverty and the problem becomes bigger. So, there are a number of facets to this, but crucially, because of a larger provision of school meals, and because we're a social business, and how we use our profits, that's how we can pay to make sure that people access free food at the point of their crisis. I hope that was clear. 

Diolch. Oes yna fesurau y dylai Llywodraeth Cymru eu cymryd i wella'r gallu i gael gafael ar brydiau ysgol am ddim mewn perthynas â disgyblion ysgolion uwchradd, a disgyblion ysgolion cynradd nad ydyn nhw eto mewn grwpiau blwyddyn sy'n cael y ddarpariaeth am ddim?

Thank you. Are there measures the Welsh Government should take to enhance access to free school meals in relation to secondary school pupils and primary school pupils in year groups that do not yet receive universal provision?

Thank you. I think take-up of free school meals has always been a challenge; that's not new. I think there is a still a big gap in terms of those that would be entitled to free school meals under the current scheme that don't access it, for whatever reason. I think there's a lot of intelligence we need to gather around those children and young people and their families as to why. We've done lots of targeted support at Flintshire, where we've used our internal data to recognise groups where they aren't claiming but should be, and going back to the model I mentioned before about everybody having access to all of the information, and all of the understanding about the different schemes. We do significant targeted approaches each year to try to maximise those people who are entitled to claim the free school meals. Obviously, the free school meal claim also benefits the school directly, doesn't it, with the additional grants that the school directly can gain. So, it's part of a wider piece of work, and it's ongoing. I think the universal free school meals will obviously assist with that greatly, although the entitlement to free school meals will sit alongside that, and we're just working out how that's all going to work at the moment. Engaging with the children and young people in the schools and in and around their communities we hope will have that effect, and arming people with all the information about what people could be entitled to. 


I think that the Welsh Government should be congratulated for taking the universal route, because it's a big and bold step. But we have to remember and imagine the pressures that are on the school kitchens to make this work, and to make this work in a compelling way that draws in parents. I have an ideal in my head that wouldn't it be fantastic that every parent trusted school food that much that everybody would stay for school meals, and the teachers would like to eat with the children, and so on. I think that's the environment that we would all like to see. It's one of the outcomes we'd like to see from the universal roll-out. And then extending it into secondary schools as well would be an amazing piece of work. 

Diolch yn fawr iawn, Gadeirydd. Mae gen i gwestiynau i chi i gyd ar wahân. Mae'r cwestiwn cyntaf i Jen, os gwelwch yn dda. Rydym ni wedi darllen tystiolaeth gan Gyngor Sir y Fflint, ac rydych chi'n glir iawn am y bwlch o ran yr argyfwng costau byw ac angen bwyd hefyd. Ydych chi'n gallu jest rhoi mwy o fanylion, os gwelwch chi'n dda, ar sut ydych chi'n cefnogi teluoedd yn y chwe maes rydych chi wedi awgrymu? Diolch yn fawr iawn. 

Thank you very much, Chair. I have some questions for you all separately. The first question is for Jen, please. We've read evidence from Flintshire County Council, and you're very clear on the gaps in the cost-of-living crisis and the need for food interventions. Can you give us further details, please, on how you support families in the six key areas that you've identified? Thank you very much.  

Thank you. Yes, I'm happy to do so. We've got two former COVID support hubs that we've developed in Flintshire, and so over the last two to three years we've been pushing forward with those models. Obviously, running a fixed hub in a town isn't necessarily suitable for everybody. When I talked earlier about arming everybody with the information and building on the partnerships and making every contact with our residents count, that's part of the journey we're on. We've still got a long way to go—we're not there yet—but the support hub model, whether it be fixed or whether it be part of a dispersed work group, is working for us in Flintshire. We're kind of rolling forward from crisis to crisis. We developed the warm hubs model very quickly at the end of the summer last year ahead of the fuel poverty crisis. For us, it was about understanding what assets we had and where we could deliver straight away.

Certainly, for our older people, where we've got the majority of our hubs, we had the community assets within our sheltered housing schemes. So, it was about maximising the use of our assets that were available, encouraging staff to skill up in different areas, and think broader than what might be written on their job description. If we've got accommodation support staff, whose job is generally the good neighbour scheme, being on call and things like that for older people through our sheltered schemes, actually, it's now about them encouraging people into the community centre, tackling the loneliness and isolation—there's soup and company during the day, and the idea of it was that they could access the community space and not have to put the heating on during the day. That was as simple as it was to begin with. 

Actually, a lot of those communities have taken over the running of that themselves. So, part of it is skilling up and accessing people and our partner organisations to say, 'That might not be your job, but this is the right thing to do at the moment in the broad spectrum of supporting people'. And actually, the next stage, which is really positive for us to see, is that those communities are starting to support themselves and take these things over. And again, going back to an earlier question, that's where the legacy will come from. That's where the sustainability will come from—so, providing that additional quite intense support to begin with, and then those communities evolving and supporting themselves, because that's what it should be about. 

As a local authority, obviously, we're restricted in terms of our funding to be able to deliver all of that, which is why we went back to what assets have we got available, in buildings or whatever, what assets have our staff got, and, actually, how can we push that to make these new initiatives happen and work, ultimately, for the people in our communities, because that's our job, isn't it, to support those people.


Diolch yn fawr iawn. Felly, mae hyn yn dilyn, i ddweud y gwir, y cwestiwn sydd gen i nesaf, sydd i Sarah, os gwelwch yn dda. Sarah, yn eich tystiolaeth, rydych chi wedi sôn am sut mae'r Llywodraeth yng Nghymru yn gallu cefnogi'r trydydd sector. Ac eto, ydych chi'n gallu jest rhoi mwy o fanylion ar sut mae'r Llywodraeth yng Nghymru yn gallu cefnogi'r trydydd sector i'r tymor hir?

Thank you very much. And this question follows on from what you've just said, and it's for Sarah, please. Now, Sarah, in your evidence, you've mentioned how Welsh Government needs to support the third sector. And again, can you just give us some more details as to how the Welsh Government could support the third sector in the longer term?

Yes. As you say, I've said about that. I think there are a number of things. I think part of it is about recognising the difference that the third sector can make, and I don't think this is just a job for the Welsh Government; I think it's about, similar to what Jen's been saying, about bringing them into the mix of the support that is available and understanding and recognising that. I think sometimes the third sector gets pushed to one side a little bit in these things, so bringing them in and making them a true partner in the support that's available, I think, is really key.

A couple of things that they've told us that they need were things—. Well, you won't be surprised to hear they all want more funding, but that came out quite clearly. And I think some of that is around the longevity of funding as well. Quite often, funding is available for a year or for a short-term project, and so having longer term funding for organisations is quite key, and then that allows you as an organisation to put plans in place, thinking about how things are going to move forward, rather than it just being that short-term fix.

And then I think there are support services that are sometimes only available for certain sections. So, there are things like training that is sometimes maybe only available for businesses or a certain sector that could be made available to a wider audience and the third sector might therefore benefit from those as well. But equally, they could be a provider of some of those services at the same time as well, because they're quite skilled in certain areas.

Diolch yn fawr iawn. Ac wedyn, y cwestiwn olaf i Robbie, os gwelwch yn dda. Roedd gen i ddiddordeb mawr i glywed bod yna wahaniaeth—a dwi wedi meddwl amdano fo hefyd—rhwng darparu bwyd ac wedyn darparu prydau bwyd. Ie, diddorol iawn clywed hynny. Oes gennych chi dystiolaeth sy'n dangos beth ydy'r gwahaniaeth, hynny yw, yn darparu bwyd yn lle darparu prydau bwyd? Diolch yn fawr iawn.

Thank you very much. And the final question to Robbie, please. I was very interested to hear that there is a difference—and I have been thinking about it as well—between providing food and providing meals. It was very interesting to hear that perspective. Do you have any evidence what that difference is, that distinction between providing food or providing meals? Thank you.

Evidence: if you are referring to academic evidence, we don't have any of that, but what we have is more than anecdotal, in the sense that we're on the front line every single day, every single week, every single month. So, for instance, the services that we provide, besides the food store, which was mentioned before, are that we manage cookery training within communities. We're now training up to 36 people per month with cookery training, and what we do is, we provide meal bags with recipes and recipe cards in those bags, so it's easy for people to cook. Now, interestingly, at the end of these programmes, we are converting 80 per cent of people who are coming to the training to being customers of ours. Now, previously, over 60 per cent—I think I mention it in the submission that we gave—over 60 per cent of everybody that we bump into are not cooking at home at all. So, 60 per cent weren't cooking and we move into a place where 80 per cent are becoming customers of ours because the food tastes great, it's easy to cook and it's affordable, which is really, really important. And I think what's most notable in this is that, particularly if I go back to the food store, which is important, as I said before—. I'll give you a quick story. Sometimes, when we show up for the first time, because we deliver door to door, when we show up for the first time, people look at the meal box and go, 'Wow, what is this?' because they haven't cooked for such a long time. Then, interestingly, after a few weeks of cooking and really getting into how easy it is to cook the food and how tasty the food is, it becomes second nature and they want to pay for the food at the end. So, that 75 per cent conversion is significant again. So, if we're looking at figures that are, for us, from a practice-based point of view, we've got this 80 per cent conversion around cookery training, and we've got a 75 per cent conversion because the food tastes great and also it's affordable. So, it's a big leap from what was previously not cooking at all. 


Diolch yn fawr iawn. Diddorol. Diolch, Cadeirydd.

Thank you very much. That's very interesting. Thank you, Chair. 

Okay. I think we've got a couple of minutes, so I'll just use the Chair's privilege to ask you a little bit about supply lines, because I represent a Cardiff constituency and the wholesalers are saying it's really difficult to access fruit and vegetables—and I can see Sarah Germain nodding. So, I just wondered how bad things are up in the north-east of Wales, whether you've got better supply lines through Liverpool and Manchester or how are you resolving this, because the wholesalers are saying that so much of what is available is simply not sellable because the price that they would have to sell it at without making a loss, people won't buy it. 

What we know from our supply chain is that a couple of suppliers are choosing not to supply fruit and veg because of the cost. So, we're able to get fruit and veg, which is primarily coming from Liverpool and Manchester fruit and veg markets, but some are choosing not to deliver fruit and veg because, as I said, it's too expensive. So, what we are looking to do now, which is important and these conversations are starting next week and the following week, is that we're looking to work directly with farms, because we have a big production facility, and we're looking to work directly with farms and to buy at scale. And then, where we can buy at scale, we're going to bring that in and prepare on that basis. So, we're really looking to shorten the supply chain where we can, but it's not always possible in the location that we're in because of the supply chains that surround us, or the lack of supply chains that surround us. 

The whole of the food industry is feeling things at the moment. The whole of the food industry has just been hit time and time again over the last couple of years, with Brexit, the war in Ukraine is affecting the supply chain, the cost-of-living crisis is affecting food businesses as well—it's affecting their energy costs, it's affecting their fuel costs, the costs of them buying things to make things is going up, wage costs are going up. The whole situation is just affecting the whole of the supply chain. And as a result of that, there are things happening like the supermarkets are reducing their lines. So, they're reducing the number of lines that they're taking because they want to keep the costs low, they don't want to have very much waste. So, they're doing things like that to reduce their costs and reduce their waste. But, yes, the whole industry is being affected by a whole host of different things at the moment. 

I was at a meeting with some chief execs from other food businesses a couple of weeks ago, and they were saying that the supply chain is one of their major issues as a food business, as well as employment and employment costs. At the moment, those two things are really front and centre of what they're seeing. And so that is affecting what we can get hold of as an organisation that deals with surplus, because the food industry is trying to reduce waste, which is great because that's part of what we're about as well, but that means that we're trying to be quite innovative in what we're doing.

So, we're taking on a new unit that will allow us to process and handle the more difficult foods, so that we can take in more fruit and veg, but then split it down into amounts that our organisations can use, so they're not having a whole tray of one thing; they're having a mixture of different fruits and vegetables. We're looking at whether we can break down catering packs from large sizes into smaller sizes; we're looking at whether we can work with a partner to create meals from fruit and veg that is surplus, so that that's usable by the organisations that we're working with. So, the situation with the supply chains is making us have to do things slightly differently as well, and I think that's the same across the whole food industry.


When you talk about difficult foods, do you mean perishable foods?

It's kind of slang language, I guess; it's me talking about foods that our community food members find more difficult to either handle or to give out to organisations.

So, for example, the catering packs: a smaller number of our community food members are able to use those, because they're cooking meals, whereas organisations that are giving food out—perhaps a pantry, for example—can't handle catering packs, so we're looking at putting in processes so that we can deal with that on their behalf, so to speak.

And then fruit and veg: because we get offered, say, a whole pallet of one type of fruit and veg, that is more difficult to handle than smaller amounts of lots of different fruits and veg, so we're putting in processes to be able to take in a greater number of pallets that we can then break down into usable amounts for different organisations. They don't want—I don't know—100 kg of one type of fruit and veg in one go, for example, and they don't want that week on week; they want a mixture of things to be able to make a meal or give out to people.

Okay. That sounds interesting. Very good. I'd like to thank you all. I could personally continue for a very long time, but we have got to take a short break now before we bring in another set of witnesses, so I'd like to thank you all for coming along, some of you from quite a distance. We will send you a transcript of what you've said, and it's really important that you make sure that we've captured what you've said accurately.

And otherwise, we'll make sure that you get a copy of our report once we've published it. And so, thank you very much indeed for all your interesting ideas. The committee will now take a short break until—if you can come back just before 3 o'clock, we'll start again on the dot at 3 o'clock.

Gohiriwyd y cyfarfod rhwng 14:43 a 14:59.

The meeting adjourned between 14:43 and 14:59.

3. Dyled ac effaith costau byw cynyddol: sesiwn dystiolaeth 3
3. Debt and the impact of the rising cost of living: evidence session 3

Welcome back to the Equality and Social Justice Committee. We're a bilingual organisation, some of us are in the room and some of us are joining the meeting online, and immediate translation is available from Welsh to English. Our third session on debt and the impact on the rising cost of living is with Nicola Field of the Credit Unions of Wales, who's joining us online, and Karen Davies of Purple Shoots, who's joining us in person. So, welcome, both of you.


I wondered if I could just start off by asking you both: how are cost-of-living pressures affecting the communities that you operate in, and which are the most affected by cost-of-living pressures? Shall we start with Nicola, just because I can see Karen in the room? Nicola, if you'd like to just tell us how this is impacting on credit unions.

We're certainly seeing a significant impact. Can everybody hear me okay or is there some feedback?

So, we're still seeing, I think, that the number of applications is not at 2020 levels, so pre-2020 levels. However, this is changing and it is getting better. We are seeing an increase in the number of new applicants, but some of our existing members, who had perhaps applied each year, say for Christmas, have not applied this year. They may have been with us for 15 years, always applied every year, perhaps for a Christmas loan, and this is the first year that we're actually seeing people recognising that they may not be able to afford to repay any lending.

Obviously, when we do the affordability checks, we are seeing a smaller level of affordability for the majority of our clients to repay, due to things like rising costs, such as mortgage, fuel bills and food costs. So, while we are doing our checks, we are definitely seeing a reduction in affordability, and they might not be able to repay. We are seeing a rise in new insolvency solutions, so that would be whether it's a debt management, a bankruptcy, a debt relief order or individual voluntary arrangements. So, we certainly are seeing an increase there, but, to be honest with you, I think the biggest rise was perhaps during and immediately after lockdown. So, COVID had a massive impact on new insolvency solutions, and, certainly, the greatest rise was immediately during and after lockdown.

Another thing that we are definitely seeing, another trend that we are witnessing is a greater amount of missed payments and increasing unaffordability. So, when we are looking at credit files, we're seeing more and more missed payments. Before, we might have seen one or two missed payments, but we're certainly seeing three or four, and that is carrying on, where people are not just missing one or two, but they're missing three, four or five months-worth of payments.

So, during COVID, there was a massive surge in saving, without a shadow of doubt. Saving levels rose, and I know that that was the same for the banks, as well, because I've met with the Bank of England, and they had experienced the same trend across all the banks. However, since the cost-of-living crisis, that has dramatically decreased, so we're seeing a lot less savings coming in from members than we've ever seen before, whether post- or pre-COVID levels. We're certainly seeing a decrease in savings across all different applicants. So, it has been a very challenging time for credit unions, and we certainly are seeing changes in trends as a result of the cost-of-living crisis.

Thank you. So, I'm coming at it from a different standpoint. Purple Shoots, fundamentally, is supporting people who are trying to drag themselves out of poverty by their bootlaces, so we're lending money to people to help them start their own business, and we're also supporting people to get them to that point. I think we've seen a difference in those two groups of people. So, the people who are quite a long way away from moving into self-employment, and not working, those people are the ones that are struggling with rising rent, actually. Probably the biggest issue is the rent that they pay if they are with private landlords, and lots of them are. They are seeing increases in rent, which I suppose are the landlords coping with the increase in the interest rates on mortgages. So, that's their biggest issue.

In terms of our borrowers who are starting businesses, I would agree with Nicola that the biggest impact was probably the lockdowns. What that did was damage their resilience to cope with another crisis, because they had so little support. Because they were small, one-man-band-type businesses, they just didn't get any of the Government support that was out there, so they had to go back on benefits. The big injustice of the benefits system, when people don't have a business bank account, which most of them can't get, is that all of the money that they put to one side for their business, to pay their tax at the end of the year and so on, gets eaten up by the benefits system, so they end up with absolutely nothing. So, I was very cross about that, but there doesn't seem to be anything that we can do. So, that means that they have started from a bad place, but I would say that we haven't seen any increase in business failures yet. A few people may be struggling a bit to repay, but they are managing to. So, I'm a big believer in the little businesses that we support because they do display remarkable resilience. They did in lockdown, and they are doing so again. So, in that sense, that's positive.

The other thing that I have noticed is that the type of client who is coming to us for support has changed a little bit. So, historically, we have always worked with people at the bottom end of the economy, and we still do—so, people who have been unemployed for some time, or who are not working for a health reason or a caring reason. They are the ones who can't raise money to start a business if they want to improve their circumstances. What has been happening that I have noticed is that we're getting people slightly higher up the economic chain coming to us, which means that they can't borrow from traditional lenders either, or that something has happened during the lockdown or after the lockdown to push them into worse circumstances, when they weren't there before. So, that's the slightly more negative trend.

In terms of IVAs and DROs, there are still plenty of people—


So, they are the formal debt-management arrangements, and people are often pushed into those by, I think, predatory companies. The FCA is supposed to be aware of that, but we see a lot of people in those arrangements who probably needn’t be, who could have managed their debt. If you go into one of those, it ruins your credit score. It means that you can’t borrow money. It means that you can’t get credit for a mobile phone—things like that. People get pushed into those when they have only got a few thousand pounds’ worth of debt, which could be managed. So, that’s a big frustration for us, because we can’t help them then either, if they are in those. We mentioned this, the last time we were in this committee, as an issue. The FCA is supposed to be tackling it, but we haven’t seen any evidence that it has. We still see quite a few people in those. So, it’s a mix of positive and negative, really, from our point of view.

Okay. Just to ask both of you, really: you set yourself up, Karen Davies, as an organisation, to help very small businesses take off, which weren't able to get loans from more traditional sources. The credit union is also for people whom the banks don't serve well, often. But both of you, presumably, are having to rethink your model a little bit because some of the people coming to you are coming to you because they can't pay their rent and things like that, which is hardly a—. There's not much economic outcome of that. That's just expenditure. So, how do you envisage your own organisation being resilient to what is an endless list of people who simply don't have enough money coming in to meet their basic needs? Do you want to start, Karen? Then I'll go to Nicola.

That's certainly an issue. People who are coming to us to try and start a business are trying to rise above that. So, we are treading a difficult pathway between thinking, 'Well, if this business works for them in the way that they hope that it will, then that means that they will be able to afford some of these expenses. But if it doesn't work, of course, then we have made things worse, because we've added a debt to what they are already struggling with'. So, we do have to look very carefully at their current financial situation, so it takes a little bit longer, perhaps, to do a loan. 

We are part of the open banking system now, so we can see a lot more detail than we used to be able to see. So, that's helped. And we’ve just got to be very aware of people who are borrowing for the wrong reasons—who say they want it for a business but, actually, they don’t. And that’s really difficult to identify. It is an issue. I get frustrated by people who talk about money management solutions for people who are poor. They can manage money; they just don’t have enough of it, and that’s the issue. So, it doesn’t matter how many money management courses they go on, it doesn’t solve the problem.


They’re the very best money managers. Nicola, what are the challenges for the credit unions? If you’ve got a huge pocket of savings built up over COVID, but they’re gradually being reduced, are you yet down to the level that you had pre COVID of savings? You’re on mute at the moment, sorry.

Sorry about that. So, the savings levels do rise year on year, and it has continued. Obviously, COVID was very different in the sense that there was a significant increase in the level of savings. However, reversely, the loan book went down considerably. So, the loan book from COVID and straight after COVID is certainly not in the pre-COVID levels that we were seeing. That has changed, and perhaps some of it as well is—. I mean, definitely some of that is to do with people tightening their belts and feeling that they’re unable to afford a loan repayment, and they’ve decided to perhaps reduce costs, for instance, Christmas costs. But also, I think, because it’s such a riskier market, perhaps our lending criteria to a certain extent have also tightened, because we are lending now in a much riskier market. Affordability—people don’t have the same affordability, and particularly when your resources are stretched already, it becomes far more difficult then, when your cost of living, your food bill and your electricity bill, the water bill, all these things have increased significantly, and that’s obviously going to impact everybody’s ability to repay.

So, we have definitely seen changes in the market, and the market is much riskier. However, there are a number of schemes where we are working with Welsh Government communities division to try and get to help many more people, but it was perhaps slightly too risky for us. And there’s something called the new loan scheme, and the new loan scheme is lending that's supported by the credit union to new members. So, they are very small loans, usually between the £200 and about £750 mark, and it’s only for new members, members who’ve never been with us before, and it’s usually to help with things like cost of living and to help meet costs. It does take away—. This scheme, with support from the credit union and Welsh Government, helps to take the risk, or some of the risk, away from the credit union, and I have to say it’s a very, very successful scheme. We’re in the second tranche of it at the moment, and it is working. People are able to afford the small repayments, and we’re seeing a very low default rate, when we anticipated we’d see a much higher default rate than is actually coming through. So, schemes like that are working, definitely.

Okay. And that’s as a result of support you get from the Welsh Government or from local authorities or UK Government?

Purely Welsh Government.

Okay. Do you receive any support from either local authorities or UK Government?

We don’t, as Bridgend Lifesavers Credit Union, so I wouldn’t like to, obviously, say about the other credit unions. But it is my belief that they don’t.

Okay. Karen Davies, Purple Shoots—you’re a social enterprise or a—?

A charity, a registered charity. So, we don’t get support from any form of government at all, although we are part of a consortium with Plend, which is a fintech company, and Robert Owen Community Banking in mid Wales, who are going to be administering the zero-interest loan scheme for Fair4All Finance, which is an English quasi-Government body. We're a little bit dubious about whether it's going to work, because if people can't afford a loan from a credit union, or—. The idea is that credit unions will feed customers that they can't help into this scheme if they can't afford a credit union loan, but the difference between an interest-bearing loan and a non-interest-bearing loan is not that great. So, I suspect that it's not going to solve the problem, but we're piloting it for Fair4All Finance—I don't want to be overly negative before we start. We have just started but only with a limited number of clients, and it is interesting that quite a lot of them are being declined because they still fail on affordability; they're trying to borrow money that they've got no hope of repaying. So, I don't know if it's going to work as a solution, but we're testing it out, really.  


Okay. I know that other Members have got lots of questions on all of this, so if I could start by calling Sarah Murphy to put the questions you wanted to ask. 

Thank you very much, Chair, and I have to declare that I am a member of the Bridgend Lifesavers Credit Union. So, to start, how are the communities that you operate in being affected by debt, and what impacts have cost-of-living pressures had on the prevalence and severity of debt, in particular? Nicola, can I come to you first? 

I think our clients are perhaps the most impacted because they've got less disposable income to work with anyway on a normal day to day. Any increase in cost of living is going to significantly impact them far more than perhaps those who have a greater disposal income. And so, we're certainly seeing and listening as well to people telling us how it has impacted them, what the rise has been for individuals, and how worried they are as well. We're certainly hearing the concerns from our clients. 

Absolutely. Would you say that their debt is increasing? Is it pushing them further into it? Are there people who haven't been in debt previously and now they are?  

I think we're seeing two different trends. We're definitely seeing an increase in debt, so when we're looking at credit scores and credit history as part of our processes, we're certainly seeing instead of perhaps one, two or three missed payments, we're seeing four, five or six and the defaults, and we're seeing far more defaults than we've previously seen before. We can't, obviously, say whether that's pre COVID or during COVID or just after, but it's certainly a trend that we're definitely seeing where it's going to the four, five, six default. And typically, you'll get four, five defaults on a file. 

So, we certainly are seeing a different trend and a worsening situation, if you like. 

Yes. Thank you very much. And Karen, can I ask you the same thing, please? 

Yes. I mean, I would say what I was seeing was an increase in the number of people struggling with old debt, but not many people taking on new debt. So, I don't know whether that means that they can't get it, or whether it means that they've decided not to make matters worse, or that there's less available—the Wongas and those, there are fewer of those about. But, yes, definitely an increase in people struggling with the day-to-day payments and getting into difficulty because of that—county court judgments, and that sort of thing. 

Right, okay. Thank you. And then, looking at loans, what impacts have cost-of-living pressures had on the ability of people to pay back loans to you? How much of a challenge is this for your organisation, and how are you responding to it? Karen, if I come to you first this time. 

So, we always did have quite a number of defaults because of the people we're lending to, and we've always taken a very lenient approach. So, we've agreed lots of—. All through the lockdowns, we had lots of repayment holidays, and we've agreed lots of reduced payments from people. And obviously, if people's businesses have failed, there's not a whole lot that we can do about it. So, we try not to pile the pressure on, but we do push, obviously, as best we can to get the money back if we think that they can pay. I don't think we've had a massive increase in the defaults over what we've had historically. The worst time was the lockdowns; that's when we saw it spike. So, anything compared to that seems a little bit better. 

Okay, of course, yes. Thank you very much. And Nicola, what about you in terms of paying back loans and what happens to the credit unions when that happens as well? 


Credit unions are very much part of the community, and support the community. And the last thing that we want to do is to get someone to repay if they really can't afford it, and they're struggling. So, we tend to work very much with that individual; we will reduce payments, we will give payment holidays, we will stop interest if that makes things easier. So, we try a number of methods to try and get someone back on track, and we work with them steadily. We've got a team here who will phone the client, and look at affordability for them, even if it's for a six-month period, just to get that person back on track. So, I think we're in a unique position, being in a credit union, in the sense that we're trying to put the individual first, as well as, obviously, recover the funds, but we are very conscious that that person will not be able to afford it.

Thank you very much. And finally, Karen, when you previously gave evidence to us, during our debt inquiry, you raised concerns about the approach that some public sector organisations take to managing debt. Have you noticed any changes to the way that this is addressed over recent months?

I haven't noticed. I think I have to be honest, I haven't noticed a change either way. So, it certainly hasn't got worse—it may have got better, it might have done. I haven't noticed, really, to be honest.

Okay. That's fine. That's great. Thank you ever so much. Thank you, Chair.

All right. Just to follow up on that, you're still getting reports of really insistent debt collectors, employed by the local authority to pick up on council tax debt—

Yes. And HMRC does it too.

Okay. So, public organisations that employ people who are, conceivably, not within the rules established by the EMA—which is the new enforcement organisation, which is not statutory at the moment, but certainly is endeavouring to ensure that people are keeping to the rules—you're still getting reports of people not keeping to the rules.

Thanks, Chair. A quick question first of all to Nicola. I was just wondering whether there are any examples of best practice by credit unions in responding to the cost-of-living pressures that their members face that could be rolled out more widely across Wales.

Yes. Off the top of my head, I couldn't think of them, but we could certainly put something together that could show what we can do to try and support clients most effectively.

That would be very helpful indeed. Is there anything that you can identify immediately as being potentially scalable across Wales? Any best practice?

For me, perhaps the best project that we were able to produce was this new loan scheme. We were able to offer those in a much riskier market a project to support—. Even if it's a £200 loan for someone to be able to afford their gas and electric, we were able to do it. So, from our perspective, if that's what you mean, perhaps the new loan scheme, in conjunction with and with the support of Welsh Government, was the biggest impact for the clients who have perhaps struggled the most.

Could I just add that Purple Shoots has got a benefits checker on our website, which is an anonymous little sort of widget—I don't know, I'm not very techie—but anyway, people fill it in, and it will tell them how to maximise their benefits. So, we encourage all of our clients to look at that, because it may be that they are entitled to claim something that they aren't claiming, which will help their general levels of income. And I think that there are a few bodies like us who are offering that to their clients, as a way of maximising their income.

And I think that's going well, because we have a number of clients who come in, who are massively struggling financially, and they haven't been able to access that support with the benefits check, and I don't doubt that there is so much more that they could be entitled to. But I think it's knowing where to go as well and, for many people, they either don't have access to online or they're not comfortable, perhaps, in accessing this online information, where to go to access. So, I certainly think that, for many individuals as well, that face-to-face support, where someone can do an assessment and look at whether there's anything else that that person is entitled to, because in many instances, with some of the clients who've come in to see us, you can see that there must be something else that they should be entitled to.


Great. Thank you. When we had evidence from Credit Unions of Wales back in 2021 during the debt inquiry that we held, we heard about a project by Cambrian Savings and Loans to underwrite loans for people who wouldn't normally receive them, to reduce the number of people going to illegal loan providers. Given the cost-of-living challenges that so many people are facing, has this been analysed, and is there any evidence of the benefits of scaling up this particular approach?

So, I think it was a £20,000 pilot scheme that was lent out very, very quickly. When I spoke to Cambrian last, they had a very, very, very small default rate; it was almost non-existent, and they had continued to support those clients with further loans, so further lending. It was a very, very successful project and certainly a successful pilot. I think the loan scheme that we do now with Welsh Government is very similar to that particular project.

Okay, thanks. And a quick final question to Karen: can you give an update on progress with the pilot that you're operating with Robert Owen Community Banking and planning to provide no-interest loans?

Yes. So, that has launched softly. Fair4All Finance seem very anxious not to overpublicise it, because they don't want to open floodgates. So, at the moment, they are—. Plend themselves do personal lending, through their fintech system, and, at the moment, only their rejects are going through the zero-interest as a sort of a test. I mean, it's frustratingly slow, but this is what Fair4All Finance wants. So, until March, it's just people who Plend reject, and then, between March and June, it's people who either we or Robert Owen reject, but neither of us do personal lending, so there won't be many of them. And then, from June, it's supposed to be opened up to credit unions, so that they can pass us people who they can't support.

Well, thank you, Chair. My questioning is on the effectiveness of cost-of-living support. To what extent has the cost-of-living support provided by the Welsh and UK Governments helped people in your communities? How sustainable is this support, and have you lobbied Welsh Ministers as part of the budget process for the new financial year, so that you can increase the support available?

So, with regard to support, credit unions historically have received so much support from Welsh Government. We've received so much support with regard to our financial education project, with regard to our savings schemes in perhaps areas like, for instance, in our prisons savings scheme that we undertake with Welsh Government as well. So, we have historically received an enormous amount of support from Welsh Government, and I certainly think that, without that support as well from all the Ministers—you know, we receive a massive amount of support from the Ministers who raise awareness of the credit union and within our local community—I think without that support, credit unions would certainly not be where we are now, and able to help as many as we can.


So, Purple Shoots has never had any Government support of any description from central or Welsh Government ourselves. But, having said that, we do get some of our clients who have been well prepared for business by Business Wales. So, we partner with that organisation quite a lot; they give good business advice, on business plans and so on. So, people who they refer to us are often ready to start, whereas people who come to us cold sometimes need support to get the business ready to start. So, that's good.

Having said that, Business Wales are very limited in the support they can give to the people at the bottom end of the economy, which I think frustrates them. They can only offer a few hours, which sometimes isn't enough. There used to be a lot more help in the Department for Work and Pensions for people who wanted to move into self-employment. There were organisations that helped them, but that's all gone. So, I've noticed a definite drop-off of people from the DWP coming to us, and some of them are finding their way to Business Wales, but not all. So, I think that's a shame because that might diminish the numbers of people who could find a pathway out of unemployment that way. So, it would be good if that could—. I know that's not Welsh Government's responsibility, that's central Government, but it's a pity that they've stopped that. 

And in terms of support for our people as well, I guess, as I mentioned before, I was frustrated during the lockdowns that the very small businesses were the ones that got left out always, and they're always the ones that are left out as well. Even the Welsh Government support, you had to be value added tax registered, and often you had to employ people or have a premises, and lots of our borrowers are one-man bands, operating in a mobile place, so they just missed out on everything, so that was a pity. I think they're undervalued because of their contribution to the economy. So, that would be good if that changed, too. 

Thank you. Now, how aware are people of the support available, and how easy is it to apply for? Are there any particular barriers that people face in accessing support, and how would you suggest addressing these? Both of you. Yes, thank you.

I think there is certainly a lack of knowledge about where to access support from, and if I could see something, Chair, it would be some more centralised support systems so that people knew where to go. Often, we're trying to signpost people to support, and I certainly think, and I might be incorrect, but I certainly think that if there was a more centralised system where people could access either benefit support, support for new businesses. Likewise, with credit unions, we're certainly increasing how the public see us now, and we're certainly gaining new members, and it is increasing massively for us with the number of new members we're getting through every day. But I certainly think, again, that there needs to be more centralised support and a centralised support system for people to access services.

Could you just elaborate on that? What do you mean by centralised support?

People come in with a wide range of problems to us, and it's very difficult to know where to send people for help, whether it's for rent arrears, access to benefits that they don't think that, perhaps, they can get, personal independence payment, disability living allowance, whether they qualify, all these sorts of things, and even things like free school meals, everything like that. There needs to be where we know where to send people, but also, if they walked into another organisation, they could also know exactly where to send those individuals so that they get the best support and the best service that they could possibly get.

Okay. But you don't work with local authorities who have, obviously, advice hubs, often attached to libraries? You don't refer people there who are in rent arrears and things like that.


We do send people, obviously, to the local council offices or the DWP as a first point of call. But often we found that some of our clients had been frustrated by the services they received, and I think they need some more hand-holding, perhaps.

Okay. I think this really does open up some rather important issues that I just wanted to explore a bit further because people who are in difficulty and who may not be eligible for the sort of loans that you're offering may be pushed into the hands of the very last people they should be going to, who are the vultures who are lending money at absolutely exorbitant rates. What role, if any, can either of your organisations play in ensuring that people don't go to them? If they don't know about you, and there's a loan shark operating in a particular community, where is the defence for that individual?

There isn't one. The secret is for us to try to get better known so that we could help people. Some people do go to Citizens Advice, but there are not as many of them as there used to be. And in terms of barriers, for a lot of people, transport to get to places is difficult, the cost of it. If they need to get to a library, there are not so many locally. IT is an issue—either they haven't got Wi-Fi or they don't know how to do it. There is a lot of great advice out there online, and that's not very accessible to people who are not confident with searching online for help.

Diolch, Cadeirydd. Un o'r syniadau sydd wedi cael ei drafod oherwydd hyn, yr hyn rŷch chi wedi sôn amdano fe, o ran yr anhawster mae pobl yn ei gael i gael popeth dylen nhw fod yn ei gael, yw cael system hollol gydlynus, streamlined, lle mae pobl yn cael eu pasbortio. Os ŷch chi’n gymwys am un peth, mae hynny yn dangos beth yw'ch trothwy chi o ran eich enillion ac yn y blaen, a'ch bod chi wedyn yn cael eich pasbortio i bopeth arall. Ydych chi'n teimlo y byddai hynny o help i'ch cwsmeriaid chi?

Thank you, Chair. One of the ideas that's been discussed because of this, what you've mentioned, in terms of the difficulties people face in getting everything they should, is having a completely co-ordinated, streamlined system, where people can be passported. So, if you're eligible for one thing, that then shows what your threshold is in terms of your earnings and so on, and that you're then passported in terms of everything else. Do you feel that that would assist your clients?

Yes, absolutely, undoubtedly. I think people just need face-to-face support. Again, I totally agree, whilst there is so much information out there online, many of our clients, particularly perhaps many of our older clients, are not comfortable accessing those services or even knowing where to go to access those services. I regularly get phone calls to help fill in forms for PIP or to help someone online. So, it's definitely something that I think would help. Definitely.

Thank you. Okay. We're moving on to the really thorny subject of energy and the rising cost of living. Jane Dodds.

Diolch yn fawr iawn, Cadeirydd. Mae gen i jest un cwestiwn, os yw hynny'n iawn, i'r ddwy ohonoch chi. Allwch chi jest awgrymu sut mae prisiau ynni wedi effeithio ar y bobl rydych chi'n gweithio efo nhw? Ydyn nhw wedi gweld gwahaniaeth, neu ydych chi'ch dwy wedi gweld gwahaniaeth o ran y bobl sy'n dod atoch chi, os gwelwch chi'n dda? Gaf i ofyn i Karen yn gyntaf, os gwelwch chi'n dda? Diolch.

Thank you very much, Chair. I have just one question for both of you, if I may. Could you just tell us how rising energy costs have affected the people that you work with? Have they seen any major difference, or have you seen a major difference in terms of the people approaching you? If I could ask Karen, perhaps, to go first. Thank you.

Yes, there has been an impact, and certainly on the small businesses that we've supported. The ones that are using a lot of energy for various reasons, so—I'm just trying to think. Say, a beauty therapist who's got a premises, something like that, all the costs have gone up, so the profit margins have gone down. And because their client base is also not well off, they're struggling to increase their prices to cover that. They're often based in poor communities; that's their big strength, that it's a business in a poor community and it's creating wealth there, but the problem is that all their client base have less money to spend. So, they're in a bit of a double whammy and that is affecting their profitability. As I say, it hasn't led to more failures yet, and it hasn't led to more defaults from our point of view yet, but it might. There's definitely a lot of people who've had big hikes in their bills, personally and business wise.


Diolch. Cyn gofyn yr un cwestiwn i Nicola, gaf i ofyn i chi, ydy'r busnesau rydych chi'n gweithio efo nhw, ydyn nhw'n gwybod, ydyn nhw'n ymwybodol o'r gefnogaeth sydd ar gael i fusnesau, yn enwedig busnesau bychain?

Thank you. Before I ask Nicola the same question, could I ask you whether the businesses you work with are aware of the support that is available for businesses, particularly small businesses?

For those who interact with us online, yes, because we try to tell them and point them at it. I think a lot of them maybe are looking, so I think they are aware on the whole that there is support for them.

Diolch. Ac wedyn, Nicola, ydych chi'n gallu jest ateb y cwestiwn ynglŷn â sut mae'n effeithio ar y bobl rydych chi'n gweithio efo nhw? Diolch.

Thank you. And then, Nicola, could you respond to that question on the impact that energy costs are having on your clients? Thanks.

I think rising energy costs are certainly having a massive impact on the clients, because it comes with everything else as well. It comes with rising food bills and just the general cost of living. Everything has gone up, whether it's clothes, food or energy, everything has increased. I think it's impacting our clients significantly and we are hearing more and more concern from our clients who are coming in to say, 'My electricity or my gas bill has gone up to this amount, it's surely unaffordable, we can't be making those sort of payments.' They're having to cut other things in their lives to try and meet the bills, because obviously bills are a priority debt, and so they are having to cut other things to make sure that they can meet those payments. Yes, we are absolutely seeing a massive increase.

Diolch, Cadeirydd. Dyna'i gyd wrthyf i. Diolch.

Thank you, Chair. That's all from me. 

Diolch, Cadeirydd. Mae Cyngor ar Bopeth Cymru wedi galw 2023 yn flwyddyn argyfwng dyled. Wrth gwrs, mae nifer o gynlluniau cymorth Llywodraeth y Deyrnas Gyfunol a hefyd Llywodraeth Cymru yn dod i ben, er enghraifft, y gefnogaeth ar gyfer biliau ynni. Rydyn ni newydd drafod hynny. Ydych chi'n teimlo y bydd y problemau ŷch chi'n eu gweld ar hyn o bryd a'r lefel o ddyled a'r lefel o angen ar gyfer cefnogaeth ariannol yn cael eu dwysáu hyd yn oed ymhellach wrth i ni fynd tuag at y gaeaf eleni?

Thank you, Chair. Citizens Advice has called 2023 a debt crisis year. Of course, a number of support schemes available from the UK Government and also from the Welsh Government are coming to an end, for example, the support for energy bills, which we've just discussed. Do you feel that the problems you're seeing currently in relation to the level of debt and the level of need for financial support will be heightened further as we approach the winter this year?

Absolutely, 100 per cent. I think it's only going to get worse, and I think that we're going to see, certainly towards the end of the year, a rise in debt management schemes, whether it's IVAs, debt management plans or bankruptcy orders. I certainly think that we are going to see another rise. So, we saw one during COVID and just after, immediately after, but I certainly think we're going to see a rise where people are starting to miss payments. I spoke earlier about that sort of one, two, three we received before of missed payments; we're now seeing four, five and six. I certainly think that's going to cause a ripple effect where we are going to see a lot of people going more into a debt management plan to try and support themselves. So, I think it's going to get worse.

Diolch. Oes gan Karen sylw ar hynny, ac efallai beth ddylai Llywodraeth Cymru ei wneud am hynny? Un o'r pethau maen nhw wedi dweud yn y gyllideb yw eu bod nhw'n mynd i roi arian mewn i'r gronfa cymorth dewisol—wrth gwrs, mae hynny'n gymorth argyfwng. Allwch chi roi sylw ynglŷn â'r cwestiwn ac efallai pa fath o gymorth ddylai Llywodraeth Cymru fod yn rhoi yn ei le oherwydd hyn?

Thank you. Does Karen have a comment on that, and perhaps what the Welsh Government should be doing in relation to that? One of the things they've said in the budget is that they're going to provide funding for the discretionary assistance fund—of course, that is emergency support. Could you comment on the question relating to what sort of support the Welsh Government should be putting in place because of this?

I don't know if it's going to get worse or not. I think it depends on what happens in the economy. I'm trying not to be too negative, because so far people have survived. The discretionary fund was great, when that came out, and if that could continue or expand to support more people, because it's certainly families that struggled, and a lot of families took advantage of it, that I saw. It wasn't very well known, to start with, but then the Welsh Government did a lot to make it better known, and there was good take-up, from the people I saw. That's something, I suppose, that's within the Welsh Government's power to do, because changing the benefits system or something, you can't do, but if that was increased a bit, or if it was less draconian when people try to do side hustles and earn a bit of extra money, that would be better. I know you can't change that, but something like the discretionary fund would help.


Again, I'm in complete agreement with that. The discretionary fund we signposted a lot of our clients to who wouldn't be able to get a loan, perhaps, with a credit union, or they were only looking for that £50 to £100. We did signpost to the discretionary fund in all those instances. It is definitely a project that I would support.

Diolch. Yn meddwl nawr yn fwy am yr hirdymor, beth ddylai Llywodraeth Cymru ei flaenoriaethu wrth ddatblygu ymateb cynaliadwy i'r heriau sydd wedi dod i'r amlwg o ganlyniad i bwysau costau byw?

Thank you. Thinking now more about the long term, what should the Welsh Government prioritise in developing a sustainable response to the challenges that have emerged as a result of cost-of-living pressures?

I think it's very different for both of us, because the Welsh Government are providing a lot of support for credit unions, and have done historically for many years. I think they have also recognised where the need has been with us. By introducing the new loan scheme, because it's underwritten by the Welsh Government, we're able to provide to a much riskier market, so perhaps loans where they just fail to meet our criteria. We are now able to provide those loans and we've opened up a complete new market for ourselves. But also it supports many more people who perhaps wouldn't have been able to come to the credit union. And once they're in the credit union, on the second or third loan, because they then have a credit history with the credit union, they would be able to have a union loan. I think schemes like that do actually support, long term, new clients who perhaps would fall through the cracks of our lending policy. I certainly think something like that has been a massive support. Also, credit unions have received funding from the Welsh Government for a massive social media marketing campaign across Wales, particularly in light of the increase in fuel costs. 

I'm trying not to get jealous of credit unions. You've had so much support. If we're thinking long-term dreaming, I know that there is a proposal from the Bevan Foundation out there around a Welsh benefits system, because I think a lot of the issues, certainly the difficulties that our clients face, can be traced right back to that door. It's around the way people can't save money. People can't earn little bits of extra money to make things better. I had a client this week, and it was just there in black and white—it made me so cross. He is self-employed, but every month he has to report his earnings, and they take the profit from his business off his benefits—not his drawings, but the profit—so then there's no money to put into the business next month. I was looking at the six months, and in month 5 he had a big insurance bill and he went overdrawn because he didn't have the money, and he would have had if the benefits hadn't taken it away. Those are really stupid things that the benefits system does that could be rectified.

I don't whether central Government is listening, but if the Welsh Government could somehow take over and put those things right, I think it would give people a better chance of saving and working their own way out of the difficulties that they're in. I think that it's the benefits system that holds people back a lot, and there's a fear around it, so that people are frightened. Certainly, if you're on any of the PIPs or the disability benefits, you can earn money, but people are frightened to, because the benefits system will say, 'Oh, you don't look like you're disabled; we'll review' and then they stop the benefits for six to eight weeks whilst they review, and then even if people get the benefits back, they're eight weeks down, they're in debt et cetera, et cetera, and that could all have been avoided. So, I would lay a lot of the issues that we're seeing amongst our clients very firmly at the doorway of the DWP. I don't know what Welsh Government could do about that, but it's something to consider, maybe.


Diolch. Nicola, mi wnaethoch chi sôn am y new loan scheme yma; syniad newydd, rhywbeth sy'n llwyddiannus, mae'n swnio fel. Oes yna unrhyw enghreifftiau eraill o arfer da fel hyn, neu syniadau da gan sefydliadau eraill yng Nghymru, neu tu hwnt, yn rhyngwladol, efallai, y byddech chi'n hoffi gweld yn cael eu cefnogi yma, ac yn cael eu rowlio allan yma yng Nghymru, efallai gyda chefnogaeth Llywodraeth Cymru?

Thank you. Nicola, you mentioned this new loan scheme; it's a new idea, it's successful. Are there any other examples of good practice, or good ideas by other organisations in Wales, or beyond, or internationally, that you would like see supported and rolled out here in Wales, perhaps with the support of the Welsh Government?

I think for credit unions—and I know I would speak for all credit unions in this—it's to raise awareness of the credit union movement and the work that we do, such as taking receipt of benefits payments for those individuals who don't have a bank account. We're seeing far more individuals now than ever before that don't have bank accounts, and that's actually exacerbated by the Post Office no longer receiving benefit payments. So, I certainly think raising the awareness of credit unions. We don't just deal in loans and savings; there's certainly a lot more that we do and I would certainly like to raise awareness of the services we provide.

I'd say a couple of things. In America, there are quite a lot of organisations like Purple Shoots that are much bigger and much stronger because of legislation there that makes the profitable US financial institutions contribute to the community finance institutions. That obviously doesn't cost the Government anything and it just comes from a small proportion of their profits. I don't know exactly how it works; it's called the reinvestment Act. I know there's a proposal—again, it's central Government—around the idea of putting the profit to support the community.

The other good thing that I've seen, going back to the other group of people that we work with through our little groups, where we move people towards self-employment or community engagement—. That's a much bigger movement in the third world, partly because there isn't a benefit system there, so there's no restriction on them testing out ideas and earning a bit of extra money. The problem that our groups come across often is if they want to try out an idea—. Say it's a group of people with disabilities, and they're not sure if they can make something work because of their disabilities, but they want to try, it could really damage their benefits income if they do it, and so it puts them off, and it prevents them moving forward. So, that's something that ought to change so that people can try things out and maybe then find an opening that will actually deliver them more money and a better income.

But it seems like the benefits system—. I understand why they do it, because they don't want it to be taken advantage of, but it prevents entrepreneurialism instead of encouraging it, and that is often the ticket for people out of difficult financial circumstances. But that's not very helpful, because both of those are central Government things. 

I would also say, obviously, the new loan scheme that has been touched upon, where the Cambrian Credit Union tested it with a pilot scheme, and then it's been adopted by the Welsh Government in a slightly different but similar scheme. I would say that is also hugely successful and provides support to so many individuals that wouldn't be accessing our support otherwise.

Thank you. That's very useful information. Did you have any other questions, Sioned? No. Thank you. Just before you go, Nicola, I just wanted to ask you the same question that I asked Karen earlier, which is around where the civil enforcement industry is being employed by public bodies to recover debts, and they're doing it in a way that is extremely unhelpful to the person who is struggling to pay their bills. I just wondered if you have any experience of this as well, particularly since the Enforcement Conduct Board was launched in November here, which is endeavouring to ensure that people are playing by the rules. Is there anything you can say about this?


I know who Karen's referring to. I absolutely know the company that's been referred to, and I have heard reports myself. In fact, I have instances where we've paid off the debt to ensure that that person isn't getting harassed. So, there have been instances where we've paid off the debts to stop any harassment by the enforcement company. I think there's only so many enforcement companies operating in Wales at the moment, and I have heard stories of one or two of them where slightly more harassing and forceful techniques are used. Obviously, we've never used an enforcement company, so I have no first-hand experience of them, because we tend to just speak to the clients ourselves. We've got our own department that speaks to individuals ourselves, because, obviously, our clients, if they can't afford to pay—. We have a very loyal clientele and very loyal customers, so if they can't afford to pay us, there is a reason, normally, for it. So, yes, I have heard the reports. We have been known to pay off some debts previously, but, as for first-hand knowledge, we don't use third-party enforcement agencies.

Thank you very much. Thank you very much to both of you for your evidence. Obviously, some of the ground we've covered relates to the Welsh Government's relationship with the UK Government and how we could have a more agile benefits system to encourage more entrepreneurialism. It's obviously something that we need to work on collectively, because otherwise people will always be trapped in poverty. Thank you very much. We'll send you both a transcript of your evidence; please make sure that it's accurate in capturing what you have told us and that we haven't misheard something. Thank you very much for your time and for all your work.

4. Papurau i’w nodi
4. Papers to note

We now have some papers to note, two bits of correspondence. Can we agree to note these two?

5. Cynnig o dan Reolau Sefydlog 17.42(vi) ac (ix) i wahardd y cyhoedd o weddill y cyfarfod
5. Motion under Standing Order 17.42(vi) and (ix) to exclude the public from the remainder of the meeting


bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi) a (ix).


that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi) and (ix).

Cynigiwyd y cynnig.

Motion moved.

Could we agree under Standing Order 17.42 to exclude the public for the remainder of the meeting?

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 15:58.

Motion agreed.

The public part of the meeting ended at 15:58.