Cymorth welcomes £21m increase for the Housing Support Grant but calls for a change in approach to deliver Real Living Wage funding for social care workers.
The Cabinet Secretary for Finance, Mark Drakeford MS, has today published the Welsh Government’s Draft Budget for 2025/26. The budget documents can be found on the Welsh Government’s website.
Key headlines for Cymorth Cymru members include:
- Housing Support Grant: Last year’s £13m uplift has been baselined, and a further increase of £21 million has been awarded for 2025/26, which means the Housing Support Grant should total £203m next year – see notes below.
- Social Care Real Living Wage: The Welsh Government has re-stated its support for the Real Living Wage for social care workers, however we understand the funding for this will remain un-hypothecated within the local government Revenue Support Grant.
- Social Housing Grants: The capital funding for the Social Housing Grant and Transitional Accommodation Capital Programmes has been increased by £81m.
- VAWDASV: Revenue funding has been increased by £1.2m to support the delivery of the VAWDASV Strategy, and capital funding appears to have been increased by £900k.
This follows months of work to collect evidence and make the case for increased funding for homelessness, housing support and social care services in Wales.
Reacting to the increase in the Housing Support Grant, Cymorth Cymru Director Katie Dalton said:
“We are extremely pleased the Welsh Government has responded to our evidence about the significant pressures facing the homelessness sector, and has increased the Housing Support Grant by £21m for 2025/26.
“The commitment to a funding increase at this stage in the budget process is very welcome, and will enable local authorities and support providers to plan for next year. However, any further increases to bolster homelessness services in the final budget would be warmly received.
“We are very clear that the £21m needs to build on last year’s efforts to improve frontline worker pay, and should be utilised to further increase the wages of people who do extraordinarily complex, challenging and critical work to support people experiencing or at risk of homelessness.
“It is also essential that the UK Government provides additional funding to ensure homelessness services do not collapse from the increase in employer NI contributions. Otherwise, the positive steps taken by the Welsh Government to increase the HSG budget will be consumed by these costs.”
On social care funding, Katie Dalton, Director of Cymorth Cymru said:
“While we welcome the Welsh Government’s continued support for the Real Living Wage for social care workers, we have grave concerns about its implementation. Care providers across Wales have experienced significant funding shortfalls in relation to this policy during the current financial year, which have not yet been resolved.
“It is imperative that the Welsh Government ensures that funding for the 5% increase in the RLW is clearly identifiable and ring-fenced, with the mechanisms in place to ensure that social care providers have confirmation of this funding before April 1st. It would be unacceptable to see a repeat of this year, which is putting vital social care services as risk.
“It is also crucial that additional funding is secured from the UK Government to cover the increase in National Insurance costs facing commissioned social care services. These services are absolutely critical to the delivery of NHS and local government responsibilities, and must be supported financially.”
Notes
Homelessness Support and Prevention
The Housing Support Grant sits within the ‘Homelessness Support Prevention’ budget line. While this overall budget line has reduced by is £320k less than last year, we have been assured that the Housing Support Grant has been increased by £21 million. The reduction in the wider budget line is due to funding for £21.32m that goes to LAs for TA, Discretionary homelessness prevention and strategic co-ordinators being transferred into the local authority Revenue Support Grant.
Social Care Real Living Wage commitment:
Paragraph 20 in the Draft Budget Narrative document states:
20. We continue to prioritise funding for social care alongside funding for the NHS – the two must be supported together. Social care is being directly supported by local authorities. In 2025-26, the revenue support grant (RSG) will be increased by £235m to reflect the additional pressures being experienced by local authorities. We welcome the announcement by the UK Government to increase the National Living Wage to £12.21 an hour and we continue to support the payment of the Real Living Wage for care workers at £12.61 an hour.
Social Housing Grant and Transitional Accommodation Capital Programme:
Paragraph 49 in the Draft Budget Narrative document states:
49. We are investing £81m of general capital funding for the Social Housing Grant and Transitional Accommodation Capital Programmes which will deliver more homes for social rent supporting our work to end homelessness and ensure everyone in Wales 24 has a decent, secure place to call home. In addition, a further £26.25m of FT Capital has been made available to continue to support loans to Registered Social Landlords (RSL).
Violence Against Women, Domestic Abuse and Sexual Violence
Paragraph 71 in the Draft Budget Narrative document states:
71. £1.2m of additional funding is being invested to support the delivery of the Violence
against Women and Domestic Abuse and Sexual Violence Strategy to provide victims
with support and advice across all areas of Wales through regional grant funding.
