Do Welsh Conservative plans for a winter fuel payment scheme add up?

Christopher Harries

Earlier this week, the Conservatives in Cardiff Bay called for the Welsh government to establish an equivalent winter fuel payment scheme.

Depending on perspectives this announcement could be perceived as benevolence to the vulnerable in society, rank political opportunism or a blend of the two.

This article does not focus on the motivations but on the practicalities and implications of such a policy.

One immediate consideration is the devolution settlement, which would be stretched to its limits if not broken by such a policy. Does Darren Millar have the necessary political capital to advance a policy that could be perceived as expanding devolution, whilst lacking a mandate from his increasingly devosceptic membership?

Rhetoric

Ignoring concerns over political capital, such a policy seemingly flies in the face of rhetoric from the Conservative Party in both Westminster and Cardiff Bay.

Welsh Government ministers’ response to a similar call for a Welsh equivalent winter fuel payment scheme indicated that this was outside of devolved competencies.

While Millar has criticised the proposed expansion of the Senedd, such a policy would surely give credence to the argument for additional representatives. Additional powers and their relevant delivery would surely require additional scrutiny, thus undermining arguments against an increase in the number of representatives.

How can the Welsh Conservatives reconcile a policy announcement that appears to be a veiled suggestion of additional powers with rhetoric that states the opposite? Is this a Welsh iteration of a sin that plagued the last Conservative government, namely words, not actions? Rhetoric that falls short of the action taken or action that seems contradictory to the rhetoric.

In terms of economic considerations, such a policy would surely pose a financial strain on the Welsh Government’s budget, giving rise to questions about affordability. This year, the Welsh government’s pilot of Universal Basic Income will come to an end due to cost. To reference the pilot is to highlight the very real economic constraints, the UBI pilot involved paying monthly payments of £1,600 each to a group of 635 care leavers.

In comparison, in the fiscal year 2023/2024 over 600,000 pensioners in Wales received the winter fuel payment. If Millar intends to provide similar support, how could meeting this liability be viable if the Welsh Government cannot sustain a pilot with only 635 recipients? Millar suggested that the scheme would cost £100 million – the estimated cost for provision in Wales in the year 2023/24 was between £267 million and £287 million (see below). This poses the question; how exactly would the scheme be funded? And why are Millar’s figures so wildly different?

Funding

Aside from the specific costs to be paid to eligible pensioners, how do the Welsh Conservatives intend to fund the necessary administration for such a scheme such as staff to determine eligibility, administer payments and the like?

Given, that the supposed funding for this policy comes from the proposed slashing of the Welsh Government’s administration budget, this seems to ignore the reality that such a policy will consequently require administrative staff and so will replace one set of administration costs with another.

For eligibility, due to few supporting details, the working assumption is that the policy is intended as a Welsh equivalent of the winter fuel payment scheme cut by Rachel Reeves. If this is the case it raises concerns about originality and betrays a tendency to copy policy from Westminster. One obvious flaw of the now cut winter fuel payments scheme was universal eligibility which saw payments made to pensioners irrespective of circumstance and means. Surely if the aim is to support the most vulnerable in society then universal eligibility diverts resources away from those who truly need it?

In light of the above, it appears that the policy suggestion falls short of even the most basic scrutiny for costs and should be treated as little more than an attempt to garner press coverage.

Devoid of detail and the necessary rigour, the policy belies the notion that the Welsh Conservatives have a meaningful plan for Wales.

Historic cost calculation

To estimate the cost of the Winter Fuel Payment scheme in Wales for the 2023/2024 winter, we have combined the number of recipients with the payment amounts they received, accounting for the standard Winter Fuel Payment plus the additional £300 Pensioner Cost of Living Payment provided that year.

Since exact recipient breakdowns by age and living situation in Wales are not publicly detailed for 2023/2024, available data and reasonable assumptions have been used to reach an estimate.

Key Data Points:

1. Number of Recipients: According to GOV.UK (November 28, 2023), over 600,000 pensioners in Wales received the Winter Fuel Payment in 2023/2024.

This figure likely refers to individuals rather than households, as the payment is often reported in terms of people reached, though it’s paid per household. For precision, let’s assume this is 600,000 individuals, which we’ll adjust to households later.

2. Payment Amounts: –

• Age 66–79, living alone: £500 (£200 + £300).
• Age 80+, living alone: £600 (£300 + £300).
• Shared household (per person): £250 (age 66–79) or £300 (age 80+).
• Care home residents: £250 (age 66–79) or £300 (age 80+).

3. Household Adjustment: The payment is per household, so if 600,000 is individuals, we have sought to estimate households. In the UK, about 70–75% of pensioner households are single-person, with the rest being couples or shared (based on general ONS pensioner household data). Assuming a similar split in Wales, and an average of 1.2–1.3 individuals per eligible household (accounting for couples), 600,000 individuals might equate to roughly 460,000–500,000 households.

Assumptions for Estimation:

Age Split: Approximately 20–25% of pensioners are over 80, based on UK demographics (ONS data shows about 1.6 million of 12 million UK pensioners were 80+ in recent years). Let’s assume 25% in Wales for simplicity: 150,000 of 600,000 individuals are 80+.

Living Situation: Around 70% live alone (420,000 individuals), 25% share households (150,000 individuals, or 75,000 households assuming couples), and 5% are in care homes (30,000 individuals).

Payments are assigned per household, so we will calculate based on households then scale to individuals where needed.

Step-by-Step Calculation:

1. Households Estimate:

Total individuals: 600,000.

Single-person households (70%): 420,000 households.

Shared households (25%): 75,000 households (150,000 ÷ 2).

Care homes (5%): 30,000 individuals (treated as individual payments).

Total households ≈ 495,000 (420,000 + 75,000), plus 30,000 care home residents.

2. Cost Breakdown:

Single-person households (420,000)

75% under 80 (315,000) × £500 = £157.5 million. – 25% over 80 (105,000) × £600 = £63 million. – Subtotal: £220.5 million.

Shared households (75,000 households): – Each gets £500 (under 80) or £600 (over 80), split per person as £250 or £300. – Assume 75% under 80 (56,250 households) × £500 = £28.125 million. – 25% over 80 (18,750 households) × £600 = £11.25 million. – Subtotal: £39.375 million. – Care homes (30,000): – 75% under 80 (22,500) × £250 = £5.625 million. – 25% over 80 (7,500) × £300 = £2.25 million. – Subtotal: £7.875 million.

3. Total Estimated Cost:

Single-person: £220.5 million.

Shared: £39.375 million.

Care homes: £7.875 million.

Grand total: £220.5M + £39.375M + £7.875M = £267.75 million.

Refinement: If “over 600,000 pensioners” implies, say, 620,000 individuals (≈500,000 households), the cost scales proportionally. Using 620,000: – Adjust households to ~515,000 (434,000 single, 77,500 shared, 31,000 care). – Recalculate: £228.9M (single) + £40.6875M (shared) + £8.175M (care) = £277.7625 million.

Final Estimate: The estimated cost of the Winter Fuel Payment scheme in Wales for 2023/2024, including the £300 cost-of-living addition, is likely between £267 million and £278 million, with a midpoint of around £272 million. This aligns with the scale of 600,000+ recipients and the boosted payment structure.

Exact costs would require DWP data on recipient categories, but this calculation provides a reasonable ballpark based on available information.