Audit Wales warns incoming government will face major housing challenges as concerns raised ahead of Senedd election

WALES is unlikely to meet its flagship affordable housing target despite significant progress, auditors have warned in a new update published this week.

Audit Wales said the Welsh Government and housing sector had improved delivery and transparency since concerns were first raised in 2024. However, the latest projections suggest the commitment to deliver 20,000 affordable homes during the current Senedd term will still fall short.

The warning comes just months before the Senedd election in May, with housing expected to be a major political battleground across Wales.

The Welsh Government originally pledged to build 20,000 new low-carbon social homes for rent between 2021 and 2026. But rising construction costs, economic pressures and delivery challenges have slowed progress.

Auditors previously estimated that without significant additional investment, only between around 15,800 and 16,700 homes could be completed by the deadline — well below the target. Affordable housing – Eng

While the follow-up review found “significant progress” across the sector and improvements in how the Welsh Government reports performance, it also highlighted ongoing risks and funding pressures.

The report said the next Welsh Government — regardless of which party forms it after the election — will inherit a range of unresolved challenges, including funding gaps, planning constraints and the need for a longer-term housing strategy.

Housing shortages remain a major issue across Wales, with growing numbers of households in temporary accommodation and rising demand for affordable homes.

The Welsh Government has previously argued that global inflation, supply chain disruption and higher interest rates have pushed up construction costs beyond original forecasts, while opposition parties have criticised delivery rates.

Auditors acknowledged that many of the pressures affecting housing delivery were outside the Welsh Government’s direct control, including the economic aftermath of the pandemic and the impact of the war in Ukraine on construction costs.

However, they also warned that difficult decisions remain about funding priorities and delivery models if ministers are to get closer to the target before 2026.

The update also highlighted broader issues facing the housing system, including shortages of planning capacity, environmental regulations affecting development sites and uncertainty over long-term investment beyond the current programme.

Housing is expected to feature prominently in the Senedd election campaign, with parties already outlining competing proposals on social housing supply, planning reform and support for renters.

Welsh wild wine producer to represent West Wales at London celebration

A LLANDOVERY-based wild wine producer will bring a taste of the Welsh countryside to the heart of London as part of a major St David’s Day food showcase at the iconic Spitalfields Market.

Mydflower, known for its naturally crafted lightly sparkling wines, will take part in the consumer event over the St David’s Day weekend on Saturday (Feb 28) and Sunday (Mar 1). The showcase will feature more than a dozen Welsh food and drink producers and aims to highlight Wales’ growing reputation as a modern food nation producing world-class products.

The company’s distinctive wines are made using spring water from the Brecon Beacons alongside locally sourced botanicals and berries. The brand focuses on rediscovering centuries-old recipes inspired by the wild landscapes of Wales, producing natural raspberry and elderflower wines with a fresh, lightly sparkling finish.

David Ruttle, co-founder of Mydflower, said: “St David’s Day is a brilliant opportunity to celebrate Welsh culture in the heart of London, and we’re proud to be part of it with Mydflower. Our wild wines are made using pure Welsh spring water from the Brecon Beacons, traditionally foraged fruits and flowers, and Champagne yeast, creating something lighter, fresher, and naturally sparkling.

“Events like this are a chance to share our story, introduce more people to a new kind of premium Welsh drink, and bring a taste of the wild Welsh landscape to a wider audience.”

Spitalfields Market — one of London’s most historic trading destinations — has built a strong reputation for showcasing high-quality produce, making it an ideal venue to promote Welsh food and drink to new audiences. Visitors over the weekend will be invited to explore a range of products reflecting the quality, character and ambition of contemporary Wales, from heritage-inspired favourites to innovative modern brands.

Celebrating St David’s Day through food

The event forms part of a wider St David’s Day programme organised by Food & Drink Wales, the Welsh Government’s food division, which supports the sector while also using food and drink as a way to express national identity, creativity and pride.

Deputy First Minister with responsibility for Climate Change and Rural Affairs, Huw Irranca-Davies MS, said: “St David’s Day is the perfect moment to celebrate the exceptional quality and creativity of Welsh food and drink producers. From award-winning charcuterie to innovative craft spirits, the businesses showcasing at Spitalfields represent the very best of what Wales has to offer.

“Our food and drink sector is built on strong foundations — protected geographical status, sustainable farming practices and generations of skilled production. But it is also a sector that continues to evolve, with producers combining their heritage with fresh ideas and ambitious growth plans.

“Events like this are vital for connecting Welsh businesses with new markets and demonstrating to buyers across the UK that Wales is a modern food nation with products that can compete at the highest level.”

MS highlights concerns from local firms as Wales employment figures lag behind UK

BUSINESSES in Pembrokeshire are feeling increasingly squeezed by rising costs and a challenging economic climate, according to feedback gathered at recent engagement events alongside the latest labour market statistics for Wales.

New figures show employment in Wales has risen slightly to 71.8%, but remains the lowest rate in the UK, where employment stands at around 75%. Economic inactivity has also increased from 24.5% to 24.8%, the highest level in Great Britain, while UK unemployment has reached a near five-year high amid slowing wage growth.

Commenting on both the statistics and the experiences shared by business owners across the county, Samuel Kurtz MS, Welsh Conservative Shadow Cabinet Secretary for Economy and Energy, said many local firms were struggling under the combined pressure of higher taxes and operating costs.

“Behind these statistics are real businesses and real livelihoods here in Pembrokeshire,” he said. “Whether it was at the recent Pembrokeshire business rates online forum or the follow-up business surgery, I heard first-hand from entrepreneurs who feel squeezed, not supported by the status quo.”

He added: “When Wales has the lowest employment rate in the UK and the highest economic inactivity, while businesses here in Pembrokeshire say they are being squeezed from every direction, that should be a wake-up call to both governments.”

At the events, business owners from sectors including tourism, hospitality, retail and manufacturing raised concerns about rising business rates, energy bills and the cumulative impact of tax changes from both Cardiff and Westminster. Many reported scaling back plans to hire, invest or expand because of financial pressures, with some facing decisions about whether they could continue operating.

Examples shared included a tourism operator reporting holiday booking cancellations and staffing challenges as households tighten spending, a café owner in the county town considering shorter opening hours after sharp increases in energy and staffing costs, and a manufacturing firm warning that competitiveness was being undermined by high rates and regulatory burdens.

“Labour and Plaid Cymru are failing to get a grip on the economy in Wales,” Mr Kurtz said. “Their stitch-up budget in Cardiff Bay, alongside tax rises from Westminster, have piled pressure onto employers who are already battling higher costs just to stay afloat.”

Despite the challenges, economists point out that Wales’ labour market trends are influenced by a range of factors beyond government policy alone, including long-term health conditions, demographic changes and the rural nature of much of the Welsh economy, all of which contribute to higher levels of economic inactivity compared with other parts of the UK.

A Welsh Government spokesperson said supporting businesses and jobs remained a priority, highlighting measures such as business rates relief, economic development funding and targeted support programmes.

They said: “Businesses across Wales, like those elsewhere in the UK, are facing pressures from global economic conditions, inflation and higher borrowing costs. We continue to provide significant support to help firms grow, create jobs and invest in their communities.”

Mr Kurtz said the Welsh Conservatives were proposing an alternative approach to support job creation and restore business confidence.

“We are putting forward a bold, fully costed tax-cutting agenda to kickstart the economy, including abolishing stamp duty and cutting business rates, to undo Labour and Plaid’s economic damage and get Wales working again,” he said.

“Pembrokeshire has enormous potential, from our energy sector to tourism and food production, but businesses need a government that backs enterprise rather than burdens it. I will continue to stand up for local employers who feel ignored and squeezed by rising costs.”