‘Local welfare’ schemes in England on brink of collapse, says report

The system of “local welfare” schemes set up less than five years ago to provide emergency help to England’s poorest families, often to help them cope with delays and sanctions to their benefits, is on the verge of collapse, say poverty campaigners.

A survey of more than 150 council-run schemes by Church Action on Poverty found that nearly 25% had been shut since 2013, while a further quarter have reduced spending by 85% .

More are expected to close in the next few months.

The demise of local welfare would put tens of thousands of vulnerable people at increased risk of hunger, debt and destitution, the charity said.

The system was designed to help people on low incomes deal with unexpected hardship, such as a lack of money caused by benefit payment problems, or domestic crises such broken boilers, house fires and flooding.

Huge cuts to council budgets have left the system, which replaced the old social fund, struggling to survive.

Provision is so uneven that thousands of people cannot access emergency help from the state, Church Action on Poverty said.

“Local authority welfare schemes are increasingly threadbare, leaving families in many areas with nowhere to turn for help,” said the bishop of Manchester, David Walker. “It cannot be right for central and local government to abdicate responsibility for people in crisis when they need our help most.”

In many areas the most common reason for an application for crisis support is delays or sanctions to benefits, with some councils noting that the fiveweek minimum wait for a first universal credit payment is an emerging factor in rising demand.

Universal credit claimants facing hardship who contact Department for Work and Pensions (DWP) helplines for help are routinely directed to local welfare schemes in their areas if they do not qualify for official advance loans or hardship funds.

Church leaders and anti-poverty charities called on ministers to make local welfare provision a legal duty for top-tier councils, and to provide ring-fenced funding to protect crisis services.

The 153 councils that responded to the survey collectively reduced spending on local welfare by an average 72% between 201314 and 2017-18.

Together they spent £46mn on local welfare last year, compared with a national budget of £172mn in 2013-14.

Local welfare provision replaced the discretionary social fund, which in its final year spent £240mn in crisis loans and community care grants.

It was devolved to councils with DWP funding in 2013 but that cash was stopped in 2015, with councils left to decide whether to keep the schemes going.

Huge budget pressures faced by councils mean even authorities that have protected local welfare in the past are proposing drastic cuts.

West Sussex county council recently unveiled plans for an 80% reduction in its £800,000 crisis fund from next April.

Local welfare has been controversial as most councils refuse to give cash payments to clients in crisis, choosing instead to offer supermarket food vouchers or refer them to food banks.

In one case, Isle of Wight council offered a 62-year-old homeless woman a voucher to buy a tent.

Only two English councils – Islington in north London and North Tyneside in the northeast – had higher local welfare budget cash totals year compared with 2013, by 12% and 4% respectively.

Niall Cooper, the director of Church Action on Poverty, said: “The purpose of the social fund was that people could stay afloat and hopefully ride out a crisis, rather than sinking deeper into poverty.

“A lifeline in times of emergency is a vital part of a compassionate society, but it has been withdrawn in many places and neglected almost everywhere.”

A government spokesperson said: “One million people have been lifted out of absolute poverty since 2010 and household incomes have never been higher.

“For families that need extra support, we’re spending £90bn a year on working-age benefits.

“Local authorities are responsible for using their funds to best meet the needs of their residents, and over the next two years we are providing them with £90.7bn to do so.”