Charities & councils warn government over welfare scheme cuts

Charities and councils have warned that the Government’s decision not to protect funding for local welfare assistance schemes will make life harder for poor people facing financial crisis.

Local government minister Kris Hopkins (pictured) confirmed that there would be no central government money for the schemes in 2015/16 and announced he would not impose a “ring-fence” to require councils in England to set a fixed amount of their budgets aside for the grants.

Since replacing the Social Fund in 2013, the council-run schemes – which help people in critical need to cover major one-off expenses, like repairing a broken cooker or setting up home after leaving care or escaping domestic violence – had been funded by the Department of Work and Pensions to the tune of £170 million a year.

However, that funding is being withdrawn from April next year.

Announcing a 1.8% cut in councils’ overall spending power for 2015/16, Mr Hopkins said that local authorities would continue to be able to offer LWA grants from within their own existing budgets “if they judge it a priority in their area”.

The minister said he had identified a total of £129.6 million relating to local welfare provision within councils’ general grants, but that it should be for individual councils to decide for themselves how best to spend it.

“The Government has always been clear councils should choose how best to support local welfare needs – because what is right for Croydon will not be for Cumbria,” said Mr Hopkins.

“Therefore this allocation will not be ring-fenced and we will not be placing any new duties, expectations or monitoring requirements on its use.”

Local Government Association chairman David Sparks branded the decision “hugely disappointing”.

“Instead of providing separate money for councils to help the vulnerable, government has instead suggested that councils will have to find this money from existing budgets, at a time when these are being cut by more than £2.5 billion,” said Mr Sparks.

“This would be robbing Peter to pay Paul, and would effectively amount to an additional £130 million cut for other vital services like fixing the roads, collecting the bins and caring for the elderly.”

The Child Poverty Action Group said that a recent survey had found 73% of councils would axe or cut back their LWA schemes if central funding was removed.

The only way to ensure the grants were available was to provide “specific budgets that cannot be used by councils for anything else”, said CPAG chief executive Alison Garnham.

“In the long-run tax payers will foot a higher bill if low-income families can’t stop a one-off, unforeseen expense from becoming a full-blown crisis and the human cost will be high,” said Ms Garnham. “For mothers leaving violent partners or youngsters moving on from homelessness or care, the schemes can make the difference between managing or not.

“A critical piece of the social security system is at risk. Low incomes do not allow families to build up savings so it is very difficult to understand how families who are under exceptional pressure would cope with one-off or unexpected costs without these schemes. Local welfare is the final back stop for families with nowhere else to turn – what a miserable message to send at Christmas.”

Anne Longfield, chief executive of family charity 4Children, said the decision would “make life harder for those already struggling to cope”.

“We already know many families are borrowing to cover the basics – food, childcare, heating – and with 2.4 million children in families already stuck in a debt trap and almost 3 million more on the edge of one, we are seeing significant economic problems being stored up for the future,” she said.

“Cutting this sort of support is a false economy – short-sighted and self-defeating. If we can prevent crisis, or help families get back on their feet as soon as possible, it is not only better for families, but for our wider economy too.”

Matthew Reed, the chief executive of the Children’s Society said that the requirement on town halls to fund schemes from within existing budgets could create a “postcode lottery” for families in poverty.

“It is crucial that councils now keep in place local schemes and ensure they are easy to access, open to all families who face an emergency and are effectively advertised so those who need them know about them,” he said.

Youth homelessness charity Centrepoint said councils would struggle to maintain a “much-needed safety net” often used by homeless 16-to-25-year-olds trying to set themselves up in independent accommodation, many of whom do not have basic necessities like a bed, cooker or fridge.

Head of public affairs Paul Noblet said: “In failing to ring-fence funding to protect those in crisis, the Government has made a young person’s journey from homelessness to independence even harder.

“It’s completely unacceptable that young people who have fought to turn their lives around after facing homelessness are once again left to sleep on floors for lack of something as basic as a bed.”

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