Tagged: welfare assistance

Cuts To Local Welfare Schemes ‘A Christmas Present To Loan Sharks’

This articlewas written by Patrick Butler, social policy editor, for The Guardian on Thursday 18th December 2014

Poverty charities and councils have warned that the government’s refusal to guarantee funding for local welfare schemes will force low income families in crisis to turn to food banks and loan sharks.

The government announced in January that it would no longer provide £180m central funding for local welfare assistance schemes operated by English local authorities after April 2015, triggering a cross-party revolt by Conservative MPs and council leaders, Labour councils and charities.

It is believed that the communities secretary, Eric Pickles, attempted to secure £70m for local welfare to announce in Thursday’s local government finance settlement, but was blocked by the chancellor, George Osborne.

The local government minister Kris Hopkins told the Commons on Thursday that there would be no additional funding for local welfare, although he encouraged councils to make further formal representations, raising faint hopes that the government may revisit the decision in February.

Local welfare provision offers emergency help for a range of vulnerable people who fall into unexpected crisis, including women fleeing domestic violence, homeless people, pregnant mothers, care leavers, pensioners and people suffering from chronic physical and mental health problems.

Some in Whitehall are understood to be concerned that cutting local welfare will provide additional fuel to critics who argue the government does not care about poverty. A cross-party report on food banks this month urged the government to protect local welfare assistance, saying food bank referrals would increase if it was not reinstated.

Hopkins said that although there would be no new funds for local welfare, ministers would outline a notional figure of £130m in the overall grant allocations to councils – a cut of £50m – although this would not be ring-fenced, meaning councils can spend it on other services.

Cllr Andy Hull, Labour-run Islington council’s executive member for finance, called the decision not to provide local welfare funding “an early Christmas present from the government for loan sharks and payday lenders.”

He added: “This safety net supports families to stay together, helps people sustain their tenancies and keeps kids out of care. It is a lifeline, not a luxury. Now, thanks to the government, it lies in shreds.”

The Local Government Association said almost three-quarters of local authorities will abandon or scale back local welfare schemes unless they receive government funding. Two county councils, Nottinghamshire and Oxfordshire, have already closed their schemes.

Alison Garnham, chief executive of Child Poverty Action Group, said:

“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. For mothers leaving violent partners or youngsters moving on from homelessness or care, the schemes can make the difference between managing or not.”

Helen Middleton of the Furniture Reuse Network, whose member charities work closely with councils on helping low-income families, said the decision showed the government had “no real understanding of the levels of poverty in this country”.

Homelessness charity Centrepoint said young homeless people used local welfare schemes as a vital safety net:

“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.

“Ministers must look carefully at responses from councils to this announcement and consider whether their proposal really reflects the level of poverty in many of our communities.”

Matthew Reed, chief executive of the Children’s Society, said:

“The government’s decision to reduce annual funding from £172m to £130m will make it harder for councils to support vulnerable families facing a crisis. The requirement that town halls fund their schemes from within existing budgets may create a postcode lottery for many families in poverty.”

Source –  Welfare Weekly,  18 Dec 2014

http://www.welfareweekly.com/cuts-local-welfare-schemes-christmas-present-loan-sharks/

Tory Minister Joins Calls For U-Turn On Local Welfare Cuts

This article was written by Patrick Butler, social policy editor, for The Guardian on Wednesday 26th November 2014

A Conservative minister has joined growing Tory opposition to the government’s proposals to slash funding for local welfare assistance, which provides emergency help to Britain’s poorest citizens.

Amber Rudd, the minister for climate change, said she had been “fighting” to persuade the Department for Work and Pensions (DWP) to reinstate the £180m a year funding for local authority welfare schemes.

Local welfare assistance, which replaced the old nationally run social fund 18 months ago, provides “safety net” support for low-income families tipped into sudden crisis as a result of homelessness, domestic violence, flooding, illness or sudden financial setback.

Rudd, the MP for Hastings, and a former Treasury whip, is the most senior Tory politician to demand the government reverse plans to scrap central funding for local welfare schemes from this April.

She told BBC Radio Sussex: “We all locally who care about the most vulnerable in society are fighting very strongly to make sure the government reconsiders.”

Separately, Tory-run Essex county council has written to ministers to warn the proposed cut would leave vulnerable people without help and at the mercy of loan sharks.

The council’s leader, David Finch, said:

I want ministers in London to think again and keep funding in place because the consequences of families going through crisis for longer will be far more expensive.”

Other senior Tories who oppose the scrapping of local welfare funding include: Keith Glazier, the leader of East Sussex county council; David Hodge, the leader of Surrey county council; Sir Merrick Cockell, a former leader of the Local Government Association (LGA); and Louise Goldsmith, the leader of West Sussex county council, who has call the plans as “a cut too far”.

A decision on the future of local welfare funding is expected in December alongside the local government funding settlement.

Rudd accused the DWP and the Department for Communities and Local Government (DCLG) of trying to offload accountability for local welfare on to each other, and promised to “hold ministers’ feet to the fire so that somebody takes responsibility for it”.

Although Rudd said she believed that local government needed to make cuts, it was “too hard” on councils to be expected to run local welfare assistance schemes without separate DWP funding. Councils have experienced an average 37% cut in budgets over the course of this parliament, with more financial pain to come.

The government insists councils can continue to fund local welfare from within their central grant. But the LGA has warned that withdrawal of funding will mean one in six councils will be forced to decommission their schemes, leaving tens of thousands of families without state help.

In a joint letter to ministers with the charities Child Poverty Action Group (CPAG), the Children’s Society and Crisis, the LGA says that scrapping local welfare “will have an acute impact on vulnerable residents and their children and will mean they have nowhere to turn in their time of greatest need”.

Naomi Ridley of Hastings Furniture Service, a charity which has worked closely with other Sussex charities to win cross-party support to save local welfare funding, praised Rudd’s intervention:

We enthusiastically welcome the support of a government minister for the campaign, and hope she can convince her colleagues that abolishing the fund is a terrible, short-sighted mistake with vicious consequences.”

Charities which work with families in poverty have also stepped up pressure on ministers to protect local welfare funding. The work and pensions secretary, Iain Duncan Smith, was told during an official visit to a charity “furniture bank” in Ipswich last week that his proposals would penalise the most vulnerable members of society.

> Like his decisions so far haven’t ?

The Furniture Re-Use Network whose 250 members have seen requests for help for secondhand goods, such as beds and fridges, rocket during the past 18 months, said councils were failing to keep pace with an explosion in poverty. It accused ministers of ”having no idea of the scale of unrecorded need of in-crisis households.”

The DWP announced in January that it would stop funding local welfare assistance after 2015, despite promising during the passage of the Welfare Reform Act in 2012 that it would conduct a review of the policy before making a decision.

After being threatened with court action over this decision by Islington council and CPAG, however, the government promised in September to reconsider its position and issued a consultation.

The consultation, which closed on Friday, has been criticised because none of the three choices offered to consultees involve continued funding. The housing charity Shelter called it “a cheap pavement shuffle cup trick”.

The Guardian’s investigation of the scheme in April found widespread chaos: in many councils local welfare was underspent, under-advertised and underused. Record numbers of families needing help were turned away and “pushed into the arms of payday lenders and loan sharks”.

A government spokesperson said:

The changes made to funding of local welfare provision were never about abolishing support and it’s a total misrepresentation to suggest they were.

“This government has given councils more control because they understand
best their local area’s needs – this is in contrast to the previous
centralised grant system which was inflexible and poorly targeted.

“We have completed a consultation on how funding should be provided for 2015/16 and will publish the results shortly.”

Source –  Welfare Weekly,  26 Nov 2014

http://www.welfareweekly.com/tory-minister-joins-calls-u-turn-local-welfare-cuts/

Councils Sit On £67m In Emergency Help For Poor

This article was written by Patrick Butler, George Arnett, Sarah Marsh and Samir Jeraj, for The Guardian on Sunday 20th April 2014

A fledgling scheme to provide emergency help to the poorest in the country is in chaos, with £67m left unspent and record numbers of families being turned away.

Figures released in response to Freedom of Information Act requests indicate that by the end of January councils in England were sitting on £67m of the £136m that had been allocated to local welfare schemes. Half of local authorities had spent less than 40% of their funds.

An analysis by the Guardian shows that under the new local welfare assistance schemes, four in 10 applications for emergency funds are turned down, despite evidence that many applicants have been made penniless by benefits sanctions and delays in processing benefit claims. Under the previous system – the social fund – just two in 10 were. In some parts of the country, as few as one in 10 applicants obtain crisis help.

The schemes were designed to help low-income families in crisis, such as those in danger of becoming homeless or subjected to domestic violence. Charities and MPs have warned that those denied help are turning to food banks and loan sharks.

Gillian Guy, chief executive of Citizens Advice, which offers debt and legal advice, said the emergency financial support system was in chaos. “When the safety net fails, people are left with no way of putting food on the table, paying the rent or keeping the lights on. Confusion over what help is available and who to approach means that people who need support are left high and dry.

“People are in danger of being pushed into the arms of payday lenders and loan sharks by the chaotic emergency support system. Citizens Advice bureaux see people in desperate need of support who have nowhere else to turn when jobcentres and the local council don’t give out support.”

Under the new system, emergency funds are no longer ringfenced, meaning that councils can divert unspent cash to other budgets. Local welfare assistance schemes were created a year ago in 150 English authorities, alongside national schemes in Wales and Scotland, following the abolition of the social fund.

Most schemes do not offer cash or loans, but support in kind, such as food parcels and supermarket vouchers. The social fund provided loans repayable against future benefit payments – typically about £50 – and larger capital grants to destitute families who needed help to furnish flats or replace broken domestic appliances.

Despite charities reporting that demand for help has rocketed as a result of economic hardship and welfare cuts, some councils spent more money setting up and administering their welfare schemes than they gave to needy applicants.

Councils told the Guardian they had provided less in emergency funding than in the past because there was a lack of public awareness of the new system. Some had failed to advertise their schemes, while others set such tight eligibility criteria that many applicants – typically including low-paid working families, benefit claimants and those deemed to have not lived in their local area for long enough – were turned away.

Simon Danczuk, the Labour MP for Rochdale, who has repeatedly raised the issue of local welfare in parliament, said his constituents frequently reported struggles to get crisis help. Constituents he has helped include:

• A low-wage family with three children, including an 11-month-old baby, who applied for £35 to pay for gas, electricity and baby food to help them until payday. The council scheme initially referred the family to a food bank. After lobbying by Danczuk, they were given £20 for energy costs, but were refused money for baby food.

• A pregnant mother and her partner, who after benefit changes were left with £7 a week for food after rent and council tax. They were told that they could not apply as the scheme was for “genuine emergencies” such as fires and flood.

In each case Danczuk believes the families would have qualified for emergency support under the social fund. “Central and local government are pushing people into the hands of payday loan companies and food banks. They have in effect privatised the lender of last resort,” he said.

A spokesman for the Department for Work and Pensions, which funds local welfare schemes run by 150 local authorities across England, said: “In contrast to a centralised grant system that was poorly targeted, councils can now choose how best to support those most in need. It is for local councils to decide how they spend their budgets.”

But a Conservative council leader has called on the government to reinstate local welfare assistance funding, calling it a “cut too far”. Louise Goldsmith, leader of West Sussex county council, said the proposed cut would leave many low income families without vital support when they were going through a “tough patch in their lives”.

A briefing note prepared by the council found that 43% of 5,582 individuals and families helped by the local welfare fund to the end of February had applied because they had been left penniless by benefit sanctions and delays.

The Local Government Association has called upon the ministers to reverse the cut, and it is understood a number of councils and welfare charities are preparing to seek a judicial review of the government’s decision to cut local welfare assistance funding in April 2015.

Many councils are using part of their welfare assistance allocation to provide financial support for local food banks, which provide penniless applicants with charity food parcels.

Lady Stowell, a local government minister, told the House of Lords in January that local authorities were “doing a good job of supporting people in times of crisis and are doing it without using all the funding that has been provided so far from DWP”.

But Centrepoint, the homelessness charity said that local welfare assistance underspending meant many homeless youngsters could not get vital support when they moved from hostels into independent living. “Councils need to start using these funds to address urgent need now and ensure that young people have access to it,” said Seyi Obakin, Centrepoint’s chief executive.

Two local authorities – Labour-run Nottinghamshire county council and Tory-run Oxfordshire – have scrapped local welfare assistance altogether and plan to divert the money into social care services..

Conservative-run Herefordshire  county council had spent less than £5,000 of its annual £377,000 allocation by the end of December last year, equivalent to 1% of its local welfare budget.It said its spending reflected low demand for crisis help, a claim disputed by Hereford Citizens Advice and Hereford food bank, which said they had been inundated with requests.

Labour-run Islington council had spent 80% of its emergency funds budget by the end of December last year and had spent all its emergency funds by April. It said it had encouraged its frontline staff to refer individuals to its local welfare scheme to ensure they got crisis help and assistance with any underlying problems, such as debt.

Local authorities are anticipating further problems over local welfare in 2015 when the DWP scraps funding for the schemes. Councils, charities and MPs have called on the government to restore and ringfence the crisis support allocation.

Councils say that in some cases they have refused emergency help because benefit claimants have been wrongly referred to local authority welfare schemes by jobcentres. Some councils have refused to accept applications from those who ought to have been offered a short-term benefit advance from their local jobcentre.

Scotland and Wales have their own welfare assistance schemes and these have higher applicant success rates than in England. In Northern Ireland, which still has the social fund, 70% of applicants received help.

Source – Welfare News Service  20 April 2014

http://welfarenewsservice.com/councils-sit-on-67m-in-emergency-help-for-poor/