Financial crisis help abolished, not localised

Last year 70 families in Kensington & Chelsea received emergency financial help. Assessed as being under exceptional pressure, they received grants totalling £56,000 under the community care grant scheme run by the Department for Work and Pensions.

Ten young people in the same borough who were leaving care and not entitled to benefit received an average of £50 as a crisis loan. Over 100 applicants who had money or giros lost or stolen received a total of £6,000, again as a repayable loan.

In Barnsley the need was evidently greater. Over 400 families under pressure received grants to a value of £208,000. There were also 10 care leavers not entitled to benefit and over 600 loans to cover lost or stolen money.

Details vary, but the same picture can be seen in local authority areas across the land from Aberdeen City to Yorkshire and Humber.

These community care grants and crisis loans are a kind of backstop for families in need. They can provide help fast to those whose fuel supply has been cut off or whose washing machine has given up. They make up the discretionary part of the Social Fund. The amounts of money are not great in terms of total welfare spending. But they can be a lifeline to severely cash-strapped families and individuals close to destitution. As the Child Poverty Action Group says, the Social Fund "provides an essential, if imperfect, source of support to many families on a low income".

But not for long.

These grants and loans are being abolished, effective next April. Local authorities have been told to devise and operate alternative schemes. Each has been allocated a sum of money, sent out last month in secret settlement letters. Those sums are less than what was spent when the DWP operated the scheme. In one authority, according to the CPAG, it is over 40 per cent less.
The problems are horrendous. Demand among families is increasing.

The money is not ringfenced, so councils may spend it wherever they think best. In fact, there is clear instruction from central government not to try to replicate the previous Social Fund schemes. The loan scheme is anyway impracticable for local authorities since, unlike the DWP, they have no means to collect repayments. In any case, some authorities are planning to run cashless schemes, offering only goods or services to applicants.

The CPAG has been running seminars across the country with local authority and third sector practitioners to help plan and share thinking. A detailed report is now being circulated that tries to find some kind of bright side as well as spelling out the "challenges". 

Perhaps the most telling phrase in the whole report comes as a message for central government from local authorities. Stop referring to the Social Fund being "localised". That creates unrealistic expectations among families. It isn't being localised, they say. It is being abolished.

PJ White is editor of youthmoney.org.uk