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23.04.14

Councils sit on emergency funds for poor

Nearly half of the £136m allocated for local welfare schemes has been left unspent and 40% of families are being turned away by local authorities, freedom of information requests by the Guardian have revealed. 

The paper’s analysis shows that about half of local councils had spent less than 40% of their funds and, under the new local welfare assistance schemes, four in 10 applications were turned down. 

Local welfare assistance schemes were created 12 months 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. In comparison, the social fund provided loans repayable against future benefit payments – typically about £50. The new schemes were designed to help low-income families in crisis, such as those in danger of becoming homeless or subjected to domestic violence. 

Gillian Guy, chief executive of Citizens Advice, said: “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.” 

A spokesman for the Department for Work and Pensions (DWP), stated that in contrast to a centralised grant system that was poorly targeted, councils can now choose how best to support those most in need. 

However, a new report by Oxfam and the New Policy Institute (NPI) has revealed that some 1.75 million households in Great Britain have seen their incomes cut in the last three years as a result of welfare reform. 

The report, Multiple Cuts for the Poorest Families, warns that wide-ranging cuts are changing the shape of welfare support at a time when rising prices are making it harder for families to make ends meet. As a result, job seekers, carers, single parents or those with a disability or illness who are unable to work are being pushed deeper into poverty. 

In the last year alone, 400,000 households have been pushed further into poverty by cuts to housing benefit or council tax support - households affected by both of these cuts typically lose around £18 per week. 

Mark Goldring, Oxfam chief executive, said: “This is the latest evidence of a perfect storm blowing massive holes in the safety net which is supposed to stop people falling further into poverty. 

“We are already seeing people turning to food banks and struggling with rent, council tax, childcare and travel costs to job centres.  At a time when the five richest families in the UK have the same wealth as the bottom 20% of the population it is unacceptable that the poorest are paying such a heavy price." 

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