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Councils underspend on local welfare after restricting criteria

Councils are digging into local welfare provision underspends from 2013-14 to help finance schemes this year as a result of reduced funding from central government, the National Audit Office (NAO) has found.

Since 2013, both local and central government have reduced overall spending on discretionary support to help people meet urgent needs for food, heating, clothing and essential household items.

The Department for Work & Pensions paid grant funding of £347m to single-tier and county councils for 2013-14 and 2014-15 to provide local welfare provision after Whitehall scrapped crisis loans and community care grants, but four-fifths of councils did not spend all the cash they were given. One-quarter also did not expect to spend it all in 2014-15.

The auditor found that councils had “acted cautiously” in designing local welfare support due to concerns over high demands and uncertain funding after 2014-15. As a result, they initially set restrictive eligibility criteria and limited public awareness of the available support.

With the underspends retained in 2013-14, councils are now funding provision in 2015-16 when a reduced amount of cash is included in their revenue support grant from central government.

But the NAO found that while the department took some steps to help councils develop local welfare provision, especially as it moves away from central grants, councils still claimed this support was of “limited value”.

Amyas Morse, head of the NAO, said: “Councils provide discretionary local welfare support, but increasing numbers are stopping doing so, and less is being spent overall now than in 2013.

“The consequences of creating this gap in provision are not understood, either in terms of impact on vulnerable people or of creating potentially costly additional care or medical needs in the longer term.”

The auditor also concluded that while councils provide different types and levels of support, there is no widespread benchmarking to improve cost-effectiveness. They usually provide help in the form of furniture and white goods, food vouchers and fuel card top-ups, with just 24% offering help in cash.

Local authorities claimed that this shifting from cash to goods helped reduce the scope for fraud and targeted local needs better, but it has also discouraged some from applying for help.

And in areas where local welfare provision has decreased, charities have reported growing demand for their support. They are now concerned that they may not be able to meet extra demand if this provision ceases.

Overstretched council budgets

Cllr Claire Kober, the LGA’s resources portfolio holder, said councils have “successfully and innovatively” worked their way around local welfare assistance funding in recent years, but acknowledged that the range and scope of available support varies from place to place.

“This variation has been driven by the significant funding shortfalls faced by many councils across the country and the government’s often piecemeal approach to funding the local safety net. We recognise that more can be done to identify and share good practice but the ability to tailor schemes to local circumstances has raised the overall standard of support available to those in need,” she added.

“Instead of continuing to provide separate money for local welfare assistance, the government wants councils to find the £74m funding it provided last year from existing budgets at a time when they face huge financial challenges. This will put additional pressure on existing council services.”

For some councils, Kober said, providing crisis payments derived from local budgets is “likely to be a stretch too far” without extra funding, with a real risk that many will not be able to afford running their local welfare schemes – or will at least have to scale them back substantially.

“Councils can bring local services together in a way central government will never be able to in order to ensure no-one falls through the cracks,” she continued.

“That is why the government should give sufficient funding to local councils to provide the local safety net alongside the devolution of responsibility for employment and skills support, integrated support for families and greater control over the supply of social housing provision.”

The PCS (Public and Commercial Services) union went further, claiming that the report highlighted a “worrying lack of information and coordination” across the scheme.

Its general secretary, Mark Serwotka, said: “Emergency social security support is a lifeline for families, yet the government appears happy to play politics by shifting all the risk and blame to local authorities.

“Ministers' complacency about the level of need and the hardships people face is sickening, particularly when they have cut council funding by more than a third.”

It is yet to be seen how councils will react to the government’s provisional local government finance settlement for 2016-17, which proposed the continuation of the usual £129.6m funding distributed in line with local welfare provision funding in 2014-15.

PSE will cover responses from all relevant council groups this week and early next week.



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