Most councils will have to ‘significantly’ reduce emergency welfare if goverment cut goes ahead

Over half of councils will have to significantly reduce or scrap emergency relief for vulnerable families if government plans to cut funding for authorities go ahead, a Local Government Association survey has found.

Specific funding for local welfare assistance (LWA) has not been included in the government’s indicative financial settlement for councils in 2015-16, despite such funding having been provided in 2013-14 and 2014-15. Also, there is no indication that councils will be compensated for this loss of funding by an increase in their general grant from Whitehall.

With the government now forced to consult councils on removing the LWA funding, following a legal challenge by a group of 20 charities, community organisations and religious groups, the LGA called on ministers to reconsider.

“Many local authorities will be unable to afford to make up the difference at a time when we are tackling the biggest cuts to council funding in living memory,” said the chair of the association’s resources board, Claire Kober.

She continued: “Taking away this money could prove counterproductive and risks storing up much bigger, and more costly problems in the longer run.”

Local welfare assistance (LWA) came into effect in April 2013, replacing the discretionary Social Fund which had provided community care grants to disabled people or vulnerable people on out-of-work benefits, and interest-free crisis loans for basic expenses in emergencies. This reform meant funding was devolved to local authorities but with no requirements on how they should use it.

Some councils were concerned about taking responsibility for the funding with social workers potentially being scapegoated if people did not get the assistance they sought. There was also limited time to prepare for the new system and the limited budget meant some councils set tight eligibility criteria and did not widely advertise schemes. Ten months into the first year of LWA, an investigation by the Guardian based on freedom of information of requests showed the average spend by 139 councils at that point was 43% of the amount they had for the year.

However, the LGA survey – responded to by 58% of single and upper-tier councils – found that face-to-face applications to local agencies, rather than by telephone to a central system, have meant financial and non-financial support could be linked with opportunities to address the root cause of problems and lead to positive outcomes. Food parcels, or vouchers for food or gas and electricity bills or items such as kitchen appliances, have more often been provided, rather than cash grants and loans as under the Social Fund.

The LGA explored how authorities had been using the scheme since the funding was devolved. Solihull council, for example, noted there would be a gap as care leavers had often been eligible for community care grants under the previous system. Money was therefore made available for social workers to make payments in accordance with needs identified in leaving care plans.

Lancashire gave the example of a young man with addiction problems given financial support to aid resettlement on leaving rehabilitation care. This was combined with other support to help move him closer to the labour market, and he is now doing voluntary work with the initial referral agency.

The government made £347m available for LWA for a two year period from April 2013. When local government finances for 2015-16 were outlined in December 2013, no money was allocated for LWA, though the government did not confirm that it would not be providing funding through another source.

The campaign group Keep the Safety Net, whose 20 members include Child Poverty Action Group and Centrepoint, pointed out that “substantial funds had been made available to local authorities to support them in the design and administration of LWAs, investments that would be wasted if schemes no longer had an operating budget.” The group launched judicial review proceedings against the secretaries of state for the government departments involved, challenging the way the decision was made.

On 16 September, government lawyers signed a consent order agreeing to reconsider the decision to cease funding local welfare, rather than contest a judicial review.

The Department for Work and Pensions, the Treasury and the Department for Communities and Local Government are now forced to complete a review of local welfare provision that government had originally committed to do in 2012 to inform future funding levels, conduct an “appropriate” consultation and make a new decision on funding for local welfare provision for 2015-16. These steps must be taken by the end of the year.