Poor families hit by Social Fund changes

Some of the poorest families in England are at risk from changes to the Social Fund for people in financial crisis, says a report from the Children's Society charity. Key parts of the Social Fund have now been devolved to local authorities: but researchers found that the money given to local authorities to replace the Fund is less than half of what used to be allocated to it. 

Key points

  • There has been a real-terms cut of £151 million (46 per cent) in funding for local welfare assistance schemes, compared with money spent on community care grants and crisis loans through the Social Fund since 2010.
  • Almost two-thirds (62 per cent) of local authorities are no longer providing interest-free emergency loans through their replacement schemes – with the danger that this could drive vulnerable families deeper into debt, as they are forced to turn to loan sharks and high-cost money lenders.
  • The vast majority (81 per cent) of local schemes are replacing cash assistance support, previously provided by the Social Fund, with 'in-kind' benefits, such as food bank vouchers and pre-paid store cards.

Responding to the report, the Children's Society said there should be no further reduction in funding for welfare assistance schemes. It also called on the government to support local authorities to ensure the schemes provide interest-free loans for families in financial crisis; to stop local authorities restricting access to the schemes by imposing tougher criteria for claimants; and to ensure that schemes help to provide rent in advance, so people who are homeless, or in financial crisis, can secure a place to live.

Source: Sam Royston and Laura Rodrigues, Nowhere to Turn? Changes to Emergency Support, Children's Society
LinksReport | Childrens Society press release | Guardian report

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Publication date: 
Jul 18 2013