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12 March 2024updated 13 Mar 2024 5:41pm

Household Support Fund extended – but councils still face a “cliff edge”

Jeremy Hunt gave the emergency support scheme a stay of execution, but its future remains in doubt.

By Samir Jeraj

The Household Support Fund was established as a lifeline for people struggling with rising prices – but under current plans the scheme closes at the end of September.

Since October 2021, the fund, administered by local councils, has paid out £1.3bn in more than 26 million emergency payments, predominantly to help people with the rising costs of energy and food, according to official statistics. The funding from central government has been haphazard, however. Tranches have been announced every six months with various strings attached, and without prior notice so councils can plan. Last week, the government announced a six-month extension to the Household Support Fund as part of the 2024 Budget just three weeks before the money was due to run out.

“The Household Support Fund – £1bn per year since October 2021 – has enabled councils to help hard-pressed families in the cost-of-living crisis,” Stephen Timms MP told a Westminster Hall debate on this topic at the end of January.

Graham Whitham from Greater Manchester Poverty Action, a non-profit, warned that councils were facing a “cliff edge” when the funding comes to an end. This comes against a backdrop of multiple councils declaring budget shortfalls and effective bankruptcy.

Most councils have used these funds to extend free meals for children through the school holidays. For example, Cambridgeshire County Council provided £15 a week in food vouchers for children eligible for free school meals using money from the Household Support Fund.

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Councils have also used the fund to set up discretionary support schemes or revived local welfare schemes that people have to apply for, and which provide vouchers or cash towards food, energy, and living costs. According to responses from 33 councils to freedom of information requests by New Statesman Spotlight, more than two million applications have been made to these schemes for emergency financial help across England, with 80 per cent of applicants successful on average.

[See also: “Austerity has returned”: The expert verdict on Jeremy Hunt’s Budget]

Few councils have under-spent these funds, according to information collected by central government, the exception being the City of London, which only spent half of its most recent round of funding. According to Whitham, this is because local authorities have used their knowledge about their communities to get support to people in need. This is both through using information on families accessing free school meals or council tax support, and working with non-profits and charities, including food banks and Citizens Advice bureaus, to reach people not already known to the council.

In fact, there has been such demand for the schemes that it has outstripped the funding available. Councils routinely have to close discretionary schemes funded by the Household Support Fund to stretch their available money. Citizens Advice reported one such case in which the fund opened at 9am and closed an hour later. There are also challenges that come with getting support promptly to people in crisis and the continued use of voucher-based schemes rather than providing cash directly, which, according to experts, gives people better “dignity, choice and control”.

Buffy Iles, who lives in Nottinghamshire, was referred to the Household Support Fund in July 2023. Her youngest son had come off child benefit and she needed to apply for Universal Credit on his behalf as he could not work due to disabilities. In January 2024, she was still waiting for payment. When it did arrive, it was a voucher worth less than a quarter of what she was expecting to receive.

“I’m completely in the dark. They’re not responding to me. I’ve got the local councillor involved,” she said.

Part of the pressure on emergency support schemes comes from the shuttering of both cost-of-living payments and funds to help with energy costs that were available in previous years – the Household Support Fund partly took over certain Covid-19 support schemes, and energy support funds were introduced after 2022. Benefit uprating will help mitigate the problems, but assistance is still needed. Citizens Advice has had 60,000 cases involving people needing help to access the Household Support Fund since its creation in 2021.

“Citizens Advice has always been clear that the Household Support Fund is a sticking plaster but at the moment it’s all we’ve got,” said Rebecca Rennison, principal policy manager at Citizens Advice.

The ability of councils to deliver these programmes even with central government funding is also under threat, as an increasing number of them issue bankruptcy notices and look to cut back core services to the minimum legal level.

Westminster Council, for one, has put in additional resource. “Any additional support has been welcomed during the cost-of-living crisis… as part of the coming Budget [we] will have put in about £10m from our local resources into a cost-of-living support,” said Adam Hug, leader of the council. Even so, he said the council was “desperate” to get the Household Support Fund in for the coming financial year.

 “There has definitely been a huge amount of pressure on individuals and teams with councils to deliver this kind of support, at a time when they’ve been dealing with lots and lots of other pressures,” said Whitham.

He wants central governments to “ring-fence” funding for local authorities over several years to give them some certainty and stability in planning how to use it best. Alongside this, he said, councils should adopt a “money-first” approach to the support they give to people to ensure it is really meeting need, rather than giving people vouchers.

“In the long run, we need policy changes which prevent people from hitting crisis point in the first place,” said Rennison. “However, there are currently millions of people in dire situations who can’t afford to heat their home or put food on the table and, for them, the Household Support Fund can be a lifeline.”

With additional reporting by Harry Clarke-Ezzidio.

[See also: An insider’s view of Nottingham City Council]

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