Written evidence submitted by the Children’s Society [SRF 031]
- The Children’s Society believes that the future financial settlement for local government should include dedicated funding to enable all upper-tier councils in England to deliver a Local Welfare Assistance (LWA) scheme.
- LWA schemes, where effective, can provide vital emergency support to households experiencing a financial crisis. We know that even a short-term financial crisis can have a profound impact on the children and young people living in a household experiencing it.
- Funding of approximately £250 million each year for LWA schemes would bring total funding in England more closely in line with comparable emergency support schemes in Scotland (the Scottish Welfare Fund), Wales (the Discretionary Assistance Fund) and Northern Ireland (Discretionary Support), and enable local authorities to meet continued levels of need.
- This funding should be accompanied by clear guidance, setting out a minimum level of support which should be available in every local area.
Background to Local Welfare Assistance
- Local Welfare Assistance (LWA) schemes were established by many local authorities in England from 2013, after responsibility for delivering the crisis loan and community care grant elements of the previous Discretionary Social Fund was devolved.
- LWA schemes are intended to provide emergency discretionary support. Often the awards of help through these schemes are relatively small, but support households experiencing a financial hardship to overcome an immediate crisis.
- The type of support which LWA schemes deliver varies widely, with some providing cash grants or low cost loans, some offering food or fuel vouchers, and others supplying essential items such as furniture and white goods to those who can’t afford to buy their own.
- Since 2015, there has been no dedicated funding for LWA schemes. There is a nominal funding line indicated in the core spending power of local authorities, but no requirement for this funding to be used to deliver local welfare assistance.
- The 2020-2021 local government finance settlement identified £131 million of funding to higher tier local authorities in England for local welfare provision. However, this funding is provided on a non-ring fenced basis, and our research found that in 2018-2019 only 30% of this nominal allocation was spent on LWA schemes.
- With reduced overall funding for councils, a lack of guidance from central government, and the absence of a statutory requirement for local authorities to deliver this type of support, many local authorities have limited access to LWA schemes or ceased to run them altogether.
- According to research by The Children’s Society 1 in 7 upper tier local authorities in England no longer have a local welfare assistance scheme in place, although we are aware of a small local authorities who are exploring re-establishing such schemes to meet substantial need.
- Whilst local authorities do have other mechanisms such as Discretionary Housing Payments and Local Council Tax Support Schemes to support low income households, the emergency response to Covid-19 has demonstrated how important it is for councils to have the capacity to deliver timely and discretionary emergency support to households facing financial crisis in their areas.
Funding in 2020/21
- The Covid-19 pandemic has led to unprecedented levels of need for emergency support. Foodbanks have seen a significant increase in demand for help, and similarly many local authorities have reported increased demand for their LWA schemes.
- Government has provided a range of additional funding to local authorities in England which could be used to provide emergency support, including to strengthen local welfare assistance schemes:
- A £500million Hardship Fund for local authorities in England was announced within the budget in March 2020 as part of the Government’s response to COVID-19. This was new grant funding, intended “to support economically vulnerable people and households in their local [authority] area”. Accompanying guidance set out the that this funding should be used to provide all recipients of local council tax support with a reduction to their bill of £150, although once local authorities have made the mandated deduction to council tax bills, they were then able to spend any remaining grant funding on discretionary support such as local welfare provision.
- In June 2020, the £63 million Local Authority Emergency Assistance Grant for Food and Essential Supplies was announced, administered by DEFRA, with the aim of supporting people who are struggling to afford food and other essentials due to COVID-19. The funding was intended to be spent within 12 weeks, meaning that there was little opportunity for local authorities to consider and plan how they would utilise the funding most effectively.
- The £170million COVID Winter Support Grant, administered by DWP, was announced in November 2020 and will provide local authorities with funding “to provide support to vulnerable households and families with children particularly affected by the pandemic throughout the winter period”. 80% of the funding is ring-fenced to support households with children, and once again this is short-term funding to be disbursed between December 2020 and the end of March 2021.
- Whilst the additional funding provided for local authorities to deliver emergency support in 2020/21 has been very welcome, the various funding streams have been provided in a piecemeal and short-term way.
- This has limited the opportunity for local authorities utilise additional funding to develop and strengthen LWA schemes which will support households facing financial hardship in the longer term.
Recommendation for long-term funding
- Government should invest at least £250million per year in local welfare assistance over the longer-term, to give councils the confidence and certainty that they need to develop effective LWA schemes on a sustainable basis.
- This would bring funding more closely in line with comparable emergency support schemes in Scotland (the Scottish Welfare Fund), Wales (the Discretionary Assistance Fund) and Northern Ireland (Discretionary Support) on a per capita basis, and enable local authorities to meet growing levels of need.