Amid growing poverty, councils have failed to save fund for those in need

From April 2015, a £180m a year hardship fund will be abolished. Councils have simply not made a strong enough argument for it

 

“Poverty can never be tackled simply through central government schemes. There is a growing need for more innovative approaches.”

Iain Duncan Smith‘s axe has struck again. This time its local authority welfare assistance schemes on the block. But we’re not talking reform or even cuts. The scheme had already been significantly cut last year. From April 2015 a £180m a year hardship fund will be abolished completely. That’s right. Scrapped. A vital safety net will no longer be there.

For years I’ve seen the value of crisis loans, which used to operate under the social fund until the government devolved funding last year, allowing councils to set up their own discretionary crisis funds. They’re a critical part of the welfare system to help people in desperate need.

Yet for all the welfare campaigns and demonstrations highlighting changes to the benefit system this has largely slipped under the radar. Crisis funds have not had the attention they deserve.

That’s why, while deeply disappointed at the government’s decision to axe the scheme, I wasn’t all that surprised. After battling with my own local authority to ensure that people in need were able to access their crisis fund I soon became aware that councils across the country were not using this fund properly.

Constituents had come to see me in real need and they could not access the fund. I met one woman who was over seven months pregnant. Her cooker had broken and she desperately needed funds so she could eat. She was so desperate that she was looking for work even at such a late stage of pregnancy. The council’s crisis fund turned her down. Another couple came to see me struggling to pay their fuel bills. They had a disabled child and were looking for £30 to keep the meter running until one of them got paid at the end of the week. They were distraught. Again, they were turned down.

In both cases we were eventually able to get help, but when I made enquiries I discovered the council had tightened the criteria for the fund so that it prevented many genuine people in need from being able to access it. In the first six months, they had spent only 20% of the money available and more had been spent on administrative costs than had been given out.

I quickly found out that the picture for other local authorities was actually far worse. There had been a collective fear that they’d be inundated with applicants so the criteria had been tightened across the board. Caution was the watchword and funds were sitting in council bank accounts rather than reaching the poorest.

After sending out freedom of information requests to councils across the country, I discovered from a sample of 98 local authorities that the average spend in the first six months was around 20% – but in many cases the fund was just not working.

The worst authority was Hertfordshire county council, which had spent less than 1% of the £1,765,277 they received for the scheme. In the first six months they had spent just £11,990. The fact that the council had been awarded £373,000 to administer this fund showed the bureaucrats were doing very well at the expense of people who really need help.

Other councils were just as bad. Herefordshire had spent just 1% of their funding and their council leader, Tony Johnson, a former banker, went on national radio to say he was pleased with the results. Cumbria had also spent just 1% of their funding, Hillingdon had only spent 2%, Newcastle-upon-Tyne had only spent 3% and Manchester 6%. In all of these places poverty exists. Even in leafy Hertfordshire there are food banks and 32,000 children in child poverty.

I also came to see that some councils had a complete ignorance of poverty. There were examples where small grants to help a family feed their children were withheld until they’d been on a cooking course and one council offering a homeless man a voucher for a tent.

The government has to accept a large part of the blame for this. Their version of localism seems to be directing funds towards councils and waiting for them to fail so they can justify scrapping schemes. There has to be better guidance.

But I can’t help thinking that had there been more evidence of municipal innovation in tackling poverty, with stronger partnerships with the voluntary sector, then the Local Government Association could have prevented this fund being abolished by making a strong argument to retain it.

As it stands, both local and central government have failed the most vulnerable people in society. Poverty can never be tackled simply through central government schemes. There is a growing need for more innovative, local approaches. But where will the funding come from to develop these now?

Simon Danczuk is the MP for Rochdale and a member of the Communities and Local Government Select Committee.

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