Local welfare provision in England is at risk of collapsing if Government does not urgently review its approach and step in with more funding for local authorities. A failure to act will create widespread destitution, and put even greater pressure on already over-stretched housing, health, and social care services.

Those are the key messages from our new report – ‘The Decline of Local Welfare Schemes in England: why a new approach is needed‘ – which is published today (Weds 13th September).

The report follows an in-depth review of the outcomes from Government’s decision to abolish Crisis Loans and Community Care Grants and its replacement of these with ‘local welfare schemes’. It finds that the policy, adopted in 2013/14, has resulted in widespread cuts to the support that households receive when they experience a financial emergency or need help to live independently.

The research, which was funded by the Barrow Cadbury Trust, involved a desk based review of all local authority schemes in England, incorporating an assessment of Cabinet and Committee papers detailing current budgets for local welfare schemes and the reasons for cuts. From this exercise we were able to obtain information about current funding levels for schemes in around 70 percent of English local authorities. We also conducted interviews with eighteen people who have directly affected by the closure of schemes in Northamptonshire, Nottinghamshire, and Oxfordshire.

Key findings

  • Twenty six local authorities have now closed their schemes altogether;
  • A further forty one authorities have cut back spending on their schemes by over 60 percent;
  • Eleven of these have cut spending by over 80 percent and their schemes are now on the brink of collapse.

The cut backs, combined with benefit delays, are creating destitution.  For example, an unemployed 56 year old man in Nottinghamshire (which closed its local welfare scheme in 2014/15) told us how he has had no money for eight weeks because of delays in processing his benefit claim; he has been forced to use food banks, can’t pay the rent, and is on the verge of being made homeless.

They are also making it harder for people to live independently. For example, a 46 year old woman in Oxfordshire (which closed its scheme in 2014), and who was re-housed after a lengthy period of homelessness, has been living in a flat without any cooking facilities or bed for four months.

The report reveals that cuts to local welfare schemes are particularly affecting people with long-term illnesses or disabilities, young people leaving care, women fleeing domestic violence, people with prior experience of homelessness, and frail elderly people returning to their homes after a stay in hospital or who are struggling to remain independent and avoid going into care homes.  Cutting across these groups, the reduction in support is having a disproportionate impact on low income Black and Minority Ethnic communities.

The report also finds that cuts to local welfare schemes are counter-productive as a means of saving money as they are increasing the numbers of people needing higher cost interventions to help them with their deteriorating circumstances.  Relatively small grants can help people avoid homelessness, and reduce the pressure on health and social care services.

Summarising the findings, report author, and CfRC Director, Damon Gibbons said:

“Local welfare schemes are in meltdown. Government continues its assault on local government funding whilst trying to avoid responsibility for the consequences.  Our research reveals a depressingly bleak picture as a result.  More pain and misery for those individuals who fall on hard times and greater demand on housing, health, and social care services.  An urgent review of this policy is needed.”