Drawing on expertise across the UK, the APPG has highlighted the importance of choice, dignity and flexibility in delivering crisis support. Are there any other best practice principles that effective crisis support should uphold?
The vast majority of councils in England deliver crisis support through their discretionary Local Welfare Assistance Schemes (LWAS). These provide emergency funds and other support to the most economically vulnerable households and play an essential role in addressing immediate hardship.
Since 2015, councils have not received any separately identified funding from Government to deliver LWAS and councils are not statutorily required to provide crisis support or wider LWAS schemes. While this has afforded councils a degree flexibility over how they design support to meet local need, the absence of dedicated and stable funding continues to limit some councils’ ability to deliver the level of support they would like.
Our good practice guide, 'delivering financial hardship support schemes', examines the different models of crisis support offered by councils across the country. It identifies that most effective forms of council crisis support schemes provide residents with choice, dignity, and flexibility. Schemes should also be accessible and provide a pathway to wrap-around support services that tackle more deep-rooted issues and address users’ longer-term needs. Best-practice indicates that to deliver good outcomes for users, crisis support should be aligned with a much broader support infrastructure, which includes a combination of council-delivered services and referral partnerships with voluntary sector and other statutory organisations. Wrap-around support can include welfare benefit entitlement checks; debt advice; and employment, health, and housing support.
Ensuring that proactive support services are aligned to hardship schemes is essential to not only maximising finite resources and providing financial help to the most vulnerable but also for converting this short-term remedy into effective longer-term financial stability, by addressing wider circumstances and needs. A number of councils make access to this wider support provision a formal condition of accessing their hardship scheme, to ensure families who are trapped in cycles of financial crisis get the full range of support available.
For example, in the London Borough of Barking and Dagenham the councils’ hardship scheme works in conjunction with the Homes and Money Hub to support residents across a broad range of services. Based in the local library, the Hub offers ‘drop-in’ support including budgeting and debt advice; referrals to the ‘Job Shop’ which helps people to access the adult community learning offer, improve their skills and find work, in addition to other further advice and support.
Another principle that should underpin the design of crisis support is accessibility. To reach all those who need help, it is important that those in crisis have access to clear, up-to-date information on what help is available locally. Hardship schemes, including crisis support, should be promoted through as many different channels as possible. It is standard practice for councils to promote their local hardship schemes through their council websites and via the use of local infrastructure such as community hubs, customer service centres, relevant council departments (eg Housing Options team) and registered social landlords. Additionally, schemes are often promoted to local voluntary / charitable organisations working with vulnerable people who would likely benefit from support (eg via local Citizens Advice bureaux). Based on existing best-practice, the LGA recommends that hardship schemes are also underpinned by a publicly accessible policy document, which sets out relevant principles, standards and criteria for the available support. This should also be accompanied by a simple factsheet with the details of the hardship scheme, so people know what support is available and how they can access it.
To reduce barriers to access, residents should also be able to apply for support through a range of different routes– such as online, telephone and via trusted local partners. This is important to reach people who become newly vulnerable, who may not have previously engaged council hardship schemes, or sought support through council’s local VCSE partners. It also vital that there are off-line routes to apply for support for those who are digitally excluded, for example by providing written communications or enabling people to apply over the phone.
Over the past decade, councils have faced significant reductions in funding to their core budgets while facing rising demand across services, which has constrained their ability to match the demand for local welfare assistance with investment. We have long called on Government to restore separately identified funding for local welfare. This will be essential to ensure all councils have the resources and capacity to plan and deliver effective local welfare provision, that balances crisis support with integrated preventative services.
In response to COVID-19 and the current rise in cost of living, Government has provided councils with a various emergency funds to support their most financially vulnerable residents with cash grants, such as the Household Support Fund and the COVID Winter Grant Scheme. This funding is separate from LWAS and is being delivered in addition to any existing local welfare support and crisis support already offered by councils.
Councils have worked at pace to deliver these grants, but inflexible funding criteria and the short-term nature of the funds has limited councils’ ability to strategically determine how the grant is spent. For example, councils have not been able to spend any of this funding on advice services and are they limited on who they can offer it to.
While this funding is welcome and has provided much-needed crisis support, its short-term, emergency nature has meant that its impact in building people’s longer-term financial resilience and stability has been limited. Therefore, funding delivered through similar schemes should not be seen as a substitute for an adequately funded mainstream benefits system or local welfare schemes.
What is the most effective, appropriate, and dignified form of crisis support and why?
Through their services and outreach work, councils have a strong understanding of their local community and are therefore best placed, working with local voluntary and community sector partners, to identify the needs of their vulnerable and lower-income households and design tailor crisis support.
Crisis support funding cannot, and should not, be relied upon to fill the gaps in our social security safety. It should instead help meet urgent need and act as a gateway to further-wrap around support. To ensure flexibility and effectiveness to meet a wide range of needs, hardship schemes should be broad and allow for the provision of a range of items, including emergency food, fuel and other essential non-food items. Applicants should be able to identify which support is most appropriate for their situation through the assessment process.
LGA commissioned research found that following the localisation of crisis support in 2013, councils have moved from primarily providing direct cash payments to favouring the provision of in-kind support, such as goods or vouchers. NAO research has also identified that only a quarter of councils continue to offer cash support.
Councils have moved to providing in-kind support instead of direct cash payments for a number of reasons. The misuse associated with the former Social Fund scheme has steered some councils away from giving cash payments. Moreover, purchasing household items on behalf of individuals or offering vouchers and pre-paid cards for specific goods, such as food, energy, and furniture, means that councils can be certain that people receive the support that they have requested. This approach can also make monitoring and impact analysis easier for councils, which are important tools to understand and demonstrate need in the local area.
However, there are concerns that where in-kind support is offered inflexibly, it can act as a disincentive to potential applicants, as people feel the support on offer will not meet their needs. With this in mind, many councils offer versatile vouchers and pre-paid cards, such as the Charity Shop Gift Card and supermarket vouchers that can be used at multiple retailers. These offer users an appropriate and dignified option that prioritises choice and ownership, while still negating the risk of misuse. LGA best-practice guidance also encourages councils to offer a mixture of both in-kind support and cash payments, to enable frontline staff to tailor support to people’s individual circumstances and offer cash payments when this is the most suitable option.
In some cases, the provision affordable credit can also be used to help people in financial crisis, either in addition to in-kind and cash-based grants, or when people do not meet eligibility criteria for the LWAS. Our report exploring the role of councils in improving access to affordable credit and financial services for low-income households, highlights that that the provision of low-interest loans can be an effective component of local welfare assistance, which can prevent people from turning to high interest pay-day loans.
Recent polling by London-based lender Plend showed that around 1 in 5 people in Britain currently feel that they are not able to access credit from mainstream lenders. Given their role as local community leaders and place shapers, and ongoing work with credit unions and Community Development Financial Institutions, councils are well placed to support, develop, and promote the delivery of affordable and responsible finance within their areas to meet this growing need. Affordable credit is an effective tool for frontline staff to offer when appropriate, as it can help build financial resilience and capability, and reduce the need for borrowing in the future.
In 2019, Bristol City Council made a £500,000 investment into the Bristol Credit Union (BCU) to support the long-term, sustainable growth of the credit union and improve residents’ access to affordable credit. The investment aimed to support BCU to triple in size over 5 years, boost access to affordable credit, create local jobs in the ethical finance sector and support outreach workers to provide financial advice in the most deprived wards in the city. In 2019/20, the Bristol Credit Union made loans to over 870 people who live in the bottom 20 percent of areas by levels of deprivation. Assuming they had used a high-cost lender instead, the Union saved these borrowers just under £690,000 across the year. Across all members in Bristol and Bath, the Union is potentially saving its members over £2.9 million.
What forms of crisis support do people facing destitution prefer to access and why?
Councils are committed to supporting those facing financial crisis in a way that is both dignified and meets their needs, including addressing any wider concerns around debt, housing insecurity, and employment.
A number of councils have put residents at the heart of their decision-making process when designing policies aimed to support those on a low-income or in destitution. For example, Leeds City Council and Bournemouth, Christchurch and Poole Council are working with the Poverty Truth Network, which brings people with experience of poverty together with local decision makers, to co-create solutions to tackle poverty and inform local service design and delivery.
Co-designing services in this way and consulting those experiencing poverty offers an important opportunity to take local preference into account and ensure services deliver the biggest impact on people’s lives. As places and communities differ, the form of crisis support that is needed may vary between hyper-local areas. Taking a local, place-based approach and co-designing services with those who use them is therefore important to understanding and delivering on communities’ needs.
In what ways should crisis support be tailored to meet the needs of people from different demographics? For instance, families with children, disabled people, people with no recourse to public funds, different ethnic groups and religious backgrounds
Considering the needs of people from different demographics is vital to ensure the effectiveness of the support. Councils are working to deliver local welfare and crisis support that is appropriate and accessible. One of the important strengths of local welfare assistance schemes is councils’ ability to work flexibly to adapt support to the needs of their communities.
While recent funding from the government, such as the Household Support Fund, has been helpful, the strict spending requirements for these funds have limited councils’ ability to be innovative and meet all local support needs.
In April 2022, the Government updated the spending award criteria for the Household Support Fund, so that councils must spend at least a third of the funding on households that include a pensioner, in addition to the third that is ringfenced for households that have a child. While we are pleased that pensioner poverty has been recognised as a national priority, councils have told us that this new criteria for the Household Support Fund has hindered their ability to deliver crisis support where they know it is needed. Areas with relatively young populations, e.g. Brighton and Hove and Oxford City, may find the requirement to spend a third of the grant on pension-age households an inefficient use of the Household Support Fund as this limits the support available for other vulnerable low-income households in different demographic groups, such as disabled people or unpaid carers.
To allow councils to plan effectively and better meet all residents’ needs, it is essential that the Government puts local welfare funding on a long-term sustainable footing. This will allow councils to plan and deliver more holistic support that incorporates service-users’ voices and lived experience, and builds in wrap-around support from wider services that can improve people’s longer-term financial resilience, social mobility, health and wellbeing.
If the Government decides to deliver welfare support through further short-term pots of funding, it is important that they remain locally delivered. We also urge the Government to review the spending criteria placed on the Household Support Fund, in consultation with the sector, to enable councils to use their local knowledge and discretion to target support to where it most needed within their population. Removing the nationally-set requirement to spend a third of the grant of pension-age households and allowing councils to carry over the current funding into the next spending period is likely to deliver more effective outcomes for communities.
We would also like Government to work with us to develop a shared outcomes framework for nationally provided local welfare funding, which would help to ensure that crisis support is more effectively integrated with prevention. This would also help to ensure that data on outcomes of local welfare provision is collected more consistently to assess its impact on wider social, health and economic outcomes.