LRD guides and handbook April 2018

State benefits and tax credits 2018

Chapter 3

The Social Fund and Local Welfare Assistance


[ch 3: pages 39-41]

The Social Fund may be able to help with one-off or occasional expenses. From 1 April 2013, community care grants and crisis loans were abolished in England and Wales and replaced with different welfare assistance schemes and advance payments. The government also scrapped the Local Welfare Provision Grant, which provided councils with funding to provide crisis loans and community care grants from 2015-16. Funding of £172 million in local welfare assistance schemes was provided on a non-ring-fenced basis up to 2015, but the government announced that from April 2015, any support would have to come from within local authorities’ general funds.


Research by the Centre for Responsible Credit, published in September 2017, found that the government’s decision to do this has resulted in widespread cuts to the support that households receive when they experience a financial emergency, or need help to live independently.


Its report, The Decline of local welfare schemes in England: why a new approach is needed, is based on information about current funding levels for schemes in around 70% of English local authorities. It found that 26 local authorities have closed their schemes altogether; a further 41 authorities have cut back spending on their schemes by over 60%; and 11 of these have cut spending by over 80% — their schemes are now on the brink of collapse.


The research found that these cuts, combined with benefit delays, are creating destitution, making it harder for people to live independently. They 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. It found that the reduction in support is having a disproportionate impact on low-income Black and Minority Ethnic communities.


The report also sets out 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, it says.


The Child Poverty Action Group says that the remaining schemes run by local councils vary. They may provide vouchers to pay for food, fuel or clothing or bigger basic living items such as beds, cookers and fridges, but do not usually give out cash. It has further information and a postcode search tool to help find local welfare assistance schemes on its website. 


In Scotland, the Scottish Welfare Fund was set up to replace the Social Fund community care grants and crisis loans. In Wales, there is a Discretionary Assistance Fund.