TOWN hall chiefs are calling on the Government to grant them the funding they need to provide a “vital” local safety net for hardpressed residents.
Ahead of next month’s Spending Review, the Local Government Association (LGA) has called on the Chancellor of the Exchequer to “fully fund” councils in their provision of support for low-income households.
The LGA also wants the Government to better evaluate how local financial support can reduce the demand for other high-cost public services, such as health, housing and social care.
The organisation, which represents councils in England and Wales, says that millions of such households face financial difficulty, growing rent arrears and debt, which is adding to the pressures local authorities face.
The LGA has published a new report, Reshaping Financial Support, which sets out how – despite the pressures – councils are working with low-income households to improve the provision of advice, and amending debt collection practices.
It says that it plans to deliver some pathfinders with partners and councils later in 2019 to take forward the report’s recommendations and further develop and explore local approaches to strengthening and delivering financial support.
“In spite of financial challenges, many councils are still finding ways to provide direct and indirect financial support to those in financial difficulty or at risk of financial exclusion because of the vital role it plays in preventing crisis and improving people’s lives,” said Councillor Richard Watts, chair of the LGA’s resources board.
“It also reduces the need for more costly interventions, for example, housing, health and social care services.
“This is becoming increasingly difficult and huge concerns remain about the future of local welfare funding into the next decade.”
Councils used to receive specific government funding for local welfare schemes but this stopped in 2015, the LGA points out. It was being used to pay for short-term crisis support, to support people through change, for example moving on from a period of homelessness, and to prevent financial hardship.
Having lost 60p out of every £1 it had from government to spend on services since 2010, the LGA says that providing crisis payments and in-kind support to those in need from local budgets has become a “stretch too far” for many councils.
This has led to many having to either scale back or close these schemes completely in recent years.
Councils have received £800 million to provide Discretionary Housing Payments (DHPs) to residents between 2015 and 2020. This is given by the Government to help support households affected by the removal of the spare room subsidy, Universal Credit, the benefit cap, and changes to Local Housing Allowance (LHA) rates.
However, this funding is increasingly having to be used to make up systemic shortfalls and there is no guarantee that it will continue itself after 2020.
“The reasons households get into debt or financial difficulty can be complex,” Watts added. “Debt is often a symptom of wider problems, as well as a cause.
“Councils need the resources and capacity to disentangle and address complex issues, focus on prevention and bring services together. Unless local support is effective there is a risk that we entrench poverty and its associated problems.
“It is vital that the Government’s forthcoming Spending Review recognises the importance of local support to achieving its wider aims in reforming the welfare system and improving outcomes for low-income households.”