Do you remember Community Care Grants and Crisis Loans? Well, if you do, well done, because they were abolished in April 2013, after which local authorities have had the responsibility of meeting this kind of need through local welfare assistance schemes. From the outset these weren't as good as the old system, not least because local authorities are not placed under any duty to provide any particular level of support or to ring-fence the money involved. As the government puts it, 'local authorities could spend as much or as little of the funding as they wanted, depending on their own local priorities'. Mmm...
Anyway, at least it was funded. Central government allocated local authorities a total of about £175 million for 2013-2014, and about £172 million for 2014-2015.
However in December 2013 government announced - unexpectedly - that they would give local authorities no money at all from the beginning of tax year 2015-2016 for these purposes.
To say this was bad news is clearly an understatement, particularly in the context of the appalling extent of funding cuts to the poorest local authorities. According figures recently released in the Independent, between 2010/11 and 2015/16 the ten local authorities with the highest levels of health deprivation and disability have seen their spending power per head fall by an average of £275.69, compared with £23.19 in the ten local authorities with the lowest levels of health deprivation and disability. The government's own figures, quoted by the Child Poverty Action Group's policy note on local welfare assistance schemes, show that in the final year of the old-style social fund, 32.4% of the money used to pay Community Care Grants was paid to people with disabilities. It is hard to see how the poorer local authorities, in particular, would be able to fund any kind of local welfare assistance in these circumstances.
The decision to remove this funding was challenged by judicial review. The Child Poverty Action Group (CPAG), an 'intervener' in the case, pointed out that there was no indication in Parliamentary debates that the support for the schemes would be temporary, and also noted that although the DWP had committed to reviewing the schemes in 2014/15 to 'help inform future funding levels', they hadn't actually done this.
The case was settled when the government agreed to carry out a consultation. Their initial response to the consultation was not encouraging: They argued that there was already money allocated for this kind of thing in general grant funding to local authorities totalling about £130 million for the year 2015-2016.
However, on 3rd February Kris Hopkins, The Parliamentary Under-Secretary of State for Communities and Local Government, announced that the government was, after all, going to fund the scheme again. Unfortunately, they have only agreed to provide £74 million, which still amounts to a cut of about 57% compared with the previous year.
As the Chief Executive of CPAG, Alison Garnham, observed, in her response :
"It’s obviously disappointing that despite all the evidence ministers are still insisting on a cut targeted at the poorest in their moment of greatest need but the £74m announced today may help preserve the foundations of local welfare assistance schemes which are a crucial last resort for people in acute need".
Finally, and crucially, there are two other problems with the local welfare assistance schemes: there is no new statutory duty for local authorities to provide anything; nor is the money provided by central government ring-fenced. Combining these with the punitive pattern of general funding cuts to local authorities we have the worst possible kind of post-code lottery: areas of high deprivation are going to have larger numbers of people approaching them for help, and less assistance - if any - to offer them. Local welfare provision in 2015-16: Consultation Summary of responses, paragraph 1
 "Most deprived English councils suffer biggest cuts in spending power", Independent
 CPAG Policy Note 1: Local Welfare Schemes (May 2014) - Section 4: who benefits from LWAS?
 CPAG Policy Note 1: Local Welfare Schemes (May 2014) - Section 5: the future of LWAS?
 Local welfare provision in 2015-16: Consultation Summary of responses, paragraph 4
 Hansard - written statements 3rd February 2015
 CPAG responds to local welfare decision, CPAG, 3rd February 2015
 Local welfare provision in 2015-16: Consultation Summary of responses, paragraph 1