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Moving away from voucher and food parcels to ‘cash first’ disbursement for hardship payments

Gareth Evans explains the value of his Cash Perks system to support local authorities distribute direct payments to people unable to afford food.

 

A ‘cash first’ approach to food poverty means that whenever someone is facing money worries or financial crisis that they will be helped to access advice and support to maximise their income and access any existing financial entitlements before being sign-posted or referred to a food bank. IFAN has been working in local authorities across Scotland and more recently in England to support the co-development of cash first referral leaflets. The 'Worrying About Money?' leaflets are co-designed as straightforward resources for people facing financial crisis, and anyone supporting them, to quickly see available advice and cash first support options and which agencies are best placed to help. In Scotland, people facing financial crisis can apply to the Scottish Welfare Fund for a crisis grant (one of the leaflet's Step 2 options that can help) but in many areas in England local authority crisis grants are not available. 

Gareth Evans explains the value of his Cash Perks system to support local authorities distribute direct payments to people unable to afford food. 

The pandemic has exposed the importance of crisis grants for the escalating number of struggling households facing poverty across the UK. Growing demand together with the need to disburse over £270 million of Government Covid hardship funding in England, has led many Councils to redesign or reinstate their local welfare assistance schemes to give emergency support in relation to food, fuel and other essential household goods and items.  

The high-profile campaign by Marcus Rashford highlighting the inadequacies of food parcels and the provision of food vouchers has strengthened calls by many councils and anti-poverty charities, including the Independent Food Aid Network (IFAN), for crisis support for people unable to afford food to take the form of direct cash payments.  

Why adopt a cash first approach? There is a mounting evidence base on the benefits of a providing cash payments because they:

·  Are the favoured option for low-income households[1]; 

·  Involve treating people with dignity by removing the stigma often associated with using vouchers or food banks[2]; 

·  Provide greater choice and empowerment that enables the recipient to use the support in a way that best addresses their financial problems;

·  Deliver better value for money as families can shop around and make limited funds stretch further; 

·  Provide the quickest, most efficient and cost-effective disbursement option[3]; 

·  Deliver increased household incomes as well as health and educational outcomes based on international studies from US and Canada[4];

·  Offer impact and benefits that far outweighs the potential risk of misuse[5];

·  Generate significant savings for local authorities and central government by avoiding additional spending on costly crisis intervention[6]; and

·  Boosts the local economy with payments more likely to be spent with local, independent retailers, rather than major supermarket chains. 

How can we best get cash payments straight into the hands of those facing the greatest hardship and financial difficulties? It was the growing importance of cash payments and the challenges of disbursement to the most financially excluded that led me to the establish Cash Perks.  

The idea came about when we were helping design an emergency food and fuel scheme for one of the country’s largest housing associations. We quickly recognised the limitations of other payment options to get support immediately to those that need. How do you get funds to the family that can’t feed their children, or put the heating on that night, the person fleeing domestic violence or where someone doesn’t have a bank account or is overdrawn. There was nothing out there that could address these issues so we went out and created a solution. 

Our innovative payment facility enables local authorities to securely send payments of between £10 and £500 to their beneficiaries via SMS texts. Recipients then use the credentials within their message to instantly collect their allocated funds 24/7 at over 17,000 ATMs nationally – all without the need for a bank card or the need to download anything from the internet. 

We only launched in June 2020, but already have several local authorities using our payment solution to disburse thousands of cash payments. One local authority that has already embraced our facility is the London Borough of Barking and Dagenham, which originally piloted it to send hardship payments for those without bank accounts. But following its success, Barking and Dagenham has just used it to disburse almost £250,000 of its Covid Winter Grant Scheme allocation. “It’s really straight forward and its fast efficient flexible system that supports us to implement new government initiatives that are frequently announced,” explains Donna Radley, Head of Benefits. The Council’s Children’s Services directorate has now adopted it to replace the petty-cash payments its social workers make to clients. 

The impact on people has proved really positive and is captured through feedback surveys that are sent when someone collects their funds at their local ATM. Anthony, one of the recipients of Barking and Dagenham Council’s funding explained the difference the emergency cash payments had made, “This has literally saved my life. I have had such a bad couple of years and this went some way to helping me eat properly and getting myself back to myself after the death of my son in 2019 and losing my job and then lockdown. I can’t thank you enough.” While Kareen explained “Great help being in furlough. This aid helped me pay for some of the bills I had occurred and helped me to feed my children. I appreciate the help very much and would like to say a big thank you.” 

You can find more information about Cash Perks at www.cashperks.co.uk or get in touch gareth@cashperks.co.uk

We are also running a series of online demo sessions to see how our it works in practice as well as hearing from London Borough of Barking and Dagenham about how it is working for them.

Wednesday 07 July (9.30am-10.30am) - https://lnkd.in/gsbs8xa .

Monday 19 July (12.00pm-1.00pm) - https://lnkd.in/gR_SRbg 

[1] The Cost of Learning in Lockdown, CPAG (2020)

[2] Is food the right response to child hunger? CPAG (2020)

[3] Cash first’ – Responding to the needs of low-income residents, Greater Manchester Poverty Action (2020)  

[4] https://www.bloomberg.com/opinion/articles/2021-03-09/covid-relief-cash-may-be-the-welfare-of-the-future

[5] Good Practice Guide: Delivering Financial Hardship Support Schemes, Local Government Association (2020)

[6] Local welfare provision, National Audit Office (2016)

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