Introduction

In the Autumn of 2024, the Chancellor announced a year-long extension to the semi-permanent Household Support Fund (HSF) in England from March 2025. For years, local authorities have endured last-minute updates on whether this vital funding pot will be continued. Hearing the news well ahead of time was very welcome but nothing changes the fact that against a backdrop of sky-high poverty levels, which are set to worsen as new, devastating cuts come into place, this commitment equated to a drop in the ocean.

It’s fundamental that every element of the social security system should be fit for purpose, including the availability of crisis support in every local authority across the UK. It’s clear that HSF funding must be continued and adapted to become exactly that – local crisis support in every area. A decade after the Discretionary Social Fund’s abolition, crisis support via direct cash payments is still available in Scotland, Wales and Northern Ireland through nationally-developed replacement schemes. However, in England, an uneven patchwork of local crisis support has emerged. 36 local authorities offer no Local Welfare Assistance Scheme (LWAS) at all, and many schemes that do exist do not distribute cash payments. 65% of LWAS budgets in 2023/24 came from HSF. Clearly, without the HSF or something to replace it many will be left without access to vital lifelines. In 2024, Citizens Advice advised over 83,000 people in England on localised social welfare, 14% more than in 2023, and 95% more than in 2022, also demonstrating the need for LWAS.

This blog focuses on the Save Our Local Safety net inquiry[1] and some of the recommendations from the subsequent report, Shaping the Future of Local Welfare and Crisis Support in England. The Independent Food Aid Network (IFAN) and the other organisations involved in the campaign, want to use the report to inform the design and delivery of a potential new Crisis Resilience Fund that could replace HSF in March 2026. Here, we will look specifically at the recommendations that all schemes be delivered primarily in cash, the importance of integrating the programme into a wider network of advice services, and how crisis support fits into the wider social security system.

Crisis support needs to be in cash

Any new Crisis and Resilience Fund should prioritise taking a cash first or income-focused approach to its distribution. Due to local authority discretion on how HSF is allocated, emergency cash payments are not available in every local authority in England. In 2023/24 only 21% of the total funding was allocated to the provision of direct cash payments, and as many as 40 local authorities allocated none of their portion of HSF to cash payment distribution. The responses to the Save Our Local Safety Net inquiry consistently emphasised the importance of taking a cash first approach, a perspective that was strongly held among individuals with lived experience of financial hardship, where financial support was preferred to other types of help. Thus, prioritising a cash first approach is a key recommendation in the inquiry’s report.

There is plenty of evidence that a cash first approach works. According to the Department for Work and Pensions (DWP) Family Resources Survey, the £20 uplift resulted in a 16% reduction in severe and moderate food insecurity in households on Universal Credit. Cash payments represent a more dignified and flexible form of support than others and meets certain needs that cannot be accommodated by vouchers. Cash is effective at relieving crises quickly and it is uniquely placed to help people take steps towards financial resilience, by allowing people to pay off debt or accumulate savings, for example. Vouchers are not able to help in this way, and they can also be more restrictive than cash. One respondent to the inquiry, a person with lived experience of accessing crisis support, reported that only vouchers are available in their area, and they are not always accepted by the shop the person uses. This problem would not exist if all schemes were distributed via direct payments. It is imperative that a permanent system of crisis support uses cash in the first instance while retaining some flexibility to suit individual needs. For example, if furniture or appliances are preferred to cash this should be considered, alongside a rounded package of support.

The role of advice services in crisis support

Coordinating crisis support in cash with wider advice and support is essential. This ensures someone’s immediate financial crisis can be dealt with while they receive further support to reduce the potential for repeated crises occurring. Policy in Practice has found that the total amount of unclaimed income-related benefits and social tariffs is now £22.7 billion a year, so it's vital that people receive support to claim that to which they’re entitled. IFAN’s ‘Worrying About Money?’ resources project aims to bridge this gap in knowledge with straightforward, step-by-step guides both for people facing money worries and support workers. They identify which local agencies are best placed to help people maximise income and access any existing financial entitlements. This can help to address the underlying financial problem, allowing people to build resilience against future financial shocks reoccurring.

Responses to the inquiry emphasised the importance of integrating crisis support with advice services, with the report recommending this as a critical feature of a future Crisis and Resilience Fund. These advice services also need urgent investment, as the recent cost of living pressures have left them at breaking point. This is set to worsen as people seek help in greater numbers following the devastating cuts to disability payments. The cuts are projected to hit 700,000 people already in poverty, according to internal DWP forecasts. This in addition to the 250,000 people that the Office for Budget Responsibility predict will be newly driven into poverty. Connecting people with the right support at the right time can prevent someone from being forced to turn to charitable food aid, so strengthening this support needs to be a priority.

The role of crisis support in a wider social security system

The above recommendations for improving crisis support cannot bear the burden that the national safety net is failing to manage. Fundamentally, social security payments and wages need to be sufficient in the first place, and the more punitive features of the benefits system should be abolished, including the two-child limit, benefit cap, the sanctions system and No Recourse to Public Funds Status. An inadequate social security system, low wages and insecure work, and the rising cost of living are all combining to lock people in poverty. Over 9.3 million people are currently facing hunger and hardship in the UK. The Shaping the Future of Local Welfare report has reiterated that local crisis support is not intended to act as the primary safety net. It should be a temporary measure that can help people through one-off costs, emergencies, and unexpected income shocks. It can then connect people to wider advice and support. Local authority support shouldn’t exist to cover gaps in centrally run provision, but unfortunately this continues to be the case. Urgent work needs to be done by the Government so that local authority crisis support is embedded within a fit-for-purpose social security system that should ensure adequacy of income for all, including those with No Recourse to Public Fund status (NRPF). Only then can we reduce the unsustainable pressure on charitable food aid.

Conclusion

The recommendations of the Shaping the Future of Local Welfare and Crisis Support in England are clear. It’s critical that crisis support is rebuilt so it can help people through the kinds of one-off shocks that may force someone to turn to charitable food aid. A future Crisis and Resilience Fund should take a cash first approach to give people the dignity, flexibility and resilience that other forms of support cannot – such as food parcels and vouchers. There also needs to be some individual discretion about the form of wraparound support someone receives. A permanent Crisis and Resilience Fund being available in England would give parity with the other three nations in the UK and ensure anyone in crisis can access support when they need it. We need to take the learnings from the devolved nations and set up our own central crisis fund that is administered in cash. Giving wider support alongside cash payments is vital to reduce repeated crises, and for this we need a bolstered advice sector. Urgent investment is needed in the sector to ensure people receive critical support to maximise income or access any existing financial entitlements alongside their emergency payment. Crucially, a Crisis and Resilience Fund cannot pick up the pieces of a failing wider safety net to have any hope of ending the need for charitable food aid and ensuring everyone can access a Living Income.

[1] The Save Our Local Safety Net inquiry ran from 9 Oct until 14 Nov 2024 and gathered responses from a range of stakeholders, including local authorities, VCS organisations, and individuals with lived experience to a series of questions about the future of local welfare and crisis support. A total of 72 responses were received www.childrenssociety.org.uk/what-we-do/our-campaigns/save-our-local-safety-net/future-of-local-welfare-inquiry