Replacement of social fund threatens 'safety net' for people in financial crisis

Bishop Terrence Brain, chair of the Caritas Social Action Network (CSAN) and the Archbishop of York, Dr John Sentamu, have joined forces with The Children’s Society, to warn that some of the country’s poorest families could struggle further after changes were made to a Government fund for people in financial crisis.

A new report by The Children’s Society, Nowhere to Turn? Changes to Emergency Support, claims that money given to local authorities to replace the Department for Work and Pension’s (DWP) Social Fund has almost been halved compared to equivalent spending since 2010.

It has also found that almost two-thirds (62%) of local authorities are no longer providing interest-free emergency loans through their replacement schemes. The charity fears this could drive vulnerable families deeper into debt, as they are forced to turn to loan sharks and high cost money lenders.

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In April this year, Community Care Grants (non-repayable grants to help people leaving care settle into the community) and Crisis Loans (for immediate short-term needs, such as food), were replaced with Local Welfare Assistance Schemes.

Bishop Brain said: “We are witnessing increasing numbers of families struggling with substantive changes to the benefit system. It is now more important than ever that a robust safety net exists for people in crisis. Today’s findings from The Children’s Society raise real concerns that families in need of emergency support will be forced to turn to payday loans and other high interest lenders.”

The Children’s Society is also concerned that a postcode lottery, where the level of support a family gets depends on where they live, is beginning to emerge.

The Archbishop of York, Dr John Sentamu, said: “As this report shows, some local authorities are putting emergency support beyond the reach of many vulnerable families. It is more important than ever to ensure the safety net that Crisis Loans provide to families in need, remains in place across the country. As a civilised society, we have a duty to help those most in need. We must never turn our backs on them.”

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