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Social Justice

The government promised to help with the cost of living. So how far is the household support fund going?

Councillors warn the household support fund is merely a “sticking plaster” and isn’t enough to help people in the cost of living crisis

The government has crowed over its household support fund which it claims is a “lifeline” for vulnerable people. Divided into small payments and given to the country’s most vulnerable households, the grant is intended to “meet daily needs such as food, clothing and utilities”.

But amid rumours of cuts to public spending, councillors have warned it is merely a “sticking plaster” as their constituents struggle through the cost of living crisis, despite the £421 million extension until March 2023. 

“The government is making the same mistake again – one-off pots of money with hard deadlines and no certainty for the future – meaning councils can’t plan for services that deal with the causes of need, not just the symptoms,” Shaun Davies, vice chair of the Local Government Association, said.

There are 14.5 million people living in poverty in the UK, according to the Joseph Rowntree Foundation. If you divide the fund up between them, that’s less than £30 per person over the next six months. That’s not even enough to cover the average household’s weekly food shop.

Luke Farley, a councillor in Leeds, said the household support fund is “clearly insufficient” for people who need it. His ward, Burmantofts and Richmond Hill, is among the most deprived neighbourhoods in the country and residents are being hit hard by the cost of living crisis.

Farley told the Big Issue he hears “heartbreaking stories” as his constituents struggle to cope with soaring bills. “I feel awful because often I’m limited in terms of the help I can offer.”

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Leeds will receive £7.1million of the household support fund. But there are around 175,000 people in Leeds living in poverty after housing costs, according to the Leeds Observatory. That’s only around £40 per person. 

“This isn’t enough to pay for one month’s energy costs, never mind food, transport and housing,” Farley said. He echoed campaigners who argue the government needs to address the high cost of living while also making sure people have enough money going into their pockets.”

Councils are already “on their knees” after more than a decade of public service cuts, councillors claim. Leeds has seen more than £2billion taken out of council budgets since 2010, according to the council.

“We need the government to take decisive interventionist action to support people – not just the poorest, but those on middle incomes too who are going to be hit hard by inflation and rises in the interest rates,” Farley added. “Regrettably, with this Conservative government, I believe we can only expect further suffering and a continuation of the race to the bottom.”

The chancellor has remained tight-lipped over how huge tax cuts will be funded. Meanwhile, the Institute for Fiscal Studies has warned “painful” spending cuts of around £60 billion a year will be needed by 2026/2027 if the government is going to meet its targets for economic growth.

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Liz Truss told parliament on Tuesday that no further cuts to public spending will be made – but it is still unclear how the government will fund its tax cuts. 

Councillor Saima Ashraf, based in Barking and Dagenham, one of the most deprived communities in the country, said: “I’ve been making cuts every year because the government is not funding us. We’re on our knees.”

Local authority spending power fell by 16 per cent between 2010 and 2020, according to the Institute for Government. Central government grants were cut by £15 billion – from £41 billion to £26 billion – over the decade. In real terms, that’s a cut of 37 per cent. 

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Speaking about the extension to the household support fund, she added: “Will that help? Yes, of course. Any help is welcome. But we need more than this.”

Davies, who is also council leader for Telford and Wrekin, agreed. He led a petition calling on the government to at least double the funding available over the winter from £500 million to £1 billion. It has been signed by more than 1,000 councillors and 70 Labour council leaders. 

The household support fund is one-off and, while it continues to be extended, there is no long-term certainty. “Councils aren’t able to use the funding to address the root causes,” Davies said. “We’re often just dealing with the symptoms.” 

He explained his constituents in Telford and Wrekin are being hit hard by the cost of living crisis. “We’re seeing people that we’ve never seen before asking for support,” said. “It’s devastating. So people are literally going into the shop for food and having to count every item they put into their shopping basket. Families have literally stopped eating to buy school uniforms for their children.

“As we go into winter, many families can’t afford to buy winter coats, but they’re scared to put their heating on in their home too. It’s a lethal cocktail.”

When contacted by the Big Issue, a government spokesperson said two-thirds of the allocated funding is for families with children. Councils – which know their areas best – can direct the funds to the most vulnerable as they see fit. The final third of the funding is reserved for pensioners. 

“The fund has already been extended to the end of March 2023 after receiving another £842 million in funding through two extensions,” they added. The spokesperson also referenced the energy price guarantee, which they claim will save households an average of £1,000 a year. But energy bills are still double what they were earlier this year. 

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With the household support fund, Telford and Wrekin Council have been able to provide cash to every family with a child on pupil premium, buy winter coats for children, provide vouchers for pensioners on pension credit and create a hardship fund to further support vulnerable people. 

“We really welcome the fund,” Davies added. “It’s something we think the government has got right. We just need certainty over how long we have got it for and an increase in it to reflect the rising demand.”

The government is providing a £1,200 support package to people on the lowest incomes. But, as Davies pointed out, the government slashed the £20 uplift to universal credit this time last year, and now ministers are refusing to confirm whether benefits will be uprated in line with inflation in April. 

A U-turn on this promise would mean a real-terms cut to benefits and would be a “devastating blow” for low income families already struggling through the cost of living crisis. 

“The national welfare system should provide that universal safety net,” Davies said. “Then funds like this help local authorities pick up extreme or unexpected hardship. What I can say is that this funding is effectively making up for the fact that the benefit system is not generous enough.”

He added: “We all know that the cost of living is going to get worse and not better over the next couple of years. The government must move away from sticking plasters to long-term funding which allows councils to support their communities.”

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