Support for long-term strategies for local welfare is gaining momentum when the government renews the crisis support until 2026.
In the Budget, the Chancellor announced an extra £1bn for the Household Support Fund (HSF), alongside discretionary housing payments, for 2025-26.
The exact allocation for the HSF itself is still unconfirmed – raised concerns from some voices in local governmentnt about an obvious reduction in the amount.
But Peter Marland (Lab), chairman of the Local Government Association’s (LGA) finance and resources board, said the extension of the HSF was “really welcome news”.
Cllr Marland said providing the funding for another year gives councils “some certainty” and “allows for some more long-term planning”.
But he added that the LGA’s “main aim” is “a long-term fund” to “support people and make sure… we can help people before they fall into crisis, as opposed to what many of the HSFs are doing at the moment, which obviously is to support people in crisis”.
Cllr Marland said the HSF extension is “absolutely welcome, but it is supporting people through a cost of living crisis, as opposed to tackling … fundamental issues such as higher paid work (and) the ability to get people off benefits and into work – especially people who have longer sickness benefits”.
“Hopefully the government can work with local authorities to put in place support that takes people out of crisis and doesn’t need short-term support,” he added – saying the current arrangements risk “putting money directly into the pockets of, for example, energy companies or loan company”.
Cllr Marland said the nature of this funding was a “conversation that we need to have with the government, with our directly elected mayors, with our partners”.
Pointing out that the new HSF allocation brings the total since its introduction in 2021 to “somewhere close to £5 billion”, Cllr Marland said: “That’s a lot of money, and … we think it could be better spent on supporting people to making sure they don’t end up in crisis in the first place, rather than supporting them in crisis”.
“We really need a smaller pot of money going to that crisis support, and the majority of it is keeping people out of crisis,” he added. “It shifts the balance of spending from crisis to support, but always hopefully has that backstop as well.”
“There will always be a place for crisis support”
Rachael Walker, head of policy and research at Policy in Practice, a social policy software and analytics company, said the way HSF allocations have been announced recently means “extremely short-term plans are the only thing councils can put in place, hopefully with a bit more certainty what applies to financing”.
Ms Walker added that with the latest allocation of funds until March 2026, “they may be able to put long-term programs in place, but regardless of the great news of having an early announcement around the HSF, it’s still not long enough,” arguing that “we need a good five- or 10-year strategy around crisis support”.
“There is not one council in the country that can turn these challenges around six, 12 or 18 months at a time,” she said.
Ms Walker said “there will always be a place for crisis support, whether it’s through something like household support or more certainty around local welfare support”.
“Even if we fix our employment problems, our inequality problems, our poverty problems, all of these issues, there will still be a place for it,” she added.
As well as “long-term funding security”, Walker said she would like to see a “data-driven approach” to allocating the money encouraged, rather than application processes that “add stigma and shame”.
She also added that she would like to see better data collection and management to understand the impact of the fund, saying the approach to date represented a “real loss of an opportunity to understand outcomes”.
The “eat or heat” dilemma
Some councils are now prioritizing older residents for support from the fund, fearing that this group could face a ‘heat or eat’ dilemma following the recent scrapping of the winter fuel payment from people not receiving means-tested benefits.
Denise Gaines (Lib Dem), deputy leader of West Berkshire Council, agreed with the LGA’s view that a long-term approach was needed, saying: “We need to look at the whole situation – why are so many people struggling?”
“The people that come to the food bank are people that you wouldn’t imagine having to go to a food bank, let alone having to go regularly,” she said. “So there is something fundamentally wrong with the process at the moment.”
Cllr Gaines said that while it had been challenging to deploy the HSF within the required timeframes, her council was “very fortunate” to have “fantastic voluntary sector partners” helping to quickly identify people in need of support and facilitate distribution.
Cllr Gaines argued that if the HSF goes ahead, she would prefer funding to be allocated for a three-year period, so “we can have time to plan”.
As well as young carers and carers, in its current use of HSF, West Berkshire prioritizes older residents who do not meet the Pension Credit threshold – meaning they are not eligible for the Winter Fuel Supplement following the Government’s decision to limit this to people on means-tested benefits.
This demographic is also a priority for East Cambridgeshire DC. District leader Anna Bailey (Con) said thousands of residents sit just above the poverty line, meaning the cut to winter fuel payments “could easily lead to ‘heat or eat’ dilemmas for older residents.”
A council motion in October said the government’s “cruel decision” to cap fuel payments would put “further burden” on vulnerable pensioners.
“While HSF goes some way to providing help, we believe more should be done to help people on low incomes, particularly the elderly,” Cllr Bailey said.
The council has written to the chancellor asking for a review of the winter fuel payment decision and “asking the government to take urgent action to ensure vulnerable pensioners, particularly those not claiming pension credits, are protected from fuel poverty”
“The cost of living crisis is not going away – more needs to happen and quickly,” said Cllr Bailey.
Bolton MBC leader Nick Peel (Lab) has questioned the long-term sustainability of the HSF. At a cabinet meeting in October, Cllr Peel said: “I worry about the sustainability of the HSF in the long term, I do. It was brought in as an emergency measure in 2021, and the danger is that local authorities will become a replacement for the welfare state to what (Work and the Department of Pensions) provides – and people will miss it if it goes.”
At the time, Cllr Peel added that “we expect that at some stage the Government … will announce alternative ways to support people and help people cope, and save on energy bills, as an example, in the future.”
Read more: Appropriations for household support will decrease from 2025
