Household Support Fund

Paul Maynard Excerpts

Tuesday 1st March 2022 Westminster Hall

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

I beg to move,

That this House has considered the household support fund.

It is a pleasure to serve under your chairmanship, Sir Edward, and a pleasure to speak about what is one of the Government’s better-kept secrets: the household support fund. I thank the Minister for his time today—I am sure that he has better things to do than listen to me. I also thank the Trussell Trust and StepChange for their assistance in advance of the debate.

In US presidential elections, there is a phenomenon called the October surprise, when something occurs that transforms the election in an unprecedented way. Well, we had our own October surprise last year, when the Chancellor announced a £500 million household support fund, to be spent between 6 October last year and the end of March this year. However, it seems to be the Government support package that dare not speak its name, so rarely do I see it referred to in the media. Voluntary sector organisations in Blackpool have simply not heard of it, despite it offering some £1.7 million to households in need across the town, which has some of the most deprived communities in the country. I therefore very much want to talk about it. That is not because I am going to demand that the Chancellor spend £500 million every year—year in, year out—but because I want the Department for Work and Pensions to learn from the experience of the fund, and the previous temporary covid grant schemes, to better target existing crisis funding.

The Government have invested nearly £1 billion in this type of support in the last two years. It is now time to enable local authorities to plan for the long term and put in place strategies that can implement best practice around co-ordination. Specifically, the Government should review the Welfare Reform Act 2012, which localised significant welfare powers, including the delivery of council tax reduction schemes, discretionary housing payments and so on. A review one decade on, alongside a consideration of interventions during the pandemic, would allow for a proper consideration of how best to deliver crisis support in the future. We have to take the lessons from the household support fund and apply them to existing Government schemes, so that they work better, avoid duplication and empower local government to be a more effective delivery vehicle. Central Government will always pick up the tab if a local government response does not meet need.

However, although crisis support is delivered locally, too often it is not part of the local authority’s wider support network, which can boost incomes and prevent crises from happening in the first place. For example, someone who needs support with their housing might not be referred further to the local welfare assistance scheme in their area, as it might be located in a different department in the council. The provision of cash crisis support not only benefits the recipient but helps to prevent higher-cost interventions further down the line. Milton Keynes Council used a New Economy unit cost database to estimate the cost savings to other public services from its own local welfare scheme. It estimated that, over a full year, awards made by the authority worth £500,000 led to a total estimated combined saving for central Government and local government of almost £10 million.

We know that in the weeks and months to come we will see people struggle with energy costs, increasing inflation in food basics in the supermarkets—as the campaigner Jack Monroe has discovered—and other higher costs across the entire household budget. The need for this type of support is not going to dissipate. We have to maximise the effectiveness of what the Government already spend. The Government have a duty to focus on preventing destitution in the coming months. Many people have had an adverse life experience in the previous 12 months, such as becoming homeless, becoming sick or disabled, or facing a bereavement. Those experiences interact with the existence and persistence of poverty in our communities, and can tip people further into destitution. In those situations, locally run services have a vital role to play, from providing support with rental arrears to delivering cash-first support to people who are facing immediate financial shortfall.

We know that local policy interventions can make an important difference, preventing a short-term shock from turning into a long-term problem. However, local support is often not joined up effectively, with a lack of targeting and communication, and poor links between statutory and voluntary sector services. For example, someone who needs support with their housing might not be referred further. In some areas, local welfare assistance will not even exist.

Indeed, there is evidence that third sector delivery can be more effective than that provided by councils. The North East Child Poverty Commission’s recent report on local welfare assistance schemes highlighted Darlington Borough Council, and said

“it is felt the delivery of the service by Citizens Advice has been ‘much more effective in identifying and addressing the underlying reasons for people’s financial crises’”

than the council support.

Time and again, when I speak to third sector providers of emergency support, I hear how the slowness of the local government response through existing funds means that the charity uses its own funds to meet crisis needs, because the recipients simply cannot wait, when the state is already providing local government with the money to do just that. This seems wholly counter-productive to me.

The housing support fund has been a chance to fix this disjointed approach, but it is critical that the evaluation of how to reform both this scheme and existing schemes begins now. There was meant to have been a review of two previous covid grant schemes, announced back in February 2021, when I first introduced a ten-minute rule Bill to reform the local welfare assistance scheme. Can the Minister update me on the progress of that review? Is it complete? When will it be published?

The household support fund and local welfare assistance schemes are the safety net that exists beneath the safety net, but there have long been concerns about both the adequacy and, more importantly, the efficiency and coverage of local welfare assistance schemes. The household support fund is a chance to correct that.

One might think it too soon to publish a review on the household support fund when money will still be being disbursed in voucher form well into April. Yet we also know that an interim management information return was required by 21 January 2022 for spend between 6 October 2021 and 31 December 2021. This was presumably to make an assessment of progress so far, so I hope the Minister might be able to say a little more than some might anticipate by telling everybody how the fund has performed so far; otherwise, why collect the information?

I have some specific queries about how the Department for Work and Pensions intends to learn from this fund. What metrics will the household support fund be evaluated against? What would success for the fund look like? When it was announced, the fund pledged that

“everyone should be able to afford the essentials.”

Does the Minister agree that this is still the purpose of the fund? If so, how will he assess whether it has met this objective, which was set by the Chancellor? Indeed, how would he define “essentials”? It is a nebulous term. Do the Government intend to map how the household support fund has been delivered by each local authority and make that information publicly available?

One significant problem, pre pandemic, was the unwillingness of some councils to even operate a local welfare assistance scheme. The Government provided some £167 million to local authorities for these schemes. I know that was not ringfenced, but it was provided as a visible funding line. However, recent research by Liverpool-based charity End Furniture Poverty found that increasing numbers of upper-tier local authorities no longer run local welfare assistance schemes. This has got worse during the pandemic and there are now 32 such authorities, up from 23 in 2019, including authorities the size of Hampshire, Nottinghamshire, Nottingham, Stoke, Staffordshire and Wolverhampton. Many other councils spend less than 10% of what was allocated to them, and few operate the full wraparound service that represents best practice.

Research by End Furniture Poverty shows the situation has become worse during covid, despite funding for local welfare doubling, with money diverted to increasing free school meal provision, for example, despite a separate Government revenue stream precisely to fund that. Can the Minister answer these questions? Based on the interim management information I know he has available, how many local authorities have used the household support fund to improve and cross-subsidise their own local welfare assistance schemes?

In extreme cases, local authorities with limited capacity to deliver and spend this funding instead provided blanket grants to voluntary sector organisations, including food banks. The Trussell Trust itself thinks it is questionable whether this is an effective or intended use of Government funding, and that that risks entrenching emergency food aid as part of the local welfare system. What assessment has the Minister made of how much funding the voluntary and community sector has received through the household support fund?

The guidance for the fund lists a range of groups beyond just food banks, including GPs and schools. Will the Minister commit to publishing data on which third-sector groups the money has gone to, segmenting it by category, so that we can better understand best practice and different delivery models? Does he believe that local authority funding of food banks is an effective use of public funds? On what basis is that assessment being made? Do returns show that more or less was spent in the period to December? What impact will that have on the guidance that all moneys must be spent by the end of March? More fundamentally, given all the data now available, will the Government commit, as per my previous ten-minute rule Bill, to a review of all local support, including the household support fund, local welfare assistance schemes, discretionary housing payments and council tax support?

The North East Child Poverty Commission’s report, which I referred to earlier, details the tangled web of potential support across the north-east that many people would argue needs rationalising. I quote from the report as an example, not because I know the north-east particularly well. The commission writes:

“accessing the Gregg’s Foundation Hardship Fund; utilising stocks of second-hand furniture and white goods stored by some councils; providing support via Section 17 of the Children’s Act 1989; the use of Discretionary Housing Payments, Council Tax Support and Section 13a discretionary Council Tax reductions; accessing assistance from social housing providers; using ward member budgets; referring into Warm Homes teams; in the case of one authority, using a pot of funding bequeathed to them by a resident for local people facing financial hardship.”

So many pots, and so little co-ordination. I could easily add universal credit crisis loans, given how many are effectively written off; the availability of upcycling in the community these days; the British Heart Foundation furniture charity shops that I see across the north-west; domestic violence charities using public grants to provide emergency packages; council-funded food banks; and individual schools in my constituency topping up pupils’ prepayment meters. The list of publicly funded sources of short-term financial help is endless, but they can actually start to cancel each other out. All this public funding needs bringing together under one branded title that people know exists, with minimum standards of provision set out in statutory guidance. There should not be a differently named project in each council, with different criteria, different application processes and different types of assistance.

I should explain some salient background points to the Minister, whose predecessor, the hon. Member for Colchester (Will Quince), bore the brunt of my obsession with this topic. Low-income families have an average of only £95 in savings, and some 40% of those aged 20 to 29 have no savings at all. These sorts of situations reinforce what is called the poverty premium—a term that I heartily dislike—which is increasingly prevalent. For example, if someone has no cooker, it may mean that they spend more on costly takeaway meals, if they are time-poor. Having no washing machine might mean someone paying £4 down the launderette, and £3 for the dryer, rather than 25p for the average home wash. Local welfare assistance schemes offer timely support, but there should be a wider challenge to policy makers to find ways to incentivise small or even tiny amounts of savings, to improve financial resilience over time.

From professional bodies such as Perennial, which cares for those in the horticulture sector, to religious groups such as St Vincent de Paul or Quaker Social Action, there are myriad charitable providers out there. The Association of Charitable Organisations counts some 800 providing practical support alone. The overlapping tapestry of voluntary support is a credit to our nation’s sense of collective endeavour, but together these organisations can achieve so much more as part of a wrap-around, best practice model that reduces longer-term costs for councils and social housing providers. In discussions with them, however, I hear time and again that they do not know about local government schemes, or that they are too time-consuming or difficult to access. Speed matters, so they deploy their own funds, which might otherwise go on things that the Government already make provision for, but that councils do not always use for that purpose.

There are exceptional private sector providers out there that connect individuals in need of help with funding bodies. Charis Grants and Family Fund Business Services are just two examples of organisations that provide platforms through which public bodies can access goods and supply them to those in need. Pin4 Cash and Cash Perks can immediately deliver a “cash first” solution straight to those needing help. Why are these providers not playing a more salient role in how the Government seek to deliver help to the frontline? They offer greater efficiency and the help can be more precisely targeted.

We also welcome Toynbee Hall and Fair4All Finance’s piloting of no interest loans. That is modelled on what Good Shepherd does in Australia, and the pilot was commissioned by the Treasury, which I welcome. I recognise that this needs doing right. Will the Minister assure me that he will personally take an interest these schemes, which should reduce long-term demand for local welfare assistance schemes by creating financial resilience, and which will enable people to access some white goods without being pushed into a poor financial situation?

All of that would mean that what the Government spend would go that much further, and then we would not have the usual debate in this place in which Members, particularly Labour MPs, demand ever larger amounts of new money. How we spend matters as much as how much we spend. The household support fund has been the largest exercise in delivering emergency financial support since world war two. If we do not use this opportunity to ask key questions and reimagine how we provide this support, we are missing a crucial opportunity to bring the financially vulnerable back from the brink of destitution.