Since 2013, central and local government have reduced overall spending on discretionary support to help people meet urgent needs for food, heating, clothing and essential household items, according to today’s report from the National Audit Office.

The Department for Work & Pensions paid grant funding of £347 million to single-tier and county councils for 2013-14 and 2014-15 to provide local welfare provision after the government abolished crisis loans and community care grants. Four-fifths of councils did not spend all the funding they were given on local welfare provision in 2013-14, and one quarter did not expect to spend it all in 2014-15. The Department also spent less on the discretionary advances and loans it continued to provide after April 2013.

The NAO finds that councils had acted cautiously in designing local welfare support, as they were concerned about high demand and uncertain about funding after 2014-15. Local taxpayers and other stakeholders, however, can challenge councils to explain their decisions.

Councils that the NAO spoke to had initially set restrictive eligibility criteria and limited public awareness of the support available. These councils said they were now using underspends to help fund provision in 2015-16 when a reduced amount of funding is included in their revenue support grant from central government.

The future of local welfare provision appears uncertain. With reducing resources and competing pressures, many councils say they cannot afford to continue offering this support without specific government funding. The NAO finds that some councils have already stopped or reduced the provision they introduced in April 2013.

Charities reported an increasing demand for their support in areas where local welfare provision had reduced, and were concerned they may not be able to meet additional demand if local welfare provision ceases. It remains to be seen how councils will respond to the government’s proposed continuation of funding for local welfare provision in the provisional local government finance settlement for 2016-17.

Today’s report finds that the Department took steps to help councils develop local welfare provision, although councils said its help was of limited value.

Councils provide different types and levels of support but there is no widespread benchmarking to help improve cost-effectiveness. Councils commonly provide support in the form of furniture and white goods, food vouchers and fuel-card top-ups, with only 24% offering cash support. Councils reported that the shift from cash to goods reduced the scope for fraud and targeted people’s needs better, but it also discouraged some people from applying for support.

The NAO finds that councils either do not collect information on applicants and their needs, or if they do, they make limited use of the information. Councils have a limited understanding of the effectiveness of their spending on local welfare provision or the consequences of reducing their provision.

The report also highlights the need for better co-ordination between national and local forms of welfare support. Councils reported that a significant proportion of the applications they received for local welfare provision were from people facing hardship as they switched between different types of benefits, experienced benefit delays or sanctions, or moved from benefits to work. Ineffective coordination also risked undermining the achievement of the government’s welfare policy objectives, for example, when council-provided support weakened the intended effect of benefit sanctions.

“Councils provide discretionary local welfare support, but increasing numbers are stopping doing so, and less is being spent overall now than in 2013. The consequences of creating this gap in provision are not understood, either in terms of impact on vulnerable people or of creating potentially costly additional care or medical needs in the longer term.”

Amyas Morse, head of the National Audit Office

Read the full report

Local welfare provision

Notes for editors

151 Single-tier and county councils in England given funding for local welfare provision £347m Funding to councils for 2013-14 and 2014-15, including administration funding – from 2015-16 funding is included in the revenue support grant. 78% Proportion of councils that reported spending less than the funding they received in 2013-14 due to a range of factors £177 Million The Department for Work & Pensions’ spending on crisis loans and community care grants in 2012-13 £4.82 The average funding the Department for Work & Pensions gave to councils per working-age adult in 2013-14 £2.40 The average amount councils spent per working-age adult in 2013-14 24% The proportion of councils reporting they would not spend all the funding provided to them in 2014-15 73% The proportion of councils offering help in the form of furniture and white goods 68% The proportion of councils offering food support 1. Until April 2013 the government provided crisis loans and community care grants as part of its discretionary Social Fund. From April 2013, as a result of provisions in the Welfare Reform Act 2012, the Social Fund was abolished. For 2013-14 and 2014-15 the Department for Work & Pensions provided transitional grant funding to single-tier and county councils in England to provide local forms of welfare support. The government placed no new duties on councils to deliver local welfare provision and did not place any monitoring requirements on councils, but it did expect them to provide ‘flexible help to those in genuine need’. 2. For 2013-14, the Department gave each council a share of the total funding available proportionate to the spending that would have occurred on crisis loans and community care grants in its area from April to September 2011. As a result, councils serving the most-deprived areas received more than three times as much funding per working-age adult, on average, as councils serving the least-deprived areas. 3. The Department for Work & Pensions spent less on discretionary financial support after April 2013. The Department’s spending on short term benefits advances in 2013-14 was 91% lower than its spending on crisis loans for alignment in 2012-13; £4 million compared with £40 million. The Department’s spending on budgeting loans, another form of discretionary support for people receiving benefits, was 5% lower in 2013-14 than in 2012-13; £345 million compared with £362 million. 4. From 2015-16 funding for local welfare provision in England is included in Councils’ revenue support grant, provided by government. 5. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website. 6. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 810 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of £1.15 billion in 2014.

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