Overall spending on discretionary local welfare support to help some of the poorest and most vulnerable people is declining, according to a report by the National Audit Office (NAO).
The Department of Work and Pensions (DWP) provided funding of £347 million to local authorities for discretionary local welfare support between 2013-14 and 2014-15.
However, the NAO found that four out of five councils did not spend all the funding they were given, while one in four did not expect to spend their full grant in 2014-15.
Discretionary local welfare support is given to people in financial crisis to help with the cost of food, heating, clothing and essential household items.
The NAO says “councils had acted cautiously in designing local welfare support, as they were concerned about high demand and uncertain about funding after 2014-15”.
Low-income households in need of local welfare support were initially met with strict and restrictive eligibility requirements, after the UK Government abolished crisis loans and community care grants in 2013 – handing responsibility for emergency welfare to devolved administrations and local authorities.
Councils admit they had underspent in 2013-14 to help fund local welfare provision in 2014-15, mainly due to uncertainty over future funding from central Government, but many still say they cannot afford to continue providing an adequate local welfare safety net without “specific” Government funding.
The NAO says that with reduced funding and other financial pressures faced by councils the future of local welfare provision is “uncertain”, with some local authorities already cancelling the provision they first provided in 2013.
Meanwhile, charities have reported increased demand for support in areas where councils have stopped or reduced spending.
The NAO’s report found that despite the DWP taking steps to help councils in building and developing local welfare provision, councils said the help they had received was of a “limited value”.
The report calls for “better co-ordination between national and local forms of welfare support”. Councils report that significant numbers of people applying for local welfare provision are experiencing hardship due to welfare changes – notably benefit sanctions.
Amyas Morse, head of the National Audit Office, said: “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.”