Government to give cash payouts to people in financial crisis

People on low incomes around England will be able to access emergency funds for people on low to no incomes. The Crisis and Resilience Fund, which opened in April, will earn £1 billion per year for the next three years. If or not they currently have insurance, people will be able to apply for emergency funds through their local council. According to the latest laws, councils can help people in financial hardship situations where there is

a sudden, unexpected expense, or decrease in income,

such as a broken boiler, the loss of a job, or preventing people from entering a crisis.

It is a replacement for the temporary Household Support Fund, which had been growing on a sliding basis since its inception in 2021, but it was expected to end at the end of March. The amount of funding remains relatively the same as the previous one, leaving several councils angry that there hasn't been more money allocated. According to a recent report by the Local Government Association, the majority of councils in England did not think that the existing funding would be sufficient to satisfy local health needs. The cash component is a major change to the previous scheme, which the government hopes would help fulfill a manifesto pledge to reduce significant reliance on emergency food parcels in the case. It means that councils will have direct access to cash in the hopes of eliminating the need for hand-out provisions. Councils can plan their support services and provision for a longer period of time thanks to the assurance that at least three years of funding exist. Emma Revie, co-chief executive of the Trussell Trust, a charity that helps food banks, said:

The new Crisis and Resilience Fund is a significant step toward ensuring that no one is forced to turn to a food bank to get by.

The funds can be used for three specific areas, including emergency payments, housing loans for those facing an unexpected shortfall, and resilience services for funding the charities and local charities currently providing front-line assistance. The payments could be used to help with redundancy, aiding in the ending of an intimate relationship, or an unexpected bill. There is no agreement on how each local authority should divide their funds among those different uses.

According to Barnardo's charity, changing the way people are supported from vouchers, food bank referrals, and emergency food parcels to cash payments would benefit millions of people who are currently dependent on government and council-funded assistance. Any councils have already been using a cash-first strategy and sell them online or via Pay-By-Text kiosks that enable people to withdraw money from cash machines. According to the charity, those in need should have more control over how and where they want to invest the money.

This report outlines how crisis assistance can be delivered in a way that preserves dignity, provides real choice, and helps those who need it most,

Barnardo's chief executive Lynn Perry said.

It has the ability to make a difference to children who are growing up in poverty.

A proportionate amount of funding will be distributed to Scotland, Wales, and Northern Ireland, but it is up to those authorities to determine how the extra funds will be used. Local authorities in England will have to announce how they are going to use the money and open up applications to the public by 1 April.

Thanks to this £1 billion fund, local authorities will have the confidence to offer emergency assistance and prevent families from falling into poverty in the first place,

Minister of Employment Dame Diana Johnson said.