More than a quarter of the £800m allocated by government for discretionary housing payments since 2015 has been spent on supporting families hit by the benefits cap, figures from the Local Government Association suggest.
The LGA said the proportion of funding used was “significantly higher” in many areas and showed that the funding was increasingly being used to make up systemic shortfalls, rather than the one-off support for which it is intended.
The association is calling on the government to consider and fully fund councils’ role in supporting low income families in the forthcoming spending review and better evaluate how local financial support can reduce the demand for other high-cost public services.
It has published a report, ‘Reshaping Financial Support’, which looks at how ten councils are working with low-income households.
Richard Watts (Lab), chair of the LGA’s resources board, said: “The reasons households get into debt or financial difficulty can be complex. Debt is often a symptom of wider problems, as well as a cause. Councils need the resources and capacity to disentangle and address complex issues, focus on prevention and bring services together.
“Unless local support is effective there is a risk that we entrench poverty and its associated problems.
“It is vital that the government’s forthcoming spending review recognises the importance of local support to achieving its wider aims in reforming the welfare system and improving outcomes for low-income households.”