Thousand of people could be made homeless if government funding for local welfare schemes is removed, warns the Local Government Association (LGA).
New research from the LGA reveals that local welfare assistance schemes have helped a staggering 94,000 people at risk of becoming or remaining homeless.
Councils say the Government’s £172 million annual funding for these schemes provides ‘vital support’ to families at risk of losing their homes. Removal of the funding would mean crucial support may no longer be available to tens of thousands of people.
Over a quarter of local welfare spending was used to help people facing potential homelessness in 2013/14.
If councils are forced to reduce the amount they spend on local welfare schemes, due to Government funding cuts, an estimated 50,000 people would be at increased risk of life on the streets.
The Government’s decision to end funding for local welfare ‘safety net’ schemes in April would be an ‘expensive mistake’ and cost taxpayers hundreds of millions of pounds, warns the LGA.
LGA analysis shows that for every £1 spent on local welfare, more than £2 is saved by helping people avoid becoming homeless. According to the LGA, providing accommodation to those at increased risk of homelessness would cost taxpayers an additional £380 million per year.
Local welfare schemes were introduced in 2013 to replace crisis loans and community care grants. The LGA says the schemes have offered a helping hand to hundreds of thousands of people facing crisis or entering a time of transition. This includes people at risk of becoming homeless, providing food to struggling families and helping care leavers find accommodation for the very first time.
Crisis support and community grants have been funded by central Government since 1987. The final decision of whether or not to scrap funding in 2015/16 will be made by Government ministers next month.
Council leaders and charities are urging the Government to reconsider the decision to terminate funding for local welfare assistance schemes.
Local authorities have already seen their overall funding slashed by 40% since 2010 and argue they would unable subsidise local welfare support.
Cllr David Sparks, Chair of the LGA, said: “Local welfare funding has been used by councils to provide crucial support to people facing personal crises in their lives and prevent problems from escalating.
“This money has helped keep a roof over the heads of thousands of people facing the threat of losing their homes. In doing so it has also saved the public purse many millions more which would have to have been spent finding new homes for people who lose their own.
“Government’s decision to withdraw this funding is an expensive mistake which will not only lead to a reduction in support for those who need it most, it will also cost taxpayers millions more in the long run.
“Local safety net schemes have been funded by government for almost 30 years. At a time when councils are tackling the biggest cuts in living memory, many local areas simply cannot afford to keep these schemes going if government withdraws the funding.
“Government should not renege from its responsibility to those in most need. It needs to review this decision and fully fund local welfare.”
Jon Sparkes, Chief Executive of the housing charity Crisis, said:
“For people facing or trying to escape homelessness, Local Welfare Assistance can be the final safety net – a small amount of money that makes a huge difference at a time of crisis.
“Today’s report clearly shows the damage that will be done if this funding is cut. On top of the human cost of homelessness, it makes absolutely no economic sense.
“Homelessness shatters lives and it is hugely expensive for the state to pick up the pieces. We stand alongside the LGA and others in urging the Government to rethink its decision to cut this vital lifeline.”