Many local authorities are worried about a looming shortage of money for local schemes replacing Social Fund provision, according to campaigners.

The Social Fund currently helps people with needs that are difficult to meet from regular income. It provides maternity, funeral, cold weather and winter fuel payments; and a discretionary element covers community care needs, budgeting loans and crisis loans. From April 2013 key parts of the scheme will be replaced by new local arrangements, delivered by upper-tier local authorities in England and by the Scottish and Welsh Governments. Money for local schemes will not be ring-fenced.

The Child Poverty Action Group (CPAG) has analysed a sample of 12 local authorities. They found an average cut in funding for replacement local schemes of 13.9 per cent between 2011/12 and 2013/14, rising to 15.6 per cent in 2014/15. Although local authorities will receive around 20 per cent on top for administration, many are worried this will not cover the costs of developing and implementing an entirely new scheme by April 2013. Some feel they will need to dip into programme funding during the first year.

CPAG points out that Social Fund reform is happening against a background of benefit cuts and pressure on household incomes. It will also coincide with a major overhaul of the social security system: if the transition to the universal credit is not completely smooth, and if computer glitches or delays occur, families may need to turn to localised Social Fund schemes to tide them over.

Source: The Social Fund at a Local Level: Notes for and from Practitioners, Child Poverty Action Group
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