Overview
The economic hardship brought about by Covid-19, followed in quick succession by the ongoing cost-of-living crisis, has brought renewed focus on local welfare assistance provided by councils to struggling residents.
Many Londoners are facing financial hardship and the need for a local safety net is likely only to increase for the foreseeable future. London Councils’ recent survey of Londoners found one in four are struggling to manage financially. The capital’s homelessness crisis also remains severe, with London Councils estimating that 162,000 homeless Londoners – including almost 78,000 children – currently live in temporary accommodation.
London Councils commissioned Policy in Practice, a social policy software and analytics company, to assess the effectiveness of boroughs’ local welfare assistance (LWA) schemes.
Co-funded by the Greater London Authority, the study is the first in-depth evaluation of its kind. The researchers investigated LWA’s role in delivering emergency financial support to residents who would otherwise find themselves in rapidly worsening situations, including high risk of homelessness. This briefing summarises the research findings.
What is local welfare assistance?
Local welfare assistance provides financial support to households in emergency need. It acts as a safety net to prevent households falling into destitution and to prevent the escalation of crises. At its most stark, LWA provision is the only means by which a resident can access funds needed to eat, heat their home, or have a bed to sleep in.
LWA schemes are locally defined and are funded by individual councils on a discretionary basis. The government abolished direct funding for LWA from 2015/16, leaving local authorities to decide whether to maintain an LWA service that would need to be paid for through their general funds.
Given the pressure on council finances, the long-term viability of local welfare is uncertain without dedicated funding from central government.
Key findings from the study
The overarching conclusion from the research is that local welfare assistance works. It provides timely support at a moment of need, often when there is nowhere else to turn for help. Intervention at the point of crisis, even when this is of a relatively low monetary value, makes a considerable difference to the life of the recipient.
This relatively low-cost intervention can have a significant impact on a resident’s ability to cope. Provision of LWA has a protective effect preventing alternatives that risk exacerbating health or financial crises.
Testimonies from local welfare recipients provide powerful illustrations of impact, ranging from alleviating immediate need through to longer-term outcomes.
Key findings include the following:
- A vast range of events can cause financial crisis and trigger an application for welfare assistance. Examples included domestic abuse, flooding of their home, redundancy, and bereavement. Many applicants had experienced severe delays in receiving benefits payments, suggesting delivery problems in the national benefits system are a factor driving demand for local welfare support.
- Typically, all other support routes have been exhausted before residents request help from their council. Applicants reported that their only other options would be extremely risky and potentially harmful, including living without electricity, taking out unsuitable loans, and stopping eating.
- Council rent arrears of LWA recipients decreased significantly compared to an average increase for all low-income households, strongly suggesting a positive impact on housing security and homelessness prevention.
- As well as benefiting from the monetary support, LWA recipients reported improved mental health from knowing that a safety net exists, and that council staff were working to help them.
- LWA provision enables councils to respond to hardship in their communities flexibly and strategically, including through signposting recipients to other local services and supporting them through better budgeting and debt management approaches.
Concluding that councils are best placed to provide this emergency support to residents, the researchers recommend that central government re-establishes ring-fenced, long-term funding for local authorities’ LWA schemes.
As well as making policy recommendations to the government, the report also highlights best practice and recommendations for boroughs to implement locally. Boroughs will seek to work together to establish the consistent approach to LWA evaluation set out in the report.
Next steps
Local welfare assistance makes an immensely positive impact on recipients lives and can also avoid further costs to the public sector, for example through preventing homelessness.
Restoring dedicated government funding for LWA provision would boost boroughs’ ability to help those in need and would represent a high-value, strategic investment.
London Councils is keen to work with parliamentarians interested in this issue and is grateful for your support for policy change at a national level.
