Labour will review the impact of the Coalition’s squeeze of local communities

By Andy Sawford MP and Stephen Timms MP

Five years ago the Conservative Party were keen to brandish their new found compassion and zeal for localism. A quick resume of their record on welfare and in local government paints a different picture. What we have witnessed is a wasteful approach to welfare reform, and onerous duties being transferred to Local Authorities with no resources to deliver them.

Far from being all in it together, the poor and the working poor have been hammered. Living standards have suffered and foodbank demand has rocketed.

The discretionary Social Fund has been abolished, and replaced with local welfare assistance. The Social Fund was a ‘thin red line’ of assistance, to help the most vulnerable facing a sudden crisis. Established in 1988, it consisted of grants and loans that could support independent living, provide assistance for emergencies and help meet daily expenses pending an initial benefit payment. It provided crisis support for residents in serious hardship, including women fleeing domestic violence, those facing the threat of homelessness, families struggling to afford food and care leavers setting up home for the first time.

When the Government’s Welfare Reform Act scrapped the Social Fund it was replaced from April 2013 with new Local Welfare Assistance schemes, provided by local authorities. Many Councils have been innovative and enterprising, and taken up the challenge with good, locally tailored schemes. Labour-run Islington council, for instance, has developed the ‘Residents Support Scheme’. They have integrated their budget for local welfare support and other sources of discretionary funding such as grant making programmes into a unified source of support. The scheme provides non-financial assistance such as money advice, help with employment and training and support to address social isolation.

However, local government has faced significant reductions in central government funding and areas with the greatest needs have faced the biggest budget cuts. The facts are stark. Under this Government households in the ten areas ranking highest for multiple deprivation have faced council cuts in spending power sixteen times greater than the ten areas that rank lowest. The councils serving the ten local communities that rank highest for health deprivation and disability have faced reductions in spending power per person twelve times greater than the ten areas that rank lowest.

The Children’s Society described the Local Welfare Assistance arrangements as a ‘huge post code lottery’. The Centre for Responsible Credit produced a comprehensive report on schemes operating in 2013/14. The report concluded that ‘there are wide variations in the amount of help being provided by England’s local authorities’ and that ‘…there have been major problems in England with the implementation of local welfare schemes, and that provision varies considerably across the country. ‘

The problems deepened when, in January 2014, the Department for Work and Pensions (DWP) said it would end specific funding for Local Welfare Assistance after 2014/15. Notional funding for schemes would be within the wider funding for local authorities provided by Department for Communities and Local Government (DLCG). There would be no more ring-fenced funding for Local Welfare Assistance.

This decision was challenged by the Child Poverty Action Group via a Judicial Review. The Government lost, and, as a result, had to consult on a range of options. A Local Government Association survey showed that the vast majority of local authorities would provide minimal or no services if government provision disappeared.

During the autumn poverty campaigners and local authorities waited, more in hope than expectation, that new money would be allocated. It was not. The Government claimed that £74m was provided “in dealing with pressures on local welfare and health and social care”, but this was not additional money and it was not ring-fenced. Serious concerns remain about how local authorities can deliver support with reduced resources, particularly when many local authorities report that they are dealing with problems caused at the Jobcentre – including long delays in processing benefits, and failures to tell people about their entitlement to emergency payments.

We want a system that can respond swiftly when people face emergency needs. Tory ministers in the DWP and DCLG disagree about whether council tax should be included in Universal Credit, and about the impact of the Benefit Cap. We are convinced that a better approach is possible if the departments work together. So we have announced that, if we are elected on 7 May, we shall review how DWP and DCLG work together to support those who need it – looking in particular at how Local Welfare Assistance is funded and delivered, and consider whether Council Tax Benefit should be absorbed within Universal Credit.

A Labour Government will face a tough inheritance and we can’t undo all the damage done. But we will make sure local authorities are more fairly funded to reflect need and will devolve significant funding and powers. And we will not sideline the vulnerable as the Government has over the past few years. We will listen, and where can we will act.

Andy Sawford MP, Shadow Local Government Minister and Rt Hon Stephen Timms MP, Shadow Minister for Employment