The chancellor’s six-month extension to an £800m support fund for the poorest households, used by councils to distribute vouchers for food, energy and water bills, will provide only a temporary fix for families facing destitution, charities have warned.
The temporary renewal of the household support fund (HSF), announced in the budget after intensive lobbying from campaigners and local authorities, was welcomed as a short-term measure that would head off immediate fears of a fresh resurgence of “holiday hunger” in the summer.
With little sign of cost of living pressures easing on low-income households, however, campaigners said failure to continue the fund after October or replace it with a more permanent crisis support system would lead to a surge in families unable to meet basic living costs in the winter.
“When [the HSF] ends, councils and charities will be left scrambling to fill an even bigger gap. More people are likely to fall into unaffordable debt, be unable to afford essentials and have no choice but to turn to food banks – who are already at breaking point,” said Helen Barnard, director of policy at the Trussell Trust.
Thomas Lawson, the CEO of charity Turn2us, said: “We hear from hundreds of people every week needing immediate help with food, household bills and essential items … The temporary extension of the fund highlights starkly how our social security system fails to prevent people from sliding into poverty.”
Shaun Davies, chair of the Local Government Association, said: “It is disappointing that we had to wait until the very last minute for an extension, and that it is only for a short period. Three-quarters of councils expect hardship to increase further in their area over the next 12 months.”
The fund has enabled local authorities this year to allocate an estimated £300m to provide holiday food vouchers for families with children on free school meals, about £185m to support local food banks and £227m on issuing energy and water bill vouchers, according to the charity End Furniture Poverty.
The HSF was introduced in 2021 after the removal of the £20-a-week Covid uplift to universal credit, and rapidly became a key part of the local response to the cost of living crisis, enabling councils to help vulnerable people with cash, vouchers and essential items like clothing and replacement electrical white goods.
The removal of the HSF – which effectively funds two-thirds of council-run local welfare provision schemes – had threatened to devastate the already threadbare crisis safety net in England, at a time when food insecurity is soaring and cost of living support payments and energy bill rebates are being discontinued.
Sally, a single parent from West Yorkshire with three children, one of whom is at high school on free school meals, told the Guardian the cash payments provided by her local council “allowed me to breathe” during school holidays when she struggled to feed her kids.
“It was a stress [without the payments]. You’re feeling the pinch. The kids are home and always saying ‘Mum, I’m hungry’. Not being able to feed them properly impacts you as a mum, it attacks your self-respect and dignity,” added Sally, a participant in the York University Changing Realities poverty research project.
The announcement of a six-month reprieve was a “slight relief”, she said. But she felt anxiety that by the autumn there would be renewed uncertainty over whether it would be cut. “Things are not easing off financially. The cost of living crisis is not going to disappear overnight. We need a long-term solution.”
The chancellor also announced the repayment period for advances on universal credit of up to £800 would be doubled from 12 to 24 months. Known as budgeting advances, these payments can be used to meet emergency costs such as replacing a broken cooker or arranging a funeral.
About 900,000 families on universal credit are repaying budgeting advances at an average rate of £41 a month. According to the Joseph Rowntree Foundation, doubling the repayment period should reduce the average deduction each family faces by about £20 a month.
