A welfare fund set up to help the most vulnerable could be at risk unless more funding is provided to help councils administer it, officials have warned.
Crisis grants paid out by West Lothian Council as part of the Scottish Welfare Fund (SWF) have risen 173% since 2019, and broke the £1m barrier in the last financial year.
Demand on the Holyrood funding has surged across the country, and all councils including West Lothian have seen their costs surge as they struggle to administer the Fund.
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The council has to prioritise those most in need for help through crisis grants or community care grants, which can be used to buy household goods. Now staff fear that unless there is a huge increase in Holyrood funding they will not not even be able to help those most in need.
The council’s Corporate Policy and Resources Policy Development and Scrutiny Panel heard this week that the SWF cost the council more than £500,000 to administer in the last financial year when they were given only £171,000 by Holyrood to run the fund.
That comes as they look at making savings of £47.1 million over the next five years, with the potential that this could increase closer to 2027.
Manager of the Anti-Poverty Service, Nahid Hanif told the meeting: "Currently the council is subsidising both the programme fund and the administration funding for the SWF. The additional funding is not guaranteed beyond the financial year. Should the budget allocation remain the same 2023 and beyond it’s clear that supporting the increased numbers of people accessing the SWF will become very challenging.”
The report added: “The demand on the scheme has increased significantly as both the pandemic and the current cost of living crisis squeezes household finances. It is anticipated that the demand on the scheme will continue to increase as we move through the winter months.
"In addition, the cost of providing furniture for homes is increasing by the rate of inflation and the amount paid out in CG’s has increased by 173.7% from £373,561 in 2019/20 to £1,025,212 in 2021/22.
“With the exception of 2020/21, when the council was provided with an additional Covid budget from the Scottish Government, the budget has not covered the cost of the grants being paid.”
Two quarters into this financial year the shortfall in the fund, not counting the administration costs is more than £20,000. In the last financial year the shortfall cost the council £103,751, over and above the £2,134,159 it was given by the Scottish Government.
SNP Group leader Councillor Janet Campbell asked why there was no mention in the report that the Scottish Block Grant from Westminster had been reduced by £1.8bn “simply due to inflation”.
Director of Finance Donald Forrest said: “The report is providing a factual objective position on the funding we receive. I think if the report went into all the potential reasons, every report would become quite elongated. It sets out the funding for the Scottish Welfare Fund for four years. The report is intended to fulfil a specific purpose."
He added: “There’s regular liaison between the Scottish Government, Cosla and all 32 councils. The issue of administration funding has been raised by all the councils. To enable us to meet target timescales we have had to spend in excess of the funding that is available.”
The Scottish Government is reviewing the future of the Scottish Welfare Fund and is set to report before the end of the financial year.
Chairing the meeting, Councillor Kirsteen Sullivan said: “Given that this is devolved fund and there has not been any significant uplift for the last few years, requiring the council to give its own funding towards it in order to meet the needs of the local community, is it correct to say that if a significant uplift is not forthcoming that there’s a real danger that we’ll not be able to support the increasing number of people coming forward?.
Mr Forrest said that if core government funding remains the same there will have to be “severe rationing” of payments in the future
Responding to Councillor Campbell’s assertion that the Edinburgh parliament was hamstrung by underfunding from Westminster, and no mention of those cuts were in the report, Labour’s Tom Conn said: “Maybe the question should be put to the Scottish Government why their priority wasn’t to support local government and the Scottish Welfare Fund.
"Local government is devolved to the Scottish parliament. They should be taking responsibility for their decisions rather than blaming Westminster. The decision was made in Edinburgh and the responsibility stops there.”
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