Household Support Fund: can we make HSF5 the best round yet?

The extension of the Household Support Fund to September 2024 provides another £500 million for cost of living support. But it’s not enough. This blog looks at what we know about the Household Support Fund after two and a half years and its impact on people and organisations administering it. We argue for more certainty, better data collection, and longer term funding for crisis support.

Announced with only 25 days to go to the end of the current round of funding, the latest Household Support Fund (HSF) extension is another welcome reprieve for local government and third sector partners reliant on the fund for vital financial support to their low income households.

The HSF has seen five iterations of funding since it was launched in October 2021 and, by September 2024, £3 billion will have been spent supporting low income households through the cost of living crisis.

In this time, local authorities will have made more than 26 million HSF awards to households struggling with food and energy costs. When placed alongside the £104 billion package of funding we’ve seen over the same period, HSF seems pretty small. Even smaller when we consider the latest iteration of £500 million is now worth nearly £90 million (18%) less in real terms than in 2021 owing to rapidly changing rates of inflation.

Nevertheless, HSF remains an opportunity to make a difference, providing money is spent where it is most needed and councils are given adequate support to deliver.

Adequate support to deliver comes in two forms: enough funding to cover scheme ambitions, and enough time to both plan and deliver interventions that make a difference. Except for one 12 month sprint, HSF has been drip fed to councils six months at a time, with notice of funding and publication of guidance coming too late to provide sufficient time to deliver more than quick wins.

With pressure to spend money in a narrow window, funding inevitably goes to groups we already know about, not marginalised communities in greater need preventing gains we could have made had we known HSF was to be a three year, £3 billion programme of support.

To be clear, this short termism is in no way the fault of local government delivery teams or their third sector partners, many of whom are looking at how technology can better connect people to support.

Much of the HSF was delivered while we were still in a global pandemic and amid dire budget cuts and wider short term funding pressures, with five of the last eight years seeing only single year financial settlements for local government. With this in mind, what do we know so far?

Spending patterns: what gets measured gets done

HSF reporting has, to date, glossed over equality impacts with data collection and management reporting excluding insight and preventing learning. No data has been recorded centrally on the fund’s impact on women for example, or single parent families.

We have no insight into how marginalised communities have been supported, or how many people living in social housing or the private rented sector have accessed the funds. We don’t know, and are likely to never know, how people from Black or Asian communities have fared under the scheme, whether or not people living in Temporary Accommodation have accessed additional support, or what proportion of households are in receipt of other benefits.

Reducing measured impact to families with children, older people, and people with disabilities oversimplifies the varied challenges people face and risks focusing efforts on these groups at the expense of others. Thankfully, guidance to local authorities has changed since HSF1 where 50% of the fund was ringfenced for households with children.

Learning from HSF1 appears to have influenced HSF2 where guidance split the fund into thirds, with two thirds allocated equally to households with children, and one-third to households with pensioners. Since HSF3, councils have had greater discretion over funding allocations with no groups prioritised over any other, removing policy imperatives that almost certainly disadvantaged some groups in the earlier rounds of the fund.

However, management information returns to the DWP have not reflected this change in delivery priorities and councils are again being asked to define residents supported only in relation to households with children, pensioners, or people with a disability for HSF4, and probably HSF5 when guidance is released.

To comply with management information requirements for the DWP, it’s possible local delivery teams focused their efforts on these groups, giving weight to the adage ‘what gets measured gets done’.

This approach may well hit the target, but risks missing the point entirely. Knowing this, what does information provided to date tell us about how HSF has been awarded?

Provision shows a postcode lottery of support

HSF management information provided by the Department for Work and Pensions from the first three iterations of the fund illustrates that where you live determines the type of support you might receive, which is great when based on local needs.

Over 10 million households were awarded an average of £41.45 under HSF3

HSF3 reporting also shows the disparity in provision with household types in some council areas benefiting more, or less, than their counterparts in other boroughs.

Based on local authority area, amounts awarded varied significantly, ranging from £11.43 per award in Hertfordshire to £1,836.93 in Tameside, a 197%, or 160-fold, difference.

Map 1: HSF spending on children varied from a low of 9% in one council area to 98% elsewhere. The average spending on children was 63%

Map 2: HSF spending on pensioners ranged from 0% to 49% in some areas, with local authorities spending an average of 11% on older people

Map 3: HSF spending on households that include a person with a disability where spending similarly ranged from 0% to 47%. Expenditure on this group was the lowest national average at 10%

As well as expenditure by household type, how money was allocated also varied greatly with cash awards and supermarket vouchers being the main delivery mechanisms, though again these range from 0% allocated by some authorities to 100% allocations elsewhere.

87% of councils used HSF to alleviate holiday hunger

Alongside other spending fluctuations, HSF allocations for Free School Meals during school holidays varied greatly.

Map 4: Collectively, 87% of councils with HSF funding (130 out of 150) spent a staggering 37% of HSF3, worth £156 million, on Free School Meal support during school holidays between October 2022 and March 2023, when there were around five weeks of school holidays

Pressure on families to feed themselves and their children during term time is a source of household stress, exacerbated in the holidays when parents report increasingly going without food themselves to provide for their children. HSF allowed councils to address holiday hunger in the short term.

In a letter to the Prime Minister and Chancellor Manchester City Council, together with seven other city authorities, gave evidence of the impact additional Free School Meal funding has had for 40,000 children in the city. They warned that the eventual end of HSF will exacerbate inequalities in the city where over 60,000 residents have a disposable income of less than £125 a month.

HSF5 is set to end in time for the new school year in September 2024, and until we see how councils plan to spend this round of funding we won’t know how much, if anything, will be allocated to alleviating holiday hunger. If HSF3 allocations are repeated in England for HSF5, councils will need to allocate nearly 60%, or £240 million of their funds, to holiday hunger.

This is no way to fund feeding children living in poverty.

Alongside calls to nationalise auto enrolment of Free School Meals to close the £159 million a year funding gap, and to remove the inexplicable link between Free School Meal take up and Pupil Premium Funding, councils cannot continue to rely on uncertain funding announcements every six months, both for Free School meals, or wider local welfare assistance.

Postcode lotteries get a bad name. Previous Policy in Practice research into the efficacy of local welfare assistance found councils remain best placed to deliver support. When based on evidence, insight, and local need, localised discretionary schemes such as HSF can have grass roots impact national schemes cannot hope to make.

What can we learn from HSF to date to make HSF5 the most impactful round yet?

Proactive awards reduce stigma as well as administration costs

We know through our extensive work on unclaimed benefits that complex application routes, and in many cases having to make an application at all, can impact take up rates.

We also know that vulnerable residents in need of financial support can be reluctant to approach their local authorities as people in poverty are more likely to have Council Tax and / or rent arrears. Proactive allocations based on the smart use of administrative data can help both the council and the resident by removing the need to apply for and assess each application for these fleeting schemes.

In line with other lack of overall trends, HSF3 allocation figures show that scheme provision ranged widely from wholly application based in some areas to wholly proactive allocation in others.

Going forward into HSF5, using data to target support helps both delivery teams and residents. Councils using our LIFT platform to identify and allocate support have been able to put money into pockets faster while lessening the burden of yet another application for people in need.

LIFT contains more than 40 household characteristics that are used to identify households based on local priorities. Our local authority partners use LIFT to identify households that are struggling, at risk, or in crisis in terms of financial resilience.

These insights can be enhanced with other information about households, for example whether a household is in food, fuel, water or relative poverty.

LIFT identifies households with or without children, older people, people with disabilities, and households living in properties with poor EPC ratings. Allocating the HSF using data insights removes the need for application forms and has helped our clients to manage administrative burden, making the process more efficient, and crucially spending more of their HSF allocation on households in need.

At the risk of looking a gift horse in the mouth, the HSF5 extension is not enough money, not enough notice and not enough time for local delivery teams to make a difference for their vulnerable communities.

As other cost of living support dries up and local government funding hits the headlines daily, the Household Support Fund is one of the last lines of defence for councils and third sector partners supporting low income households for the next six months. Whatever happens in this year’s much anticipated general election, the next government must address gaps in local discretionary funding and crisis support.

In the meantime, councils can quickly and accurately get HSF money into the pockets of their low income communities by using administrative data to identify groups based on eligibility criteria and need.

LIFT has provided us with the assurance that we have targeted the HSF to our least financially resilient households.
Robbie Rainford, Head of Community Financial Resilience, Community Wealth Building, Islington Council

Policy in Practice was a finalist in the Digital Impact category at the LGC Awards 2022.  Judges praised the work with local authorities distributing the Household Support Fund via LIFT, a digital tool that brings datasets to life:

A deeply impressive data analysis platform, converting council data into actionable insight to help councils address the cost of living crisis.

Learn how LIFT can help you allocate your HSF5 funds

Please talk to us about:

• How the LIFT platform can help your local authority with HSF allocations
• How we’re helping organisations from councils, finance sector organisations, charities and utilities to seamlessly and efficiently integrate income maximisation into existing customer journeys to help close the £19 billion annual unclaimed support gap

Book a call with our team, email hello@policyinpractice.co.uk or call 0330 088 9242.