The government has announced the allocation of an £842 million Household Support Fund (HSF) to councils in England. New research from Policy in Practice that evaluates how discretionary Local Welfare Assistance schemes are delivered can help Household Support Fund scheme design. This blog shares practical considerations from the research to help councils design their Household Support Fund schemes.
Local authorities are best placed to administer discretionary support such as the Household Support Fund
The Household Support Fund was set up in October 2021 and has been given to councils on a year by year basis since then. In its first year the fund was intended to help residents recover financially from the economic impact of Covid and it has now evolved to support residents during the cost of living crisis.
Councils have considerable experience in administering discretionary support to their residents. All unitary and district councils administer Discretionary Housing Payments and discretionary Council Tax support.
In addition, six out of seven of these councils provide their own funding for Local Welfare Assistance, sometimes referred to as Local Welfare Provision or crisis support. Where councils provide this assistance the level of funding, scheme design and support mechanism are determined solely by the council.
Household Support Funding is provided by central government and comes with strong guidance on its use and administration. This framework means that councils do not have the same freedom of allocation of support as for council funded Local Welfare Assistance. Nevertheless, the continuation of the HSF into 2023–2024 means that centrally funded money for local welfare is available across England and is ring-fenced for at least a further year.
Devolved administrations will receive money for their own schemes under the Barnett formula, the mechanism used by the Treasury to allocate block grants to Scotland, Wales and Northern Ireland.
How well has crisis support for residents been administered?
It is clear that councils across the UK now play an increasingly important role in delivering crisis support for residents, first seen during Covid and now with the cost of living crisis.
Given the expansion of local discretionary support it is perhaps surprising that there has been little evaluation of the impact of support or the best method of delivery. To address this London Councils, funded by the Greater London Authority (GLA), commissioned Policy in Practice to evaluate Local Welfare Assistance schemes across London. The research findings were published in February 2023.
The overarching conclusion from this 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. Yet the value of the LWA service goes beyond the monetary value of the LWA award.
Councils must submit their plans for distribution of the Household Support Fund to the government by 17 May 2023. They can use the findings from Policy in Practice’s research to inform their scheme design and HSF plan.
How should the new Household Support Fund be spent?
The Household Support Fund is to be used by councils to support residents with essentials, the definition of which is left to councils to determine. Councils have discretion over exactly how this funding is used, but it must be administered in a way that fits within the framework set by the government.
The government’s expectation is that the Household Support Fund is used to support residents in the most need and supports a wide range of households on low incomes.
Guidance accompanying the framework includes examples of households that could be supported:
- Residents who may not be eligible for the other recent government support such as energy support and the Cost of Living Payments
- Households struggling to meet the cost of energy
- Residents living with a disability who may be disproportionately affected by the rise in fuel and other costs
- Residents with caring responsibilities
The design of the support scheme is left to councils.
Councils that already administer a Local Welfare Assistance scheme are likely to maintain elements of their current support design. For those councils that do not provide a LWA scheme, the design of the delivery and support mechanisms is likely to be based on those of previous years.
Policy in Practice’s research into the impact of different support and delivery mechanisms is a useful basis for councils as they review their delivery mechanisms prior to returning their HSF plan to central government.
Local authority’s HSF plans must fall within the framework that accompanied the funding. This includes a number of provisions that plans must adhere to:
- Councils must keep the scheme open until the end of March 2024
- Councils must set aside a proportion of the funding to allow for application. In other words, councils cannot distribute the whole funding to targeted households, although this can form part of the distribution policy
- Councils are expected to advertise the support, including the application mechanism, through a variety of channels
- County Councils must work closely with their District Councils
How can research evaluating Local Welfare Assistance schemes help with Household Support Fund plan design?
Policy in Practice’s research evaluating Local Welfare Assistance schemes was carried out in seven London boroughs using in-depth interviews with local welfare recipients, surveys and data analysis.
The research found that councils’ role in support is not just financial, they provide crucial help to residents in times of crisis. This support is highly valued by residents and helps them to navigate a complex system.
Awards of LWA prevent the escalation of crisis and protect residents from harmful consequences. 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.
The findings suggest that local welfare has the most impact where it is part of a holistic support scheme. For example, with the provision of a support offer that includes income maximisation, debt support, budgeting support, and referral to other agencies.
The findings from the research informed evidence-based recommendations to councils around scheme design. These can be applied to HSF plans as well as council-funded LWA schemes.
Five practical recommendations for designing Household Support Fund plans
1. Use council data to target support at points of crisis
Councils can use their household level data, as well as the data provided by the DWP, to identify residents who may need support.
Examples provided in the report are:
- As arrears increase and payments are missed
- Moving into or out of temporary accommodation
- When an HB stop notice indicating a move to Universal Credit is received
- Households with income below needs
The framework for the Household Support Fund encourages councils to use a wide range of data to identify and provide support to a broad cross section of vulnerable households, supporting the recommendation on the best use of data within the report.
As the government has issued the funding as part of Local Welfare Provision there is a legal gateway to use the data it receives from DWP on benefit recipients to inform the distribution of the Household Support Fund. For more information on legal gateways contact firstname.lastname@example.org.
In addition, the DWP continues to provide an additional monthly dataset to councils of households in receipt of Universal Credit who may be vulnerable to the cost of living crisis. These datasets, together with a council’s own internal data, can be used to identify vulnerability at an early stage.
The LWA research report also recommends that councils ensure that the data held on residents who receive discretionary support is designed to facilitate linking with other council data such as Council Tax Support and arrears data. This approach would allow councils to develop a single view of the needs of residents and track outcomes over time.
2. Ensure all LWA applicants have access to additional support
Policy in Practice’s research found that the vast majority of LWA recipients who were provided with holistic support found it useful, particularly benefit health checks and budgeting support. Councils can use the allocation mechanism for discretionary support to fully engage with vulnerable residents and help them to move towards a more sustainable ongoing financial situation.
3. Provide comprehensive support packs
A number of the councils that took part in the LWA research provided comprehensive support packs to LWA recipients. Residents found these extremely useful with many commenting that they became their primary source for signposting and assistance. Typically, these packs contained contacts for third party and other support agencies, lists of cheaper retailers, and advice on where to go for support.
4. Review application processes to ensure they do not cause barriers to application
The research evidenced a need for a choice of communication and application channels. The findings recommended having both telephone and online application channels to ensure that application processes do not create barriers for specific groups. Findings also emphasised the need to ensure that the application process itself does not cause additional cost or stress for the resident. For example, with long telephone waits or application forms that do not allow space for description of a complex situation.
5. Review support and delivery mechanisms to ensure they best meet the needs of residents
Councils are advised to triage for additional support needs at the point of application to ensure that the method of delivery of support, and further communication, is appropriate.
Cash is the preferred support option and the most cost effective. It allows the recipient to shop around and use low-cost outlets and spread the support across competing needs, such as fuel and food.
Councils are often wary of providing cash support due to the risk of fraud. However, data already held by the council can be useful in evidencing identity, income, and vulnerability without the need for further evidence.
The report recommends that councils remove burdens to accessing support, for example by providing vouchers that can only be used in certain shops or requiring numerous quotes for support with essential maintenance.
The fieldwork that was undertaken as part of the research illustrated that residents may not take up the support that they need if it would require them to travel, due primarily to disability and cost, or if they cannot obtain the evidence required.
What is the future of Local Welfare Assistance schemes?
A further year of funding for the Household Support Fund is extremely welcome and will go some way to supporting residents with the cost of living. However, by only funding on a year by year basis long-term planning and investment into support mechanisms is unfeasible for councils.
With one in seven councils not providing any discretionary local welfare beyond the Household Support Fund, and with council budgets already under unprecedented pressure, we urge the government to provide ongoing dedicated ring fenced funding based on borough poverty levels.
This will ensure that councils can invest in the best use of their data and develop a support scheme that provides the most effective support to their residents.
Councils can use data to target discretionary support and keep track of recipients
Leading local authorities are analysing their household level data using a LIFT platform to target discretionary support such as the HSF.
LIFT can segment datasets to show target groups of residents based on Household Support Fund criteria, such as families who were not eligible for cost of living payments or those with high energy costs. Councils can then drill down further to identify individual households most in need of support.
Families can be proactively targeted with support and their outcomes tracked on a monthly basis to monitor how they are doing. Councils can pinpoint any further signs of crisis that may require additional intervention.
By analysing their administrative data using LIFT councils can maximise the impact of their discretionary schemes at a time of increased funding pressures. Smarter approaches mean the most vulnerable families can be better helped through the cost of living crisis.
Join our free webinar, Social safety nets: The importance of Local Welfare Assistance and Household Support Funds, on Wednesday 26 April from 10.30 to 11.45.
Speakers Jonathan Flowers and Zoe Charlesworth for Policy in Practice will discuss the evolution of and need for local authority discretionary funding. Zoe will share more findings and recommendations from our research into Local Welfare Assistance programmes and explore how these can be used to create Household Support Fund schemes for 2023-24. They will be joined by a frontline advisor guest speaker who will share the voice of recipients of the support funds, showing the depth and complexity of need.