Household Support Fund extension welcomed but Hunt warned it is a temporary fix
As well as extending the fund by six months, the Chancellor has scrapped a £90 charge on debt relief orders.
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Your support makes all the difference.A six-month extension to a fund helping the most vulnerable people struggling with the cost of living is welcome but is “only a temporary fix” with longer-term help needed, campaigners and councils said.
Chancellor Jeremy Hunt had been under pressure to continue the Household Support Fund (HSF) beyond the end of March and has now accepted that “now is not the time to stop the targeted help it offers”.
Council leaders from across the political spectrum wrote to him calling for an extension, as did almost 90 parliamentarians on the issue.
The Government needs to use the next six months to agree a more sustainable successor to the HSF
The Government has now confirmed it will extend the fund with an extra £500 million.
During his Budget speech on Wednesday, Mr Hunt told the Commons: “Next, the Household Support Fund. It was set up on a temporary basis and due to conclude at the end of this month.”
He said he had “listened carefully” to representations from anti-poverty charity the Joseph Rowntree Foundation and the Trussell Trust, which runs a network of food banks, as well as MPs.
He added: “I have decided that with the battle against inflation still not over, now is not the time to stop the targeted help it offers. We will therefore continue it at current levels for another six months.”
Started in 2021, the HSF has provided £2.5 billion of welfare support via local authorities to help vulnerable people with food, water and energy bills.
Shaun Davies, chair of the Local Government Association, which represents councils, said while they are “pleased” at the extension, the “very last minute” announcement and the fact it is “only for a short period” was “disappointing”.
He said: “Three-quarters of councils expect hardship to increase further in their area over the next 12 months.
“The Government needs to use the next six months to agree a more sustainable successor to the HSF.
“Councils need certainty and consistent funding to efficiently maintain the staff, services and networks that help our most vulnerable residents. Without this, we risk more people falling into financial crisis as we head into winter.”
The Trussell Trust said the Chancellor’s announcements “will provide short-term relief to some” but added they were “disappointed” that “only temporary sticking plasters instead of long-term solutions to the crisis of rising hunger, hardship, and debt” had been offered.
Its director of policy, Helen Barnard, said: “When it (the HSF) ends, councils and charities will be left scrambling to fill an even bigger gap.”
She said the spring Budget “will do little” to prevent living standards “falling even further in the coming year”.
Citizens Advice echoed this, saying while welcome, the extension is “only a temporary fix” and that “a longer-term commitment (is needed) to ensure this vital fund doesn’t abruptly dry up in the future”.
Its chief executive Dame Clare Moriarty welcomed the scrapping of the £90 charge on debt relief orders – something it had called for.
Families with children are the group most likely to be in financial hardship and with no targeted package of support it was a wasted opportunity to provide help to the people who need it most
Mr Hunt said the cost of getting an order, which can allow £30,000 or less to be written off, can “deter the very people who need them the most”.
He said: “Having listened carefully to representations from Citizens Advice, I today relieve pressure on around 40,000 families every year by abolishing the £90 charge completely.”
He also pledged efforts to help households falling into debt by lengthening the repayment period for new loans from one year to two.
He said: “Nearly one million households on Universal Credit take out budgeting advance loans to pay for more expensive emergencies like boiler repairs or help getting a job.
“To help make such loans more affordable, I have today decided to increase the repayment period for new loans from 12 months to 24 months.”
The Household Support Fund, while necessary for families in poverty, will do nothing to address the underlying causes of hardship and will only need to be extended once more without further action in the interim
Action for Children said the Budget from a Government it said is “swept up in pre-election fever” had “largely ignored children and families struggling in poverty”.
Joe Lane, the charity’s director of policy and campaigns, said: “Families with children are the group most likely to be in financial hardship and with no targeted package of support it was a wasted opportunity to provide help to the people who need it most.
“The national insurance cut along with the changes to child benefit mostly affects higher earners and whilst welcome, the short extension of the Household Support Fund is a temporary fix.”
Big Issue founder Lord Bird said that while cost-of-living and debt measures were welcome, “yet again the Chancellor has not gone far enough”.
The peer, who experienced poverty in his youth, said: “The Household Support Fund, while necessary for families in poverty, will do nothing to address the underlying causes of hardship and will only need to be extended once more without further action in the interim.”