New data shows that, in response to the financial hardship caused by the COVID-19 pandemic, London’s boroughs increased their local welfare assistance for residents by 368%.
That’s according to cross-party group London Councils, whose research found that, over the 2020-21 period, boroughs increased their local welfare assistance budgets from £2m to a total of £9.6m.
Highlighting the spike in demand for welfare support, London Councils has warned pressures are likely to worsen for many Londoners in the coming months.
London’s unemployment rate of 6% is the highest of any UK region, the furlough scheme is ending on 30 September, and the Universal Credit uplift is set to end in October.
Councils run local welfare assistance schemes and distribute other forms of welfare support to residents at immediate risk of financial crisis – the aim being to prevent problems from spiralling and households becoming homeless.
London already faces the highest homelessness rate in the country, with 165,000 homeless Londoners living in temporary accommodation arranged by their local borough.
Assessing boroughs’ support for hard-pressed residents during the pandemic, London Councils’ research found that:
- Applications to boroughs’ local welfare assistance schemes during the first lockdown were 190% higher than the same period in 2019
- London boroughs made almost 40,000 local welfare assistance payments awards in 2020/21, with the average payment being £242
- Despite the government providing a record £179.5m of national funding in 2020/21 for discretionary housing payments, London’s allocation of £43.7m was “not sufficient to meet demand”
- Boroughs in the capital saw a 5% overspend on discretionary housing payments, compared with a 6% underspend in the rest of England and Wales
- The average discretionary housing payment made by London boroughs was significantly larger in 2020/21 at £1,600 compared to £1,170 in 2019/20
Call to increase local authority resources
Overall, London boroughs spent £53.4m in local welfare support (including local welfare assistance and discretionary housing payments) in 2020/21.
The government abolished direct funding for local welfare assistance from 2015/16, rolling it into the core local government grant, which has since been cut by 27%.
Although COVID-19 emergency grants from the government largely offset the costs of local welfare assistance provision in 2020/21, these have come to an end in 2021/22.
The national budget for discretionary housing payments has also seen a 22% reduction in 2021/22.
London Councils is calling on the government to use the upcoming Spending Review on 27 October to increase local authorities’ resources for providing emergency assistance to those at risk of financial crisis.
Boroughs argue that boosting preventative measures will help avoid higher costs to the public purse.
Muhammed Butt, London Councils’ executive member for Welfare, Empowerment, and Inclusion, said: “Since the start of the COVID-19 pandemic, we’ve seen a dramatic spike in Londoners approaching their local borough for help.
“Many of these residents have lost jobs and are at severe risk of spiralling debt and homelessness.
“Councils play an important role in propping up the welfare safety net, but there’s only so much we can do with the limited resources the government provides us.
“Ministers should use the Spending Review to restore funding for local welfare assistance and boost boroughs’ ability to support those in need.”
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