The Government is considering whether to renew the Household Support Fund, a discretionary fund distributed to local authorities to provide cost-of-living support to low-income households. Based on results from their recent research, Jed Meers, John Hudson, Kit Colliver and Neil Lunt make the case for its renewal and underscore the damage that uncertainty over the fund’s future has on local authorities and the households they support.

The future of the £1 billion-per-year “Household Support Fund” (HSF) is in doubt. This local authority-administered cost-of-living support is currently in its fourth wave, making millions of payments and providing support to low-income households across the country. Although the fund has shifted shape since its introduction, a sizable package of discretionary support has been in place at the local level since the COVID “Winter Support Grant” in 2020, which evolved into the “COVID Local Support Grant” and in turn the HSF in 2021.

It has become a lifeline for hundreds of thousands of low-income households across the country during the cost-of-living crisis. But the Autumn Statement was accompanied by a hokey cokey over whether the fund would be renewed past March 2024. When asked by Stephen Timms MP (Chair of the Work & Pensions Committee) if there would be a HSF “next year”, Chancellor Jeremy Hunt replied: “Yes, there will. Treasury sources then briefed that the fund was due to expire when the current wave elapses. And this week the Government has confirmed and reiterated that “no further decisions have been taken on the Household Support Fund”.

Failing to renew the HSF would be a mistake.

Based on our research with local authorities in England on the Household Support Fund, we argue that: (1) putting off this decision is hugely damaging, as local authorities need to know about the future of the fund now; (2) many low-income households across the country have come to rely on this support; and, (3) the ripple effects of its withdrawal would be felt throughout the third sector, from welfare advice organisations to food banks. Failing to renew the HSF would be a mistake.

1. The problem with procrastination

Local authorities need clarity on the future of the fund now, whether it is renewed or not. They have streams of work relying on this funding, staff roles depend on it and a wide range of third sector organisations (such as food banks and advice services) in part sustain their activities with HSF support. So far, it has almost always been renewed in a matter of weeks ahead of otherwise expiring. This makes planning at the local authority level almost impossible. As one of our participants put it:

“We went twelve months, then twelve months, then six months, then six months, so it’s just been bitty and bobby really. And every time we’ve had the scheme, the message from the [Government] has been ‘This is the last year you’ll get the funding’. So we’re all like, right, okay, we’re not going to get it again, so we’re not planning for something long-term… We really struggled with it.”

This uncertainty has knock-on consequences for staff retention. Local authorities need to draw down on their HSF allocation to support administration costs; everything from making awards, collecting monitoring data, working with third sector partners, and so on. One of our participants underscored how this uncertainly “affects everything”. The “time on recruitment activities is really challenging; the staff wellbeing, if they don’t know they’ve got a job” and they cannot “overemphasise how much of an impact it has”. With all the uncertainty it causes, procrastinating on the decision is damaging and the Government should announce its intentions now.

2. Pulling the rug out

Millions of families have come to rely on support provided by the fund. Perhaps the best illustration of its reach is in the provision of free school meals outside of term time. A majority of local authorities support food voucher programmes in the holidays to assist households in receipt of free school meals in term-time. This tends to be a significant proportion of expenditure from the fund; often as much as a third or even half of their overall budget. The people we spoke with in local authorities were nervous about this support being pulled away from families who had come to rely on it:

“I know some authorities are thinking of ditching the free school meal vouchers…. We’re not quite sure that’s a good idea because we feel there may have been some dependency created on those and we’d like [the Department for Work & Pensions] to come up with the exit strategy for that if they want local authorities to move away from that because that is really what the scheme was originally all about.”

People at another local authority told us about the “emails [they] get just before the holidays from families” saying to them “Please make sure that I get my voucher. Can you please confirm this is still continuing?” The Wave Three HSF data points to millions of individual awards across England from the scheme. The Government needs to recognise that failing to renew the scheme without providing alternative support removes a significant lifeline across the country during a deep cost-of-living crisis that is still being felt by millions of households.

3. Ripples through the ecosystem

In order to make best use of the HSF, most local authorities have developed existing partnerships with third-sector organisations or struck up new ones. This is a win-win proposition: community and voluntary sector organisations are often working closely with households struggling with the cost of living (helping, for instance, with debt issues or social welfare advice). They provide greater support than is possible in-house by a local authority. Likewise, in a challenging financial environment, the HSF provides support to sustain the work of a wide range of third sector organisations – from advice services through to food banks. As one of our participants put it:

… can we use the [HSF] money in a way that relieves pressure on other organisations… We’re saying to smaller community groups, right, you know the people who are in need, they’re coming to you already, we’ll fund you…

The future of the HSF

In the grand context of the welfare state as a whole, £1 billion per annum is not a significant sum of money. However, with rapidly rising levels of destitution, estimated to affect 3.8 million people last year, including around 1 million children, the HSF has come to be an important lifeline across the country, as many campaigning organisations and charities have begun to highlight. Failing to renew the fund (and therefore also removing the funding for its devolved equivalents) would be a costly mistake for the households that rely on it and would have ripples throughout the third sector.

Kicking the decision into the long grass, potentially to the Spring Budget this year, which takes place a matter of days before the current funding is due to expire, makes it impossible for local authorities to adequately plan and put arrangements in place. Procrastinating will further damage staff retention and the ability to sustain existing activity.

The local authority representatives who took part in our research all wanted to see a stronger social security system that is better able to meet the needs of households. The HSF and other forms of discretionary support have become an important component in responding to the cost-of-living crisis. The Government should commit to its renewal, not for six months or a year, but for a sustained period, to help support local authorities in organising this support while we move to a fairer social security system.

This blog post is based on “Sticking plaster” support: The Household Support Fund and localised assistance in the UK welfare state“, Journal of Poverty and Social Justice.

All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science.

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