Chancellor Rishi Sunak has confirmed a £500 million package of grants to help vulnerable households this winter with essentials such as food, clothing and utilities, amid warnings of a cost of living crisis.
With an imminent cut in universal credit saving the government £6 billion per year, the end of the furlough scheme, rising energy prices and a looming increase in national insurance contributions, the support, however, was immediately labelled a “sticking plaster”.
According to the Department for Work and Pensions (DWP), which has faced intense criticism for pushing ahead with plans to end the £20-per-week uplift in universal credit, the £500m “households support fund” will be distributed to councils in England from October.
The plans — first reported by Bloomberg — will replace the Covid local support grant, which ends on Thursday and enabled local authorities across England to support those struggling with costs, including for food, energy, and water bills during the pandemic.
“Everyone should be able to afford the essentials, and we are committed to ensuring that is the case,” Mr Sunak said in a statement.
“Our new households support fund will provide a lifeline for those at risk of struggling to keep up with their bills over the winter, adding to the support the government is already providing to help people with the cost of living.”
The department added that the new fund will run over the winter and will complement the warm homes discount which provides rebates on energy bills each winter to 2.2 million low income households.
Labour’s Jonathan Reynolds, the shadow work and pensions secretary, however, said: “Conservative choices have created a perfect storm this winter, leaving working people facing tax hikes, an energy crisis and cuts to universal credit.
“Temporary and inadequate sticking plasters are no substitute for a proper social security system that offers security to families in hard times.
The Liberal Democrat’s Treasury spokesperson, Christine Jardine also compared the support as “some crumbs off the table”, claiming that the chancellor is “kidding himself if he thinks this will be enough to prevent the looming winter of discontent”.
“This will be cold comfort for struggling families seeing their universal credit slashed and facing the risk of eviction,” she added.
The Joseph Rowntree Foundation described the measure as an “11th hour attempt to save face as the government presses ahead with an unprecedented overnight cut to universal credit next week”.
The organisation added: “The support available through this fund is provided on a discretionary basis to families facing emergency situations. It does not come close to meeting the scale of the challenge facing millions of families on low incomes as the cost-of-living crisis looms.
“By admitting today that families will need to apply for emergency grants to meet the costs of basis like food and heating through winter, it’s clear the chancellor knows the damage the cut to universal credit will cause.”
The work and pensions secretary Therese Coffey added: “Over the last year, we have helped millions of people provide for their families. Many are now back on their feet but we know that some may still need further support.
“Our targeted household support fund is here to help those vulnerable households with essential costs as we push through the last stages of our recovery from the pandemic.”
