At 6pm tonight (28th March), the Crisis Loan emergency phone line will be shut down. This was the number people receiving or waiting for benefits could call in an emergency to arrange a small short term loan.
Loans were rarely more than around £60 and were recoverable by deducting a weekly sum from benefit payments. No more than three loans were permitted a year and even this was exceedingly rare. This emergency support, often used by people who had been victims of crime, was more or less cost neutral – almost all of the money paid out in loans was recovered.
Despite this Iain Duncan Smith has ended the scheme out of little more than spite. Whilst loans due to delayed benefits will continue – now called Short Term Benefit Advances and available through Jobcentres – the rest of the Crisis Loan scheme will be closed tomorrow. Local councils will now be expected to support those in a financial emergency. Community Care Grants, usually provided to people moving into independent accommodation for the first time, have also been devolved to local councils.
Such is the contempt felt by well paid Councillors for those in desperate situations, most councils in England* will adopt some form of food stamp or voucher scheme. Some local authorities, as reported by The Guardian, will simply direct people to a food bank.
This ignores the reality of poverty for millions in the UK today, whose chief concern is keeping pre-pay electricity and gas meters topped up enough to keep the lights and heating on. A bag of food bank pasta is of little use if you can’t boil water.
Few claimants can afford to keep prepay meters topped up for more than a few days at a time. Many already live off the emergency credit, usually between £5-7 that the power companies grant those they judge too poor to pay for their gas after they’ve received it. As any local shop keeper knows, the amount most commonly topped up is the minimum required to get the power back on. These people will not be helped by councils like Hampshire handing a few grand to local charities to distribute donated food. In very cold weather, some people may well die because of this nasty little decision.
Many local authorities have not even published details of the scant assistance they will offer from Monday, revealing just how little priority they give to their most marginalised residents.
Wandsworth Council in South London acknowledge they are likely to see around twenty five people seeking help a day, but seem to have no idea what they are going to do on Monday when the changes start. The information on their website informs people that Crisis Loans still exist and that claimants should contact the DWP. In fact documents buried elsewhere suggest a shambolic system, which seems to involve council staff buying white goods for claimants, whilst Crisis Loans will now be made up of a “scheme of vouchers or prepayment cards”. Applications are to be made online or via a freephone number. Neither of these services currently appear to exist.
The situation is equally confused elsewhere in London. The boroughs of Hammersmith & Fulham, Kensington & Chelsea and Westminster have said they will work together on some kind of voucher scheme. These vouchers will be redeemable at Tesco, Sainsburys, and astonishingly Marks & Spencers. Once again there is no published information on how claimants will access the scheme. The same story is repeated across England, with many council websites barely even mentioning what services they will offer when Crisis Loans end, which at the time of writing this post, is in just under six hours.
Council Civic Centres will be the first point of call for many from Monday onwards. Budgeting Loans for larger expenditure can also still be accessed via Jobcentres, although they are soon to be phased out.
Crisis Loans represented the safety net beneath the safety net. A cheap, centrally funded scheme for people to get some vital cash in an emergency. Cash that they had to pay back. With millions of people resorting to High Street loan sharks to pay the bills any government with a trace of humanity would have extended the scheme. Yet Iain Duncan Smith would rather children freeze in dark, unheated homes then risk a claimant buying a pack of fags or lottery ticket with some of the miniscule sum loaned out to the desperate in a crisis.
*The Scottish Government have snubbed Iain Duncan Smith’s plans and set up an alternative Scottish Welfare Fund. Wales will have a grant based system which they have contracted out to Northgate Public Services. Both of these may involve some form of vouchers for some items.
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