Cash grants beat food vouchers

Leeds City Council will consider using its limited hardship funds to provide cash grants to struggling people rather than referring them to food banks or giving them vouchers, after new research suggested it would better help them survive the cost-of-living crisis.

The research follows a pilot started last year in which the council worked with three food banks in Leeds, Leeds Food Aid Network (LFAN) and the Trussell Trust to set up a cash-first scheme.

‘Dignified’

In the last two years the government has provided over £2 billion in funding to local authorities in England to deliver immediate support to households facing financial hardship.

Most recently, the Household Support Fund has provided over £1.2 billion in funding to local councils in England since September 2021.

Government guidance to local authorities recommends this support comes in the form of referrals to food banks and vouchers for food, utility bills and other costs for struggling households.

Where the guidance refers to cash, according to the Trussell Trust – the largest network of food banks in the country – it mainly relates to concerns about limiting it to prevent fraud. But the trust says in some cases this has led to “people struggling to access support”.

In Leeds, this funding is channelled through the council’s Local Welfare Support Scheme. The Leeds pilot scheme provided 283 people eligible for the scheme with a total of £45,450 in grants.

The research found that 94 per cent of recipients preferred a cash option to a food parcel, and 78 per cent said their ability to afford essentials improved during the grant period.

Ninety per cent experienced an improvement in overall finances during the grant period and 86 per cent did not use a food bank while in receipt of the grant.

“The cash grant really relieved a lot of stress for me at the hardest financial moment of my life,” said one recipient. “I was able to put petrol in to get to work, and get some gas and electric, etc.”

The Trussell Trust said cash grants are a “more dignified form of support when people face financial hardship” and its research showed grants do not lead to “misuse”.

They also allow people to pay off debt or pay for a car’s MOT to get to work, putting them on a more secure financial footing.

Mary Harland, Leeds City Council’s executive member for communities, said the local authority was “absolutely committed” to tackling poverty and inequalities and welcomed the research.

“We want people to have choice when it comes to what they need to spend their money on and we will be looking to embed a cash offer within the Local Welfare Support Scheme, taking learning from this pilot,” she said.

“We hope that other local authorities are able to take the valuable learning which came from this pilot.”

Karen Burgon, CEO of Leeds North and West Foodbank, said: “We have worked with Leeds City Council for many years supporting the provision of the Local Welfare Support Scheme with food parcels, but we don’t believe that the residents of Leeds should have to rely on a food parcel when they are at a crisis point, so we were delighted when the council suggested this pilot scheme.

“We are excited to see the positive impact embedding a cash-first approach option within the local welfare scheme could have on people’s ability to afford the essentials.”

Many recipients of cash grants in the pilot told researchers that benefits were too low to sustain them, and that problems such as being in debt to the government for loans, facing benefit sanctions or the five-week wait for payment led to them being unable to afford the essentials.

“I’m in debt with Universal Credit for two loans and rent arrears,” said one. “I only get £62 a week – I’ve never struggled so hard.”

Another said: “Being moved onto Universal Credit last year really put me into a financial struggle for the first time ever.”

The Trussell Trust said that despite the success of the pilot, without increased benefits cash grants at a local level could only be a “sticking plaster”.

Danni Malone, director of network programmes and innovation at the Trussell Trust, said: “Food banks should never be the first port of call when people face a shortfall in their income which leaves them unable to afford the essentials.

“A food parcel is not going to help pay the gas bill, get a taxi to a hospital appointment, or support with securing a new tenancy.”