This week, the House of Lords will again debate the welfare reform bill. Among other changes, the bill proposes to abolish the discretionary social fund – which provides grants and zero-interest loans to help vulnerable people with essential outlays (such as beds, cots or cookers) or deal with sudden costs incurred in a crisis, such as family breakdown – and transfers some of the funding to local authorities, which will be entitled, but not obliged, to operate their own schemes.
Critics argue that cash-strapped local authorities will not choose to spend these reduced funds on replacement schemes – they have unprecedented pressures on their budgets and no town hall will want to make itself a particularly attractive target to the poor.
Labour peers are expected to call for the cash to be ringfenced so local authorities are required to spend it on a replacement scheme.
In May 2011, Steve Webb, a minister in the Department for Work and Pensions said: "The social fund is not being devolved to local councils. The welfare reform bill includes proposals to abolish the discretionary social fund. It will be replaced with a combination of locally designed and targeted assistance for the most vulnerable people in the community and a modernised and simplified national system of payments on account accessed through the benefit system."
A spokesperson said: "We're reforming the social fund because it is too complex and poorly targeted. Local authorities are best placed to deliver this support and will ensure that it goes to those most in need. People will now benefit from local knowledge and wider support services."