New loan scheme for those in need

By Emily Pearce

Monday, December 10, 2012

 

A NEW crisis loan and grant scheme for people in extreme financial hardship is to be established by the Isle of Wight Council.

The Local Assistance scheme will replace the current Social Fund scheme, which is run by the government's Department for Work and Pensions (DWP) and due to be abolished on March 31.

Responsibility for administering crisis loans and community care grants — which can be used to help people after a flood or fire, pay travel expenses when a child is taken to hospital, provide help to someone leaving care or prison, or pay for furniture and white goods — will be transferred to the council from April 1.

Some Social Fund elements, including winter fuel payments and maternity grants, will remain the responsibility of the DWP.

A £344,000 government grant will be provided to make payments for the first year, along with £75,443 for administration and start-up costs.

The government has made it clear the funding is for people in extreme hardship, in light of concerns raised by charities that local authorities could divert funding away from those most in need of emergency support.

Following consultation, the scheme will initially be run as a pilot project for one year, administered by the council's benefit team, before a more permanent system is developed and the management outsourced.

According to a report published by the council, the authority is better placed than the government to run the scheme and help people — predominantly low-income families under exceptional pressure, victims of domestic violence, disabled people and the homeless — become financially independent.

It states: "The council can work locally to understand the root causes behind the demand and then use this understanding to design a more pro-active service that provides a longer-term fix, rather than the current short-term fix provided by the DWP."

Reporter: emilyp@iwcpmail.co.uk

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