Crisis loan cuts: Tories and Labour 'equally guilty'

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Monday, 18 June 2012 00:16

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By a Newsnet reporter 

The SNP's Work and Pensions Spokesperson, Eilidh Whiteford MP, has condemned cuts to crisis loans and community care grants, and called on the UK government to ensure adequate funds are put in place before the schemes are devolved next year.

The Banff and Buchan MP will raise concerns over the funding issues during a parliamentary debate she has secured to be held on Tuesday.

The budget for community care grants in Scotland was cut by 7% this financial year, after being frozen since 2005-06.  The budget for crisis loans for living expenses is expected to be around half of recent spend, at £4.7 million in comparison to £10 million in 2009-10.

The ability to claim awards was also dramatically cut back this year with funding for household items such as cookers and beds abolished except in disasters such as fires or floods, and applicants restricted to three awards in a rolling twelve month period.  Thousands of applicants in Scotland are expected to lose out as a result of the cuts.

The cuts to the social fund streams take place in the year before responsibility for community care grants and crisis loans is devolved to the Scottish Government under the UK Government's localisation agenda.  The budget transferred for the successor scheme is expected to be around £25 million, leaving a significant gap compared with recent spend in Scotland.  

In 2010 to 2011, the last financial year for which full figures are available, the total spend in Scotland on community care grants and crisis loans was £29,049,000.  

Community care grants provide vital assistance for some of the most vulnerable groups in society, young adults leaving care and those fleeing domestic abuse depend on the grants in order to provide modest furnishings in their new homes. 

The grants are also awarded to people on benefits who suffer from certain disabilities or illnesses and who require specialised equipment or adaptations to their home in order to avoid going into residential care.   

Dr Whiteford said:

"Community Care Grants and Crisis Loans offer vital lifeline support to the most vulnerable at times of exceptional pressure.  To cut these emergency funds is appalling - the Con-Dem government are penalising the poor for a financial crisis not of their making.

"These are small sums of money which make a big difference to people facing exceptionally difficult times – such as helping a person to remain in the community rather than go into care, help for people going through a family breakdown or emergency, or support for women fleeing domestic violence.

"By their nature crisis loans are a last resort, and it is outrageous that the Tory-led Government is cutting this safety net so drastically.  The only winners from this will be loan sharks and high interest lenders."

Dr Whiteford explained how Labour were just as guilty as the Tories in undermining this vital welfare support.  Under the Labour party community care grants were frozen at 2005-06 levels, which is a real terms cut of 11-12%.

She added:

"The welfare system needs reform to make it simpler, more effective, protect the vulnerable and support people back into work – but the Tory-Lib Dem reforms are simply not fit for purpose. You can’t reform the system by cutting massive holes in the safety net.

"The UK Government must ensure adequate funds are in place to ensure genuinely vulnerable individuals do not become an easy target for Conservative and Lib-Dem cuts."