Labour reveals £1bn plan to replace household support fund for poorest families

Chancellor Rachel Reeves has revealed long-term reforms to the lifeline household support fund as part of her spending review plans to lift people out of poverty.

Tucked away in the small print of her spending review plans, the Labour chancellor announced £1 billion per year to reform crisis support. That includes replacing the Department for Work and Pensions (DWP) household support fund, which was introduced in 2021 to provide emergency support to families struggling to afford food, energy and water bills or other essentials.

The first-ever multi-year settlement will transform the household support fund into a new crisis and resilience fund in a move that anti-poverty charities have been campaigning for in recent months.

The new fund will also incorporate discretionary housing payments – which local councils pay to people who are struggling to afford their rent or housing costs – and funding for local authorities. 

It will also give councils funding to help some of the poorest households feed their children outside of school term time.

The Labour government said: “This longer-term funding approach enables local authorities to provide preventative support to communities – working with the voluntary and community sector – as well as to assist people when faced with a financial crisis, to support our ambition to end mass dependence on emergency food parcels.”

Helen Barnard, director of policy, research and impact at Trussell, which has provided almost three million food parcels to people in need over the last year, said: “The chancellor is right to say that the cost of living is a continuing challenge.

“We warmly welcome the replacement of the household support fund with a new multi-year crisis and resilience fund, which Trussell has been calling for. We know this helps prevent people facing short-term crisis from being pushed to having to turn to a food bank.”

The household support fund has been extended several times and is currently set to expire next March.

Sabine Goodwin, director of the Independent Food Aid Network, said the fund’s replacement must make sure low-income households have access to cash support to stave off hunger.

“If we are to see a reduction in dependence on emergency food parcels, the universal availability of crisis support via cash payments alongside advice and support to prevent financial insecurity is critical,” saiid Goodwin.

“People living in English local authorities have been disadvantaged by a local welfare postcode lottery for far too long. The crisis and resilience fund has the potential to be transformative.”

StepChange’s chief client officer Richard Lane, said that the long-term scheme is a “big step forward”.

Resolve Poverty has also campaigned for a crisis and resilience fund in recent years and welcomed the move, alongside Labour’s commitment to extend free school meals to children in households receiving universal credit.

The group’s chief executive Graham Whitham said: “Today’s spending review provides some welcome relief for people experiencing poverty and local councils who are working in extremely difficult circumstances to support residents. The new crisis and resilience fund is a welcome replacement for the household support fund and we’ve been campaigning for a number of years for multi-year crisis funding for councils.

“While we await the detail and guidance, this is a positive direction of travel and an acknowledgement by the government that local councils need empowering in this area.”

Read more:

• Labour’s disability benefit cuts will force nearly half a million people to turn to food banks
• DWP extending hardship fund is welcome – but we need concrete, rapid actions to end poverty crisis
• PIP literally saved my life. Now I fear Labour’s benefit cuts will take it all away

But both Barnard and Whitham warned there is much more to do to help children living in poverty and their families.

Barnard said plans to cut disability benefits mean “disabled people on the lowest incomes will certainly not feel this government is on their side”.

Whitham added: “Today is also a missed opportunity to couple this good news with an ambitious and far-reaching child poverty strategy and to announce a raft of measures, such as ending the two-child limit on benefits that make eradicating child poverty a realistic prospect.”

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