The government is to roll out a new £1bn-a-year support scheme designed to give people on low incomes direct access to emergency cash when they face sudden financial shocks.
The Crisis and Resilience Fund, which launches in April, will run for an initial three years and replace the temporary Household Support Fund that has been extended repeatedly since its introduction during the pandemic in 2021.
Under the new scheme, individuals will be able to apply for emergency payments through their local council, regardless of whether they are in receipt of benefits. Councils will be able to award cash support in cases such as a sudden loss of income, redundancy, an unexpected bill like a broken boiler, or where early intervention could prevent someone from falling into deeper financial crisis.
The fund represents a shift in how crisis support is delivered. Unlike previous schemes that relied heavily on vouchers, food parcels or referrals to food banks, councils will now be explicitly encouraged to provide cash payments. Ministers hope this will help meet a manifesto pledge to reduce what they describe as “mass reliance on emergency food parcels” by giving households greater flexibility and dignity in how support is used.
The Department for Work and Pensions has set out guidance allowing councils to use the funding in three broad areas: immediate crisis payments, housing-related support where there is a sudden shortfall, and longer-term resilience services, including funding for charities and local organisations that provide frontline assistance.
Although the overall level of funding broadly matches the previous Household Support Fund, some councils have expressed concern that it will not be enough to meet rising demand. A recent survey by the Local Government Association found most councils in England do not believe current funding levels are sufficient to cover local welfare needs, particularly as cost-of-living pressures persist.
However, the commitment to provide guaranteed funding for at least three years has been welcomed by local authorities and charities, as it allows councils to plan their support programmes more effectively rather than relying on short-term extensions.
Emma Revie, co-chief executive of Trussell Trust, said the new fund marked an important step forward. She said it could help ensure fewer people are forced to rely on food banks simply to get by.
Children’s charity Barnardo’s also welcomed the move towards cash-first support. It said enabling councils to provide direct payments, rather than vouchers or parcels, would give families greater agency and choice at times of crisis.
Some councils are already using similar approaches, distributing funds via Post Office cash vouchers or digital “pay-by-text” systems that allow people to withdraw money from cash machines quickly.
The new guidance gives councils flexibility in how they divide funding between crisis payments, housing support and resilience services, but they will be required to publish how the money will be used and open applications to the public by 1 April.
Equivalent funding will be allocated to Scotland, Wales and Northern Ireland, with devolved administrations free to decide how the money is spent in their own areas.
Minister for Employment Dame Diana Johnson said the fund would give councils the certainty they need to intervene early and prevent families from being pushed into crisis. She said the aim was to provide fast, practical help at the point people need it most.
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Government to give cash payouts to people in financial crisis