Welfare payments that are 'lifelines' for people being ‘hacked away’, MPs warn

New figures show more than £300m axed from funds that serve as 'safety net' for poor claimants

More than £300m has been axed from the discretionary social fund and flexible support fund, which can be awarded to poor claimants for a wide range of issues, figures show (Getty Images)

Welfare payments that serve as a “lifeline” for some people in the UK have been slashed in recent years, figures show, prompting MPs to warn that a financial safety net is being “hacked away”.

New statistics show more than £300m has been axed from the discretionary social fund and flexible support fund, which can be awarded to poor claimants for a wide range of issues.

Ministers have confirmed that £419.5m will be made available through the discretionary social fund next year, compared with £679.7m given out in 2010-11 – a cut of 38 per cent.

The fund is made up of interest-free budgeting loans, which are available to claimants of certain benefits to help them cope with the purchase of major items or services, such as replacing a broken freezer.

It used to include “crisis loans”, which would cover payments associated with serious risks, but these were abolished in 2013.

Money awarded through the flexible support fund, which goes towards helping claimants back into work, has meanwhile fallen from £115m in 2012-13 to £51m in 2016-17.

The Department for Work and Pensions (DWP) said it spends around £90bn on working age welfare and the changes were part of wider welfare reform, claiming this is “restoring fairness to the system”.

But Labour MP Frank Field, a former welfare minister and now chair of the Work and Pensions Committee, said: “Once, we had a universal safety net protecting everybody from destitution.

“Then we moved to discretionary payments which might prevent destitution. Now, that even more crucial safety net is being hacked away.”

Labour’s former shadow cabinet minister Lucy Powell, who uncovered figures showing that spending on the fund had fallen every year since 2012-13, said: “Funding from the flexible support fund can be a lifeline to some people, making the difference between a job and remaining out of work.

“With many people still unemployed, entrenched worklessness in some areas, and higher costs for some groups to get back into the labour market, the fund is an important tool to break the cycle of joblessness and provide extra support to help people get a job and keep it.

“It’s worrying then that the total budget for the fund has more than halved in recent years. If ministers really want to shift the dial on unemployment, they’ll ensure that there is adequate support for all those who need it.”

While the scheme was given a large boost in its budget in 2014-15 in order to meet travel and childcare costs to facilitate additional support for claimants, the DWP has since said there was a lack of demand and that year the scheme underspent by £87.3m against its budget.

A DWP spokeswoman said: “We’re committed to providing support for people who need it and spend around £90bn a year on working-age welfare, an amount that will continue to rise.

“Changes to discretionary benefits are part of our wider welfare reform which is restoring fairness to the system, supporting those who can into work and helping those who can’t.”