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Spring Budget's Cost Of Living Support "Thin On The Ground"

Chancellor Jeremy Hunt announced an extension of the Household Support Fund in the Budget. (Simon Walker / No 10 Downing Street)

5 min read

Campaigners have said the cost of living support measures announced in Jeremy Hunt's Spring Budget fall short of what is needed to help households struggling with the cost of living.

The government extended the Household Support Fund for a further six months from April in its budget on Wednesday, after campaigners warned the end of the fund – which had been set to expire by April – would cut off a vital lifeline to households struggling with the cost of living crisis.

The fund, introduced in September 2021 to help vulnerable households struggling with rising energy bills and the rising cost of living, has been extended regularly since – and has so far been worth more than £2.5bn, distributed by councils on a needs based arrangement to help with essential costs like utility bills. 

In January, PoliticsHome reported that officials at the Department for Work and Pensions were asking the Treasury to extend the fund in the budget. 

"It was set up on a temporary basis and was due to conclude at the end of this month," Hunt told MPs during the budget on Wednesday. 

"I have decided that – with the battle against inflation still not over – now is not the time to stop the targeted help it offers. We will therefore continue it at current levels for another six months."

The budget also included an extension of the repayment period for Universal Credit repayments from 12 to 24 months, as well as abolishing the application fee for Debt Relief Orders.

However, while campaigners have welcomed the measures, they have expressed concern that the support does not go far enough to address the scale of the cost of living crisis, and that none of the measures are permanent. 

Rachelle Earwaker, senior economist at the Joseph Rowntree Foundation (JRF), told PoliticsHome even with the extension of the Household Support Fund, support for the cost of living was "thin on the ground" overall – and accused the government of a "short term patching-up" of its welfare system. 

"It's very welcome that it's being extended – but they're only giving councils three weeks notice... and they've only extended it for six months, but the Household Support Fund should always be there," said Earwaker. 

"In six months, we're probably going to be in the height of a general election, and we're going to be having another debate about it. We really wanted to see a permanent continuation of the support."

Earwaker added the JRF did welcome the changes to debt repayments, and abolishing the £90 charge on debt relief.

"It is very welcome that they are making budgeting repayments more affordable," she said. 

"That's definitely going to be a big improvement for those on repayments and we are definitely in favour of abolishing the £90 charge on debt relief orders, it's very welcome – you shouldn't be paying money to be in debt."

Richard Lane, Chief Client Officer at StepChange debt charity, told PoliticsHome while it was "encouraging" to see the Household Support Fund (HSF) extended for six months, it was "questionable how much things will improve in that time".

"Our advisors regularly speak to clients struggling to meet even the most basic needs, like getting a healthy meal and keeping the heating on," said Lane.

"Local support funded by the Household Support Fund is a crucial lifeline for them."

While the charity did welcome the increase in repayment times for Universal Credit advances, he said many claiming benefits are "still subject to unaffordable deductions from their benefits to repay other government debts".

Lane said they were "pleased" to see the announcement that the application fee for Debt Relief Orders (DRO) will be scrapped, something the charity had campaigned for. 

"When already facing financial hardship, fees to access solutions can be prohibitive in getting back on track and rebuilding financial security," said Lane.

“Today’s announcements are steps in the right direction, but further reforms are needed to reduce essential costs like council tax and energy.

"We have called on the government to commit to introducing an effective council tax support scheme and develop a social tariff for energy as soon as possible.”

Helen Barnard, Director of Policy at the Trussell Trust, the UK's biggest food bank network, said the charity was disappointed that the chancellor had only offered "temporary sticking plasters instead of long-term solutions to the crisis of rising hunger, hardship, and debt". 

“The extension of the Household Support Fund is only for six months. When it ends, councils and charities will be left scrambling to fill an even bigger gap," said Barnard.

"More people are likely to fall into unaffordable debt, be unable to afford essentials, and have no choice but to turn to food banks – who are already at breaking point.

“We are already seeing unprecedented numbers of people unable to afford essentials such as food, heating, and clothing, and are forced to turn to food banks.

"Today’s Budget will do little to change this in the years to come or prevent living standards falling even further in the coming year."

On Wednesday, the Office for Budget Responsibility (OBR) in its forecast said while living standards are now expected to rebound more quickly than previously estimated - with 2022/23 the largest year-on-year drop in living standards since the Office For National Statistics' (ONS) records began - they will not rebound to pre-pandemic peak until 2025-2026. 

A snap poll by Savanta shortly after the Budget found that 74 per cent of people surveyed did not believe the measures would help them with the cost of living. “Our research of initial reaction to the Spring Budget suggests to me that the public has made up their minds; the government's plan isn't working and the measures announced simply aren't enough," Chris Hopkins, Political Research Director at Savanta said.

"Rishi Sunak and Jeremy Hunt will have been hoping to have turned the dial on their electoral fortunes today. Based on our research, it looks like they have - they've gone backwards compared to four months ago, when they were already in a dire electoral position."

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