CASH grants to crisis-hit residents are set to be scrapped and shop vouchers or food issued instead, under new welfare reforms in York.

The number of people applying to the city's emergency anti-poverty fund has soared by 29 per cent over the past 12 months, but the Government is expected to withdraw funding next year, forcing an overhaul of the system. The changes will also mean restrictions on the number of times people can seek help and the types of people who can be helped.

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The council and Government say removing cash benefits reduces abuse of the system or inappropriate use of benefits. Many other councils have already made the switch and say some applicants withdrew request for help when they learned they would not receive cash, but charities have voiced concern in the past that vouchers can stigmatise people hit by poverty.

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City leaders say giving vouchers instead of cash can help ensure benefits are used as intended

The York Financial Assistance Scheme (YFAS) currently issues 'emergency' grants to cover expenses arising from an emergency or disaster and 'community' grants to help vulnerable people live independently. Grants are on pre-loaded cards that can be used at cash machines or in shops.

Between April and August, there were 1,587 applications to the YFAS, and the council expects to spend £450,000 this year.

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The council received £376,000 from the Department for Work and Pensions to run the fund in each of the past two years, and added £100,000 itself in 2013/14 and £200,000 in 2014/15, so the loss of Government money would mean the council's contribution fell short of demand.

New proposals include:

  • Limiting people to two emergency grants and one community grant in any 12-month period
  • Restricting community grants to only the most vulnerable residents meeting pre-set criteria
  • Providing benefits "in-kind" instead of in cash, by giving shop vouchers or food, or providing goods or services directly
  • Limiting items available through community grants to basic necessities such as white goods, beds and bedding, other than in exceptional circumstances (such as vacuum cleaner for someone with asthma)

The council will also work with South Yorkshire Credit Union to provide low-interest loans to people refused help by YFAS.

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In a written report to the cabinet, Di Bull and John Madden from the council's strategic welfare reform team wrote: "Without changes to the way it operates, the council cannot ensure that current budgets will meet the increasing demand evident in 2014/15, nor that underlying causes of claimant difficulties are addressed."

The authority plans to mitigate the loss of funding for 2015/16 by using £300,000 additional income raised through its controversial changes in council tax support, but it is unclear what will happen after next year.

There has been a small drop in the number of applicants citing debt as the reason for their plight, but the number citing "exceptional pressure" has doubled from 15 per cent to 30 per cent.

Single residents are particularly at risk, accounting for 58 per cent of applications so far this financial year, down although down from 69 per cent a year earlier. Single parent claimants account for 26 per cent, up from 18 per cent.

York Press: Dafydd Williams

Cllr Dafydd Williams, pictured above, council cabinet member for finance and performance, and leader elect of the council, said protecting vulnerable citizens was a key priority for the council and said: "If cabinet agrees the proposed changes to the Financial Assistance Scheme it will mean further and more targeted support for residents who need it most."

Alison Garnham, chief executive of the Child Poverty Action Group, said council-run welfare assistance schemes were a life-line for the most vulnerable people facing crisis, enabling people to flee domestic violence and youngsters to move on from homelessness or set up home after leaving care.

She said: "We very much hope ministers will see sense and overturn the decision to stop funding these schemes. It’s impossible to participate in ordinary life without money and when low income families need emergency help, like paying for travel costs for funerals or hospital appointments, they need cash.

"Refusing to fund these schemes centrally would create financial misery for many families; it would also generate higher long term costs in increased homelessness and the need for additional social services interventions.”

Where do applications to YFAS come from?

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