A new national funding scheme will provide emergency cash support to people on low incomes across England, aiming to prevent short-term financial shocks from escalating into deeper crises. The Crisis and Resilience Fund will launch at the start of April and distribute £1bn a year for the next three years.
Local councils will administer the scheme, and they will be open to anyone facing financial difficulty, regardless of whether they currently receive benefits. Applicants will be able to approach their local authority directly for support, widening access beyond the traditional welfare system.
How the new fund will work
Under the new guidance, councils will be able to provide financial help where individuals or families experience a sudden and unexpected expense or a sharp drop in income. Examples include a redundancy, leaving an abusive relationship, or an unforeseen household bill that risks tipping someone into crisis.
The fund replaces the temporary Household Support Fund, which was introduced in 2021 and extended several times on a short-term basis. That scheme was due to end in March, creating uncertainty for councils and the organisations delivering front-line support. While the overall level of funding under the new scheme is broadly similar to the previous arrangement, the Government says the longer-term commitment will allow local authorities to plan more effectively.
However, some councils have expressed disappointment that the funding has not increased. A recent survey conducted for the Local Government Association found that most councils in England do not believe existing funding levels are sufficient to meet local welfare needs, particularly given the ongoing pressure from the cost of living.
Shift towards cash-first support
One of the most significant changes under the new fund is a stronger emphasis on direct cash payments. Ministers hope this approach will help deliver a manifesto commitment to reduce what they describe as “mass reliance on emergency food parcels”.
Instead of vouchers, food bank referrals or in-kind support, councils will be encouraged to give people cash, allowing them to decide how best to meet their own needs. The aim is to reduce dependency on crisis provision while restoring dignity and choice.
Emma Revie, co-chief executive of the Trussell Trust, said the fund marked an important shift in approach. She described it as a vital step towards ensuring that no one is forced to turn to a food bank simply to get by.
In guidance issued to councils, the Department for Work and Pensions said the money can be allocated across three broad areas. These include crisis payments for immediate hardship, housing-related support for people facing unexpected shortfalls, and resilience services to fund charities and local organisations providing preventive and advisory support.
There is no requirement for councils to divide funding equally between these categories, giving them flexibility to respond to local needs.
Council delivery and wider impact
Several councils already operate cash-first models and are expected to build on existing systems. These include Post Office cash vouchers and digital Pay-By-Text platforms, which allow recipients to withdraw money directly from cash machines. Charities argue that these methods are faster, more flexible and less stigmatising than traditional emergency support.
The children’s charity, Barnardo’s, said the shift away from vouchers and emergency food parcels towards cash payments could help millions of people currently reliant on Government or council-funded assistance. The charity emphasised that people in financial difficulty should have greater agency over how and where they spend support.
Lynn Perry, Barnardo’s chief executive, said the guidance sets out how crisis support can be delivered in a way that protects dignity, offers real choice and reaches those most in need. She added that the scheme has the potential to make a meaningful difference to children growing up in poverty.
In England, councils will be required to publish details of how they intend to use the funding and must open applications to the public by 1 April. A proportionate share of funding will also be allocated to Scotland, Wales and Northern Ireland, although devolved Governments will decide how the money is used.
Minister for Employment Dame Diana Johnson said the £1bn annual fund would give local authorities the certainty needed to provide timely emergency support and stop families falling into crisis in the first place.
Talk to us about your finances.
