City's £1m to help people in cash crisis

A POT of cash worth nearly £1 million will be available to people in Derby facing serious hardship in the next financial year.

The Government currently provides a "social fund" for the work, administered by JobCentre Plus on behalf of the Department for Work and Pensions.

But it will hand the running of most of this service, and cash to pay for it, to councils from 2013-14.

The Government has provided Derby City Council with £986,595 for that period, having spent £941,600 on people in the city through the scheme in 2011-12.

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It had not told authorities that they had to spend the money on replacing its fund, and some have chosen not to do so, but the city council will replace it with a new "local assistance scheme".

Councillor Sarah Russell, cabinet member for finance, said: "Some councils are not running a scheme because the cash was not ring-fenced.

"But we were always going to use it for that purpose because we understand the residents of Derby are having a difficult time in the economic situation we find ourselves in."

She said the council aimed to improve the system by signposting people who were turned down for funding to other services that could help them, such as the YMCA.

The DWP provides three types of pay-outs under its social fund. One is non-repayable grants used to help vulnerable people return to or stay in their community.

Another is interest-free crisis loans for things like living expenses, items damaged following a disaster, and "alignment payments" to meet an urgent need while waiting for a decision on a new benefits claim or for wages to be paid. Both of these services will be run by the city council from April.

The third, known as budgeting loans, is normally used for replacing vital goods or other household items and will still be run by the DWP. But if someone cannot establish that they would not be able to pay back the loan within six weeks, they would be passed on to local authorities to help.

Miss Russell said people eligible for help from its scheme "could be anyone as long as they can establish hardship".