Household Support Fund Scrapped as Labour Unveils £1bn Replacement in Major Welfare Overhaul

A major change is coming to one of the UK’s key financial aid programs. The Labour government has decided to wind down the Household Support Fund and introduce a new long-term replacement. This marks a shift in how emergency assistance is structured.

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Household Support Fund update
Household Support Fund update. credit : shutterstock | en.Econostrum.info - United Kingdom

The Labour government has replaced the Household Support Fund with a new Crisis and Resilience Fund worth £1 billion annually. The move is part of a broader strategy to refocus welfare spending and deliver targeted assistance to households at risk of falling into poverty.

Chancellor Rachel Reeves outlined the change in her recent Spending Review, stating the new fund will provide a more structured, long-term response to financial hardship. According to the Treasury, the scheme is designed to support families in crisis while also addressing systemic vulnerabilities in the UK’s social safety net.

The fund’s introduction follows sustained pressure from anti-poverty organisations, including the Trussell Trust, which has long advocated for a multi-year support model. In its submission ahead of the Spending Review, the charity called for a replacement of short-term schemes with a more stable, better-resourced mechanism to reduce the need for food banks and emergency interventions.

Shift in Government Strategy Towards Long-Term Welfare Planning

The Household Support Fund, introduced as a temporary measure during the pandemic and cost-of-living crisis, will be phased out by the end of the current spending cycle. 

Its successor, the Crisis and Resilience Fund, will be backed by £1 billion annually, including contributions from the Barnett formula for devolved administrations, according to official documents.

The government aims to provide more consistent assistance through this new fund, which is expected to operate on a multi-year basis rather than rely on short-term renewals. According to the Treasury, the programme will work alongside the Healthy Start scheme and other direct interventions targeted at low-income households.

By embedding the fund into long-term spending plans, ministers say they aim to improve predictability and reduce administrative uncertainty for local councils distributing support. The shift also reflects growing consensus that reactive short-term funding cannot adequately address chronic poverty or financial vulnerability.

Reaction From Anti-poverty Groups and Local Authority Implications

The Trussell Trust, a leading UK food bank network, responded positively to the announcement.

Helen Barnard, the charity’s director of policy, stated:

“We warmly welcome the replacement of the Household Support Fund with a new multi-year Crisis and Resilience Fund, which Trussell has been calling for. We know this helps prevent people facing short-term crisis from being pushed to having to turn to a food bank.”

Despite the positive reception, the charity warned that the fund alone is not sufficient. In particular, it highlighted ongoing concerns around Universal Credit, the two-child limit, and the adequacy of disability benefits. Barnard added that 440,000 people could still face “severe hardship” unless broader reforms to the social security system are enacted.

Local authorities, who previously relied on Household Support Fund allocations to plug gaps in emergency services, will now need to adapt their operations. While the new fund’s multi-year nature is expected to enhance stability, implementation details remain limited and are expected to be released in upcoming policy guidance.

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