Tens of thousands on handouts and forced to take payday loans

Poverty crisis hits the north of England.

More desperate people in the north of England are forced to take hand-outs to survive than anywhere else in the country.

A Sunday Post investigation has uncovered a region at breaking point, with tens of thousands forced to take crisis loans.

Our analysis of more than 300 councils in England has revealed the 10 areas with the highest level of breadline hand-outs are all in the north of England.

And the situation is set to get worse after the Government pulled the plug on funding for short-term emergencies, including being flooded, forced to flee a violent partner or sudden loss of income.

Critics claim the north of England has been abandoned.

Beth Farhat, Regional Secretary of the Northern Trades Union Congress, said: “These figures show many individuals across the north are in a desperate

situation, but given the savage cuts and impact on austerity it is no surprise.

“Rather than offer help to the most vulnerable the government is cutting back support for the poor while handing out income tax cuts for the rich.

“We are one of the wealthiest countries in the word and have a moral duty to help people and their families get back on their feet rather than watch them suffer.

“We desperately need a future beyond food banks, crisis loans and high cost credit.

“Ministers should focus on achieving prosperity for all not handing out tax cuts and tax breaks to affluent individuals who don’t need it.”

Blackpool had the highest rate of crisis loans in England, with 390 per 10,000 head of population during 2012-13.

Also among the worst hit areas was Middlesbrough, which was third highest with 322. Hartlepool was fifth with 286, South Tyneside was seventh with 272, Sunderland 14th with 244 and Darlington was 21st with 228.

In contrast South Cambridgeshire was the lowest with just 19 per 10,000 population, Hart in Hampshire had 28, Rutland had 30 and East Dorset 31.

Until March 2013 crisis loans were administered by Central Government, but last year English councils were allocated shares of a £178.2 million-a-year Local Welfare Assistance pot, to run schemes locally.

However, now it has emerged the Government has pulled funding for the entire scheme from next year, which will leave under-pressure councils to pick up

the bill.

Labour MP Emma Lewell-Buck who represents South Shields, which is among the worst hit in the country, said: “These figures are deeply worrying, but not surprising.

“Under the Coalition the gap between North and South has continued to grow, and increasingly people in my constituency are turning to food banks or crisis loans and, worryingly, payday loans.

“Government cuts have led to 1,200 public sector job losses in my local authority alone. Even those who have kept their jobs are seeing wages

failing to keep up with prices.”

A spokesman for debt charity StepChange, said: “People are often plunged into financial crisis through no fault of their own.

“Too often these people will fall into the arms of payday lenders.

“Government, business and charities need to come together and think broadly about the safety nets needed to protect those in acute financial difficulty”.

A Department for Work and Pensions spokesman said: “We’ve reformed the Social Fund because it was complex, over-centralised and poorly targeted, and replaced it with local provision to ensure this money goes to those most in need.

“We transferred the current annual funding for crisis loans and community care grants to local authorities and the devolved administrations.

“They received the full programme budget of £178.2 million a year in addition to administration and start-up costs of more than £72 million, which represents a fair settlement.”