Rachel Reeves is set to extend the household support fund, which is due to end next month and helps tens of thousands of households at risk of destitution with cash, food parcels, fuel vouchers and clothing.
The chancellor is understood to be looking at a fifth extension of the scheme, which was launched in autumn 2021 to allow councils to distribute small grants for essentials for people in need. The details of the extension have not been finalised.
The fund was extended four times by the previous government, costing about £2bn, and is a key funder of food vouchers to help struggling parents feed children during school holidays.
The Financial Times reported on Tuesday that Reeves was likely to agree an extension beyond 30 September when the fund is due to expire, partly as a way to soften the impact of the end of the winter fuel allowances for all but the poorest pensioners.
Charities have previously warned that the end of the fund would mean council-run local crisis support would disappear from nearly a third of English local authority areas covering 18 million people, including Birmingham, Bradford, Nottingham, Westminster, Croydon, Hampshire, Slough, and Stoke-on-Trent.
An End Furniture Poverty analysis reported by the Guardian found 22 councils had said they would discontinue the vouchers if the fund was not renewed, with a further 20 saying they were undecided, according to freedom of information requests.
The fund was originally introduced in 2021 to try to mitigate the impact of the government’s decision to reverse the £20 pandemic uplift to universal credit. The last government renewed the fund in March, but earmarked just six months of funding.
A government spokesperson said more details would be set out in due course. “We are absolutely committed to supporting pensioners and tackling the scar of poverty, despite the dire state of the public finances we have inherited.”
On Tuesday the prime minister will make a major speech setting out his plans for the return of parliament, promising to end “14 years of rot and a decade of decline”.
Speaking to an audience that will include teachers, nurses and businesspeople, Starmer will draw a contrast between his administration and that of Boris Johnson, under which the Downing Street garden was used to host parties during lockdown.
Starmer will say: “Next week, parliament will return. The business of politics will resume, but it will not be business as usual. Because we can’t go on like this any more. No more politics of performance, papering over the cracks, or division and distraction. Things are being done differently now.”
And in an attack on Johnson, he will say: “I wanted to invite you here today to show that the decent, hard-working people who make up the backbone of this country belong here and that this government is for you. A garden and a building that were once used for lockdown-breaking parties are now back in your service.”
Starmer is facing backbench pressure over Reeves’s decision on the winter fuel allowance as well as Conservative attacks on cronyism – including the appointment of Ian Corfield, a Labour donor, as a temporary director at the Treasury. Corfield has since downgraded his role to that of an unpaid adviser.
No 10 is also under pressure to say why it granted a No 10 pass to Waheed Alli, a Labour donor and fundraiser, who went on to host an event in the Downing Street garden with other Labour donors.
Starmer will say on Tuesday: “This government won’t always be perfect, but I promise this: you will be at the heart of our government and in the forefront of our minds, at the centre of everything we do.”
The Labour party chair, Ellie Reeves, said all rules had been followed in relation to donors and denied there was a growing cabinet split over the decision to cut the winter fuel payment. She told Sky News: “This is an incredibly tough decision, and not one that the chancellor wanted to be taking, but it’s because of the economic mess that we’ve inherited from the previous government.
“The cabinet are behind the chancellor on this. This is a decision that’s been taken by the chancellor, with the support of the cabinet. There aren’t splits on this.
“It’s a decision that no one wanted to be in the position to have to make. It’s not something that we wanted to do, but it’s something that is the responsible thing to do because of that £2bn black hole in the country’s finances.”
