Government failing on emergency hardship loans

August 17, 2009 10:38 AM

A Government-run emergency loans fund is failing to keep up with the surge in demand from families in urgent need of help due to the recession, figures uncovered by the Liberal Democrats reveal.

Figures obtained in a Parliamentary question show that over 330,000 calls to the Crisis Loan helpline went unanswered in the last year. More than two thirds of these came in the three months to May, as the rate of unemployment rose sharply.

The findings come on the back of The Social Fund's Annual Report which found that half a million requests for crisis loans were turned down last year after an increase of more than 40% in the number of applications.

Commenting, Liberal Democrat Shadow Work and Pensions Secretary, Steve Webb said: "People who apply for crisis loans are desperate and have nowhere else to turn. Too often they cannot get through or are turned away when they should be getting help.

"The Government has got to practice what it preaches to the banks and make more cash available through these loans to help families through hard times."

Newcastle East Lib Dem spokesman Greg Stone said "I know from discussions with local organisations in Byker that this is a concern in the East End, as personal debt and hardship increase during the recession. I am concerned that the Government is failing to assist those most in need of help."