Household Support Funds: A Disbursements Guide for Local Councils and Charities


With an unprecedented number of UK households being affected by the cost of living crisis, and an estimated 97% cutting back on what they buy to make ends meet, it's never been more important for local authorities to have a quick and easily accessible process in place for the disbursement of official funds for emergency welfare.

Whether it's to heat their homes, contribute towards their rent, or ensure families are fed, our team has conducted research to understand more about the economic impacts for those who receive the funds and the public sector organisations that deliver the financial relief.

Using the data, our team of alternative-payment experts have created A Fund Disbursements Guide for Local Councils and Charities to ensure the distribution of funds can happen in the most efficient, fast and hassle-free way - for public sector organisations and the beneficiaries.

As a Senior Government official interviewed for our study said: "We need to act quickly and find ways to get support out of the door to those that need it most."

Read on to discover a breakdown of the key findings of our research and recommendations on how you can reduce funds and the administrative burden as you disburse funds to your beneficiaries in need.

How do your beneficiaries like to receive funds?

As a local authority or fund manager, you want to ensure that the disbursement of hardship funds creates a positive experience for both your beneficiaries (quicker to receive and easier to use) and your team (lower costs and less admin).

That's why our research focused on the impact of modern payment mechanisms to support people in need over traditional time-consuming and complicated methods such as cash, cheques, and BACS.

Here's a breakdown of what's most important to your beneficiaries when they receive support funding.

Speed

Perhaps unsurprisingly with personal expenses at an all-time high, the number one priority was the speed of access to official funds. Of those we spoke to, vouchers were ranked as the best payment method with 30% of recipients receiving them within one or two days. Just 11% reported having to wait over two weeks for their vouchers, compared to 17% who waited two or more weeks for cash payments.

Ease of claiming

With the primary goal being receiving support quickly and easily, 81% of those that need it agreed that ease of claiming was essential. Due to their convenience and relative lack of administrative steps for a donating organisation, vouchers were considered an easy way to claim support by 71% of respondents.

Choice

Support payments are used in a variety of areas including food, rent, and utility bills. Freedom of choice, therefore, is an integral element of how beneficiaries want to receive support. 84% want some level of control over what the support can be spent on, which is why the overwhelming majority of voucher recipients were happy with the range of spending options on offer to best impact their lives.

Ease of spending

Those on low income or benefits feel that the support given to help them through the cost of living crisis should be easy to spend. With just 7% of participants believing them to be very or fairly hard to spend, vouchers were, once again, the payment mechanism of choice for the majority of those surveyed, ahead of cash, pre-loaded bank cards. and cheques (which had the most negative reaction).

Where do your beneficiaries spend their funds?

Knowing where your beneficiaries are choosing to spend their funds can help you select a payment mechanism that is most useful to them. For that reason, our research also asked people how the economic impacts have affected the way they use the support they receive.

In first place was food and supermarket items (66%), swiftly followed by utility and other vital bills, such as electricity, gas, water, and car insurance (56%). Further uses of support payments included:

  • Rent (26%)
  • Clothing (23%)
  • Household items and personal property e.g. furniture, appliances, and electronics (22%)
  • Travel and transport costs (15%)
  • Activities, entertainment, and holidays (9%)

What challenges are you - the local authority - facing?

As the cost of living crisis continues (and worsens), the sheer volume of disbursements to process can seem overwhelming. Traditional, slower methods of distributing funds (e.g. cash and cheques) are only compounding the pressure, plus they have varying degrees of cost-effectiveness due to transaction fees, indirect costs, and additional requirements.

Many local authorities revealed that, without a dedicated team in place to manage the process, they weren't geared up to deal with the admin-heavy disbursement of funds. One local authority councillor we spoke to highlighted the time-consuming consequences of incorrect financial information: "We did have several bank rejections as the correct bank details were not entered on the form correctly."

To alleviate the challenge, some local authorities had found it helped significantly to use a third party provider to disburse payments via vouchers and/or prepaid cards. The minimal administrative costs to public sector bodies mean that disbursement schemes allow the maximum funding to be passed on to those in need.

Helping you distribute funds further and faster

Our Payments for Good initiative is designed to support local authorities, non-profits, and charities with a cost-effective and speed-efficient payment mechanism. In the past 12 months alone, we've helped to disburse over one million vital fund payments to people in need - £250 million of emergency aid across the world and £90 million in the UK.

Here's a quick overview of how it works.

  • First, our expert team gets to know your type of organization, your beneficiaries, and how we can best support you
  • Then, we create a bespoke distribution solution based on your needs and set about putting the process in place

We distribute funds through gift vouchers, prepaid cards, and digital codes that can be used at all major supermarkets and retailers. This gives your recipients the speed (funds can be received within 24 hours of payment), choice, and ease of spending they desire.

Gift vouchers

The speed, ease of use, and wide choice of retailers make gift vouchers the most popular disbursement method for both local authorities and recipients. There's no distributing funds cost and you can also have some control over where, how, and when the funds are being spent as the vouchers can only be redeemed with retailers who are part of the scheme.

Prepaid cards

These cards do away with the need for a bank account and, like the vouchers, do not hold any sensitive information about the recipient. They can be used to purchase essential items rather than getting lost paying off debt and can be used both in-store and online where normal debit and credit cards are accepted.

Personalisation, audit trails and reporting

Using our disbursement solution can lead to a reduction in your admin and processing of bank transfers and the elimination of transfer fees. As no cash is given, you will also benefit from an improved audit trail and a clear visibility of spend so you can track the key areas of need. Plus, you can customise the vouchers and cards and send personalised messaging.

You're in safe hands with the Voucher Scheme Framework

As a Crown Commercial Services supplier on the Voucher Scheme Framework, Blackhawk Network is perfectly placed to support you with the distribution of vital funds (via vouchers and prepaid cards) to your beneficiaries.

Our global experience in gift vouchers, prepaid cards, and digital codes means we have the process and internal controls in place to help you make the most positive impact on your local community and recipients.

We've already partnered with 30% of Local Authorities to distribute hardship funds including Bedford Borough Council, Bracknell Forest Council, Devon County Council, Southampton City Council, and various London Borough Councils. We'd love to add your local authority to the list.

Want us to help you distribute your funds further and faster?

Working together we can help alleviate the resources and costs of fund disbursement whilst giving your beneficiaries speedier support, more choice, and ease of spending.

For a more in-depth look into the insights uncovered by our latest research, you can download our Payments for Good eBook here.

Plus, to find out more please get in touch on 0207 419 8191 or contact us at enquiries@bhnetwork.com

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