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Crisis-hit Families Get Record £170m In Loans From Government

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The Government has paid out nearly £170million in interest-free Crisis Loans to families hit by the recession.

A record 1.7million loans were handed out in England and Wales in the 12 months to April 2009 – up 46 per cent on the previous year’s 1.1million.

The amount lent also increased dramatically, from £121million in 2007-08 to £167million in 2008-09.

The Tories called the increases a shocking indication of the state of the country and said the figures equated to one in every 13 households receiving help.

Crisis Loans of up to £1,500 can be sought by adults who are in dire straits and have no savings or other means of short-term help.

Introduced in 1988, they are available only in cases of ‘emergency or disaster’ and where they are ‘the only way serious damage or risk to health or safety of you or your family can be avoided’.

Examples of loans include funds to replace or repair an essential household appliance, such as a cooker, or provide basic living expenses for someone who is waiting for their first wage packet or benefit payment, or who has had all their money stolen.

Department for Work and Pensions (DWP) Crisis Loan assessors – whose ranks have swelled by 900 in the past year to 2,200 to cope with applications – consider each request, made via an 0800 freephone number or a printed form available online or in Jobcentres.

Loans are granted if people convince an assessor that their circumstances meet the criteria and they can agree a repayment plan.

No in-depth checks or home visits are made by the DWP.

All Crisis Loans – the average payment is just under £100 – are paid out by cheque and have to be repaid within two years.

Officials said the ‘vast majority’ of applicants were on benefits and that they have their loan repayments automatically deducted at source.

The most grants were awarded in the North West of England, where they rose by 69 per cent in 2008-09 to 407,500. In London and the South East, the number of grants rose 26 per cent to 395,100.

Conservative frontbencher Shailesh Vara, who obtained the figures, said: ‘These numbers are shocking. Crisis Loans are a last resort at times of great difficulty.

'That nearly 2.5million people applied for a loan in the past year and 1.7million were granted – the equivalent of one in 13 households – shows just how bad things have got for people.’

So there is a boom in crisis loans. At least we are over the worst and the jobless recovery is here.

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