The government is facing increasing anger over introducing a £500m fund for vulnerable families as it cuts Universal Credit payments.

The targeted Household Support Fund, announced on Thursday, will be made available to councils in October to help those who are struggling through small grants to meet daily needs such as food, clothing and utilities.

It is coming under severe criticism as it will be introduced as the £20 a week Universal Credit uplift, introduced during the pandemic, is ending today for the nearly six million people it has helped.

Charities and politicians have said the new fund will not help those most in need and will amount to only a fraction of what is required.

Scottish First Minister Nicola Sturgeon said it was an “insult” and a “disgrace” and promised every penny of the £79m Scotland will get will go to support low-income families.

“This is an announcement from the Tory government which is taking £6bn out of the pockets of the lowest income families through the Universal Credit cut, and is expecting praise for putting £500m back,” she said.

“It is an absolute disgrace and an insult.”

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Labour’s shadow work and pensions secretary Jonathan Reynolds said: “Temporary and inadequate sticking plasters are no substitute for a proper social security system that offers security to families in hard times.”

Anti-poverty charity, The Joseph Rowntree Foundation, called the fund an “11th hour attempt to save face as the government presses ahead with an unprecedented overnight cut”.

Deputy director Helen Barnard said: “The support available through this fund is provided on a discretionary basis to families facing emergency situations.

“It does not come close to meeting the scale of the challenge facing millions of families on low incomes as a cost-of-living crisis looms and our social security system is cut down to inadequate levels.

“By admitting today that families will need to apply for emergency grants to meet the cost of basics like food and heating through winter, it’s clear the chancellor knows the damage the cut to Universal Credit will cause.”

Action for Children said the £500m is a “fraction of what’s needed” and said it is an admission “the social security safety net does not meet basic living needs”.

Removing the £20 a week Universal Credit uplift has been opposed by six former work and pensions secretaries, charities, think tanks, teachers and MPs across the political spectrum.

Work and Pensions Secretary Therese Coffey said: “Over the last year, we have helped millions of people provide for their families. Many are now back on their feet but we know that some may still need further support.

“Our targeted household support fund is here to help those vulnerable households with essential costs as we push through the last stages of our recovery from the pandemic.”

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