Three-quarters of councils will scrap or shrink support for England’s most vulnerable people if the Government cuts funding next year, leaders claim.

The Local Government Association (LGA) today warned against plans to ditch the £347m Local Welfare Assistance fund, used by town halls to provide emergency support for people facing homelessness, care leavers and families struggling to put food on the table.

A poll suggests loss of government funding would mean thousands could lose out on support including food vouchers, household essentials and short-term help paying the rent.

Some 15% of local authorities said they would have to completely scrap local welfare assistance schemes if funding was pulled.

Ministers have pledged to formally consult local authorities on the decision to discontinue funding from next April, which councils labelled an ‘important opportunity to reconsider’.

The funding was introduced in 2013 to replace government-provided crisis loans, with councils allocated cash from the £347m pot.

‘Taking away this money could prove counterproductive and risks storing up much bigger, and more costly problems in the longer run,’ said Cllr Claire Kober, chair of the LGA's resources board.

‘Thousands of people have been helped through local welfare schemes, which have been far more effective at getting support to those most in need than the Government crisis loans scheme which it replaced.

‘Councils will be doing everything in their power to support those who need it most, but with less money and fewer resources to work with this is going to become increasingly difficult. For some local authorities, where budgets are already on the brink, they will have no choice but to close their local welfare assistance schemes down altogether,’ added Cllr Kober.

A Department for Work and Pensions spokesman said: ‘The changes made to funding of local welfare provision were never about abolishing support and it’s a total misrepresentation to suggest they were. This Government has given councils more control because they understand best their local area’s needs – this is in contrast to the previous centralised grant system, which was inflexible and poorly targeted. We are now consulting on how funding should be provided for 2015/16.’