With the Crisis and Resilience Fund beginning in April, Ren Yi Hooi, CEO at Lightning Reach, explores how technology can help local authorities improve how they allocate financial support.

While the cost-of-living crisis continues to stretch households and individuals across the UK, up to £24bn in support goes unclaimed each year. Councils function as key lifelines for their constituents, providing access to financial help. Yet despite there being 20 million people in the UK who are financially vulnerable, there is a gap between the help on offer and uptake of this help.

Solving this gap is more pressing than ever, with the Crisis and Resilience Fund beginning at the start of April. Under this new scheme, people will be able to apply for emergency funds through their council, even if they do not currently receive benefits. This measure is aimed at providing breathing room for those in financial shock due to unexpected events like a broken boiler or sudden job loss.

For this scheme to be a success, local authorities must deliver accessible crisis and prevention support at pace, while managing reduced capacity, tight mobilisation deadlines and complex audit requirements. To meet this challenge, local authorities are turning to technology.

Barriers to financial access

Uptake of support at the local level is stunted due to misunderstandings around the nature of financial support itself and what is on offer. Stigma continues to exist around accessing financial aid, with many people choosing to suffer in silence rather than ask for help. Many people also assume that financial support simply means benefits. In reality, the landscape is far broader – from supermarket vouchers to grants for the families of travelling salesmen.

Narratives around who can access financial support are also misleading. Many people believe they must be deep in crisis to qualify for support. In fact, much of the support available, particularly the new crisis and resilience fund, can be preventative and aimed at helping people before things escalate.

Structural challenges

For individuals, financial support systems are typically fragmented across departments, services and external partners. As a result, those who need support face repetitive form-filling, handoffs and waiting weeks to get support. These processes are also often difficult to understand and complex for those lacking digital skills.

Additionally, local authorities often struggle to identify, prioritise and reach the residents who are most in need of support – while also hampered by time-consuming paperwork and administrative processes in processing applications for help. With multiple schemes transitioning across to the Crisis and Resilience Fund, this could add complexity in ensuring support is targeted towards the right people.

With limited budgets for direct funding, local authorities need to offer access to wider and more holistic support such as grants, benefits, savings on bills and other non-financial offerings to get residents on the pathway to resilience.

However, council teams have traditionally been forced to rely on manual directories of charities offering financial support or legacy technology systems. As a result, information is often out of date within months, with there being no way of knowing which organisations are still offering support or accepting applications.

These disconnected processes can lead to missed opportunities to help those in need and increased risk of fraud or duplication.

Technology filling the gap

Thankfully, change is underway, with technology transforming the financial support experience for councils and individuals alike. Beyond this, technology is also helping to improve councils’ delivery of their own support by allowing them to identify support, automate eligibility checks and allow for warm onward referrals without the need for extra paper checks or repeated information.

For example, open banking has played a key role in turning financial assessment processes from static document reviews into automated and auditable data-driven insights, providing councils with a real-time view of income, cash flow and spending. While traditional financial support systems require extensive documentation, such as proof of benefits, open banking enables local authorities to verify an individual’s financial situation in real time. This ensures only those who are eligible get support and makes the application more accessible for those who need help.

By transforming these processes and gathering the right data at each stage, local governments have better oversight of uptake, outcomes and impact, with auditing tools giving a full breakdown that allows reach and impact to be tracked.

Councils should see the Resilience fund as an opportunity to ensure they have systems that can deliver fair, accessible support and enable long term impact.