Why some Preston households will get 'Christmas gift' of up to £400 from the city council
Preston households whose benefits have been capped - including as a result of having more than two children - are set to get one-off payments this Christmas of up to £400.
The money will come from Preston City Council as part of a proposed package of support to help residents struggling with the cost of living.
Other suggested measures include extra cash for existing schemes that help people with bills for everyday essentials and housing, the introduction of free swimming for pensioners and those on low incomes and the cancellation of council tax for the terminally ill.
Councillors will be asked to approve spending £805,000 on the additional assistance - which also includes financial support for community groups and new funding for home adaptations for the disabled - at a meeting of the Labour-run authority next week.
Preston City Council leader Matthew Brown told the Lancashire Post that the move would “lift a lot of people”.
The funding to be set aside would cover the cost of the plans through until the end of March 2026. However, some of the help could be renewed and extended into the 2026/27 financial year if money can be found during the annual budget-setting process.
The Post understands the initial support package was drawn up with one eye on how to make best use of the city council’s reserves ahead of the authority’s expected abolition in 2028 as part of a government-ordered overhaul of the local authority landscape in Lancashire.
The Christmas payments for those subject to a benefit cap will be made on a sliding scale - starting at £50 and rising to a maximum of £400 - and will be determined by how much a household is deemed to have 'lost' as a result of the government limit on benefits that would otherwise have been due.
That includes the two-child limit, introduced in 2017, which means third and subsequent children do not attract the universal credit and child tax credit entitlements that may have been generated by their older siblings, a potential annual loss of £3,455 per child according to the Institute for Fiscal Studies. It also relates to the overall benefit cap which usually prevents more than £423 per week being claimed by couples - and single parents with children - and £283 by single adults.
Cllr Brown said that the extra support to be offered in Preston was intended to help ”tackle inequalities within our society”.
He added: “A lot of the issues we face in our community [are a result of] people having been battered by austerity, benefit cuts and cuts to services for too many years.
“Payments of between £50 and £400 for families who are losing large amounts of money are going to mean a lot to them at Christmas.
“So many people are struggling financially with the cost of living and we want to do our bit [with] something that people can actually notice.
“Our values as a radical Labour council [mean] we do want to redistribute wealth and [put] more money in the pockets of those on the lowest incomes.”
Preston City Council's reserves are forecast to stand at £14.8m by the end of the current financial year, before the new cost-of-living support is factored in. Asked whether the authority could now afford to be profligate in a way that might not be possible - or advisable - if its days were not numbered, Cllr Brown insisted that the council was not just seeking to burn through the reserves pot before biting the dust.
However, he said the authority will “spend some of our money on things that we want to prioritise locally”.
He also said that take-up of the programmes that are set to be funded until next spring will help inform those priorities in future, should similar packages prove possible to deliver beyond that date.
As to whether the support being offered to those affected by the two-child benefit cap in Preston was a hint to the Labour Party nationally to axe policy in government - which it has so far failed to do - the city leader said: “To be fair to the government, they are indicating that that, in some way, shape or form, change will happen.
“But we're really thinking locally [about] what our community has been through over the last 15 years. This is a very strong series of interventions which will support the most vulnerable who've felt for many years that politicians aren't usually on their side,” Cllr Brown said.
COST-OF-LIVING HELP
These are the 10 support measures Preston City Council intends to offer until the end of March 2026 - although actual delivery may go beyond that date - up to the budgetary amounts set aside for each:
Support for households affected by benefit caps
Payments will be made across four bands - with £50 for those losing up to £50 a week; £100 for those losing £50-£100 a week; £300 for those losing £100-£200 a week; and £400 for those losing more than £200 a week. Eligibility will be by application and based on presentation of benefit cap evidence. Only one application per household permitted between November 2025 and March 2026. Budget: £100,000
Support with food and fuel costs for low-income pensioners
A top-up of £80,000 to the existing government-funded Household Support Fund, to be targeted at pensioners on low incomes. Discretionary payments of up to £100 will be available. Budget: £80,000
Support with food and fuel costs for low-income young people and low-income unpaid carers
A small grant scheme to be targeted at young people who may be struggling with food, transport, housing or clothing costs; delivered via voluntary and community groups and funded by a top-up of £50,000 to the existing government-funded Household Support Fund. Budget: £50,000
Discretionary housing payments addition
A top-up of £100,000 to the current discretionary housing payments scheme operated by Preston City Council, which helps those on low incomes to stay in their homes - or find suitable ones - and for which demand currently exceeds available funding. Budget: £100,000
Disabled Facilities Grant addition
A top-up of £100,000 to the current disabled facilities grant scheme administered by Preston City Council, which enables the homes of disabled people to be suitably adapted so that they can continue living in them. The authority says the grant pot for Preston is under “real pressure” - with the number of applications exceeding the funding available from the government. The extra council cash will help tackle the waiting list of adaptations yet to be approved. The additional money will be allocated on a means tested basis for adults, as legally required, to ensure it reaches those low-income groups intended to be targeted. Home adaptations for disabled children are not means tested. Budget: £100,000
Free swimming
To be made available at the West View and Fulwood leisure centres to all groups that are already eligible for concessionary pricing – juniors, pensioners, students and adults receiving any type of income support (excluding child benefit). Monthly funding of £19,000 will be allocated between November 2025 and March 2026. Once the limit is reached each month, the offer closes. Any underspend from one month will roll forward to top up the following month’s pot. Budget: £95,000
Full council tax benefit for the terminally ill
Council Tax be waived if any person in a household is terminally ill. Entitlement will require presentation of a special form completed for terminally ill people by their GP, hospital or hospice. Budget: £45,000
Food bank and community pantries support
A further £45,000 to be allocated to local food banks and community pantries, using an existing mechanism agreed as part of the current Household Support Fund, together with an additional £20,000 for household goods and furniture. Budget: £65,000
Community grants
A fund to support grassroots initiatives to tackle poverty and build resilience in the most deprived communities of Preston. Budget: £100,000
Research into longer term interventions
Funding for an assessment of the effectiveness of different initiatives in tackling child poverty and long-term economic inactivity within households, to be undertaken by the Centre for Local Economic Studies. Budget: £70,000
***For each of the schemes above, a small proportion of the total funding may be needed for administration purposes, but this will not total more than eight percent of the proposed budgets and may be less.
Source: Preston City Council