Figures suggest 1,850 Oldham Borough people had crisis loans refused in first half of 2008

4.18.00pm GMT Tue 27th Jan 2009

Half a million people had their application for a crisis loan turned down by the Government in the first six months of last year, figures highlighted by the Liberal Democrats have revealed. This is more than were refused in the whole of the previous 12 months.

Of these, at least an estimated 1,850 were refused to people in Oldham Borough.

Applications for the loans, aimed at low-income families and pensioners unable to get credit elsewhere, rose by more than 40% last year to 2.5m. The figures come at a time when the Government is encouraging banks to increase lending.

The figures, contained in Parliamentary answers, show that:

• The number of applications for Crisis Loans has increased in 2007-08 by over 40% on the previous year: an extra 729,000 applications, or 2.5m in total

• The number of applications for Crisis Loans in October was the largest in any month since the scheme was established at 249,690

• However, in the first six months of last year Jobcentre Plus turned down almost half a million applications, over a third of all received

• This is more than it turned down in each of the last 3 years. In those years it turned down an average 300,000, or 19% of all applications

Commenting, Liberal Democrat Parliamentary Spokesperson for Oldham East & Saddleworth, Elwyn Watkins, said:

"People who apply for crisis loans are desperate and have nowhere else to turn, yet too often they get turned away when they should be getting help.

"There is a real danger that because this is a system for the poor it has been allowed to become a poor system.

"The Government has got to practise what it preaches to the banks and make more cash available to families through these loans, while Jobcentre staff must get their decisions right."