Demand rises for emergency loans

Jobcentre Plus is refusing many loan applications despite a high demand

The amount of money set aside for emergency loans needs to be increased following a rise in demand of more than 40%, the Lib Dems have said.

Figures obtained by the Party show in the last year the number of people on low-incomes applying for the Crisis Loans rose to a total of 2.5m.

But in the last six months Jobcentre Plus has turned down more than a third of these - more than ever before.

The government said those in greatest need were getting their loans approved.

Lib Dems' Jenny Willott on the rise

The figures revealed by the Lib Dems showed that the number of applications for Crisis Loans in October was the largest in any month since the scheme was established.

In the last year, an extra 729,000 people applied for help from the government.

The political party said this was an early indication of how people on low incomes were affected by the economic downturn.

However, Jobcentre Plus turned down more applications in the last six months than it has done in the past three years.

During that period, it turned down an average 300,000, or 19% of all applications.

The Lib Dems believe this is because there are only limited funds now available and have urged ministers to ensure more money is put into the scheme.