CRISIS loan funding for some of the neediest families in East Lancashire – totalling more than £3.5million – is set to be axed by the government.

Just 12 months ago funding for crisis loans, which were rebranded as care and urgent need grants, was slashed by more than a third.

But now from 2015 the Department of Work and Pensions has announced it will not be providing the Local Welfare Provision Grant – and insisted it must be paid for through general town hall funding.

County councillors and Blackburn with Darwen councillors are already facing making cuts of millions of pounds for 2015-16. County councillor Azhar Ali, health and wellbeing cabinet member, said: “The Conservatives have again slashed funding to Lancashire leaving our county with a further £3million black hole, on top of the £300 million in cuts we already face in the next four years. The plan to scrap funding for the Urgent Need Grant Scheme is putting communities in East Lancashire at risk.

“We are seeing record levels of residents, many of whom are in work, being forced into the queues at food banks and payday loan companies.”

Crisis loans or urgent need grants can only be used for essentials such as food, bedding, household needs and emergency transport costs.

County councillors have backed a cross-party letter questioning the funding cut, which was worth £2.9million in Lancashire in 2013-14 and £645,000 in Blackburn with Darwen.

And deputy county council leader Coun David Borrow said he will also lobby Local Government Minister Brandon Lewis to reinstate the grant when they meet at a network event next Monday.

A DWP spokesman said: “Councils will continue to provide support to those in their community who face financial difficulties or who find themselves in unavoidable circumstances. In contrast to a centralised grant system that was poorly targeted, councils can now choose how best to support local welfare needs within their areas – what is right for inner London will not be for rural Cumbria.

“Government continues to provide support to local authorities through general funds as part of the our commitment to reducing ring-fencing and ending top-down Whitehall control.”

DWP officials advise those in need to seek benefit advances or low-cost loans from community credit unions.