EMERGENCY loans for people in need in Bolton, and grants for the vulnerable, will be scrapped and replaced with a new scheme offering goods and services instead of cash.

The Government has axed its crisis loans, which provide money for emergencies such as fire and flood damage, loss of money through theft and to buy essential food items.

It has also scrapped Community Care Grants (CCGs), which are available to help homeless people secure new housing, provide a financial boost to people leaving residential care, or to help someone fleeing domestic violence.

A report to Bolton Council said its new scheme — financed by the Government and which will come into effect in April — will make use of food banks and furniture recycling centres rather than providing money, although it said there may be circumstances where “small cash payments” may be required.

The report also said anyone submitting a claim for help would be expected to work with the council’s financial advice services.

Council chiefs approved the creation of two schemes — a Local Emergency Support Award for people who need short-term help and a Local Community Support Award to help people live independently.

Under the first scheme, instead of cash, people could receive nappies, baby milk and food, as well as help with travel costs.

Awards under the second scheme could include beds, heating appliances, fridges, cookers and furniture. The scheme would also see the council underwriting loans from credit unions.

Awards would be means-tested and would take into account personal savings.

Claims will be made over the internet, although anyone without internet access will be given help with an assisted telephone claim, the report said.

The council will be given just over £1 million a year for the next two years — less than the Department for Work and Pensionspends in the borough — with no guarantee of funding after that. The council will create a new team consisting of five staff to administer the schemes. Cllr Nick Peel said: “This is a cut dressed up as localism. One of the very worrying things is the fact this funding isn’t ringfenced.

“That’s terrifying as not all councils are as enlightened as us and some might take this money to keep council tax down.”

Bolton Conservative leader Cllr David Greenhalgh said: “The Government is damned if it does and damned if it doesn’t. This is an example of how localism has given back to the local authority money to use and spend as we want.”