Households struggling to meet the costs of food, heating and clothes this winter will be able to ask for money from a £500 million government fund.

But today's launch of the Household Support Fund - announced on the same day as the furlough scheme ends and as Universal Credit payments lose the £20 uplift - has been criticised by charities who say it is an 'admission' by ministers that the country's benefits system can't support people's basic needs.

The fund is being set-up by the government but money will be passed to local councils to help them keep struggling families afloat.

Money will be distributed in October to local authority staff who, ministers say, know their areas best and are most able to directly help those who need additional financial support the most.

This is likely to come in the form of small grants that families can ask for to help pay for essentials like food and heating, the costs of which are both expected to rocket as the UK enters the colder months.

Director of policy and campaigns at Action for Children, Imran Hussain, said announcing the fund just as other benefits and avenues of support are taken away from struggling families, shows the country's benefits support system is inadequate.

He said: “The announcement of this support fund is an admission that the social security safety net does not meet basic living needs.

“It would be far better if the main benefit for people on low incomes did its job and allowed them to afford basics like food, clothes and heating.

“£500m is a fraction of what’s needed, what’s been cut and what will be cut next month when £20 a week is removed from nearly six million families relying on Universal Credit.”

Supporting his comments is Helen Barnard, Deputy Director at the Joseph Rowntree Foundation, which works to solve UK poverty.

She said: “The Household Support Fund is an eleventh hour attempt to save face as the Government presses ahead with an unprecedented overnight cut to Universal Credit next week.

“The support available through this fund is provided on a discretionary basis to families facing emergency situations. It does not come close to meeting the scale of the challenge facing millions families on low incomes as a cost-of-living crisis looms and our social security system is cut down to inadequate levels. By admitting today that families will need to apply for emergency grants to meet the cost of basics like food and heating through winter, it’s clear the Chancellor knows the damage the cut to Universal Credit will cause."

The government says the Household Support Fund will simply 'bolster' support from the Warm Home Discount, which provides a £140 rebate on energy bills to 2.2 million low-income households in winter, and the Cold Weather Payment which provides £25 extra a week for poorer households when the temperature is consistently below zero.

Chancellor of the Exchequer, Rishi Sunak said: "Everyone should be able to afford the essentials, and we are committed to ensuring that is the case. Our new Household Support Fund will provide a lifeline for those at risk of struggling to keep up with their bills over the winter, adding to the support the government is already providing to help people with the cost of living."

The new fund, says the Department for Work and Pensions, will run over winter and homes unable to meet the costs of bills or necessary items such as warm winter clothing will begin being granted access to the money from October.

Anyone struggling to meet basic living costs and in need of support is advised to contact their local council for help.

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