TEN MILLION Britons now live on income support and 60 per cent of new claimants are victims of unemployment, of whom many are white-collar workers. With people from this group approaching charities, and the 'traditional' poor turning to them in greater numbers because so much state assistance has been turned off, the pressure on the Family Welfare Association has increased dramatically.

'In 1988, with pounds 175,000, we had enough for grants for the whole year. Now we have pounds 750,000 and we run out in four months,' says Lynne Berry, director of the FWA. 'Not only is it the new poor but people who were once looked after. When one family lost all their belongings in a fire, they were told they were too poor to get a loan from the Social Fund.'

Like many other charities, the FWA is being contracted to provide local and health authority services. It fears that because the contracts are tightly defined this could limit its ability to respond to unmet needs. 'It is a great opportunity,' says Ms Berry, 'but the dilemma is how to hold on to our vision at the same time as chasing money, because with the recession few independent funds are coming in.'