A ground-breaking pilot loan scheme to prevent the ‘cycle of despair’ of homelessness has been backed by Bucks County Council.

The council’s cabinet has approved a recommendation to set aside £30,000 in loans for a ‘rent-in-advance’ scheme, which aims to help people who do not meet the statutory housing need criteria, but need support immediately.

The loans, accessed through a credit union, will help people pay a month’s rent in advance – something which is regularly asked for by private landlords.

It is then repaid over time and the money is recycled back into the system to help other people in a similar situation.

The decision to approve the scheme – which will initially help around 60 people in the county - comes after a three month inquiry by a group on behalf of the finance, performance and resources select committee.

Their investigation found that many people are blocked from securing their own tenancy because, despite being able to pay the deposit, they can then not find the cash for the first month which is usually required in advance.

Inquiry chairman Cllr Steven Lambert, in a speech to cabinet, recommended that a pilot scheme be introduced with two local credit unions.

The scheme would help approved people who would not normally meet the eligibility criteria because they do not have the 13-week history the credit unions expect.

Cllr Lambert said: "By working with partners such as the credit unions we believe that the scheme really will close that gap and close the circle of despair that people can find themselves in.

"We as an authority will be seen as a trailblazer and, as our recommendations set out, we can seek to address those with the highest level of complex needs and end that circle of despair, but with such a modest sum of money we could make a big difference.”

Cabinet members agreed it was a worthy scheme but questioned whether it was appropriate to spend £30,000 during the current spending freeze.

However, Martin Phillips, cabinet member for community engagement and public health, said it will not become ‘lost money’ because it will be paid back.

He said: “In terms of social value, for basically very little investment we are getting a lot return and it seems quite a clever way of using our money in a time when interest rates are so low.

"We fully support crisis support and in fact will allocate £50k to this and other crises that may occur in people's lives. This will be an interest-free loan over ten years."

The cabinet agreed to go ahead with the pilot scheme in principle from the next financial year in 2016 but will revisit it at the time in case the situation changes.

Crisis loans, which were previously administered by the Department for Work and Pensions, where people could apply to cover the cost of rent-in-advance, ceased to exist when the council took on the administration of the local emergency support.

This was primarily due to the fact the Council does not have the systems available to administer a loan scheme.

Cllr Lambert added: “Through our evidence gathering sessions, we have sought to find a solution to fill the gap created by the removal of these loans so that people who need access to money to pay for their rent-in-advance can do so in a timely way.”