FAMILIES across west Oxfordshire who have been hit hard by the recession could be eligible for interest free loans of up to £5,000 to help them get back on their feet.

West Oxfordshire District Council has been given £38,000 by the Government to help people at risk of homelessness and mounting debt, in what is Oxfordshire’s first fighting fund for the hard-up.

The Homelessness Prevention Fund will directly help people who face losing their homes.

Last night Oxford Nightshelter, which helps people across the county who have lost their homes, hailed the scheme as a great idea.

Homeowners can apply for interest-free loans of up to £5,000 to ward off the threat of bankruptcy.

When the money is repaid, it will be made available to others.

Money will also be used to help tenants in social or private-rented housing who are struggling with rental payments and face eviction.

West Oxfordshire district councillor Jill Dunsmore, cabinet member for communities, said: “We welcome this scheme during these difficult economic times, and hope this will provide assistance to help people stay in their homes.

“This fund is the latest homelessness prevention measure to be introduced to support people who have been affected by the recession.”

Oxford Nightshelter chief executive Lesley Dewhurst said the fund would help “nip the problem of homelessness in the bud”.

She added: “It is the first I have heard of such a scheme, but anything which helps reduce the likelihood of people losing their homes has to be a great idea.

“This money could help stop the downward spiral that many homeless people can find themselves in.

“Their mental health can suffer and, very often, they develop addictions to compensate for their problems.”

West Oxfordshire Citizens Advice Bureau (CAB) will be administering the fund on behalf of the council.

Barbara Shaw, the manager of the CAB’s Witney branch, said: “People are facing losing their homes over what are really small amounts of money.

“For the sake of just £1,000, in some cases, these families can stay where they live and avoid the knock-on effects of homelessness, which can be devastating.

“It is a short-term fix for people who, in a few years time, will be back on their feet once again.”

Richard Mills, West Oxfordshire District Council’s housing allocations manager, said the council was working with agencies like the CAB to help individuals.

The council has pledged a further £5,000 to help the CAB with its initiatives to prevent people becoming homeless through financial difficulty.

Loan applications will be dealt with on a case-by-case basis.

Anybody who feels they may be eligible for help should call 01993 861010.

dhearn@oxfordmail.co.uk