A scheme giving out free money to Londoners has shown why the UK needs a Universal Basic Income (UBI), a new report claims.

The research revealed the cost of living crisis’ impact on ordinary Londoners, with some participants explaining that without the £50 a month payments they would have had to resort to begging.

Organisers say the small-scale project could be a blueprint for other local initiatives to help ease poverty in communities around the country.

A study looking into the scheme – due out next week but seen by Metro.co.uk – found that unconditional payments would ease the stigma felt by poorer people given handouts by the state or local authorities.

The pilot – which organisers claim is the first of its kind in the UK – saw 71 people accessing monthly payment to spend on whatever they want, without needing to meet any conditions.

Researchers – who piggy-backed on mutual aid schemes set up by the London Solidarity Fund Federation – crowdfunded the money they gave out.

They then studied what happened and interviewed participants to explore how a UBI might work in the real world.

The idea behind a basic income is to give everyone unconditional payments to spend on what they want and need, regardless of their wealth or circumstances, given everyone a safety net.

But even the most basic essentials in the capital cost far more than the monthly £50 handed out by the Basic Income Conversation for the trial.

Yet the organisation believes its findings highlight why a larger, nationwide scheme needs rolling out now, particularly as the cost of living spirals.

‘(A local) approach could be a way of making a real world impact while also making the political case for a national basic income’, the report says.

Participants only needed to be resident in certain London neighbourhoods and provide a proof of address to be given the money.

One explained that they often handed back tinned items given to them by food banks, while unconditional cash meant they could buy food they enjoyed eating.

Another, Bisi Dawon, who lives in East Ham, told Metro.co.uk that the extra cash meant she could buy her children more things to eat.

The Nigerian asylum seeker, a full-time carer for her special needs son, four, and 12-year-old daughter, has been in London for just under a year but has ‘no recourse to public funds’.

That status means the 40-year-old cannot open a bank account, forcing her to receive her £50 via the account of the hostel the family stay in.

Ms Dawon said that though limited, the cash was ‘very useful’ and at least ‘something’, which allowed her to purchase more detergents to wash her kids’ clothes and reduced financial strain.

But she is not convinced the government should roll a UBI because she believes wealthier people do not need it.

Ms Dawon argued: ‘It shouldn’t really be for everybody but largely for anyone that needs it, that’s what I think the government can do.’

She also wants a different system to resolve the problem of asylum seekers being unable to open bank accounts.

Many other recipients of the scheme also have no recourse to public funds and were mothers at crisis points, the researchers said.

‘People are currently being failed by our social security system’, the report found.

‘People are left without food to feed their babies, unable to pay essential bills.

‘They are in a position where access to £50 through a community project led by local volunteers is the only thing that stands between them and begging strangers in the street.’

Researchers conceded that the payments were different to a UBI, as they were not paid long-term or to everyone.

Critics of a basic income believe it would be too expensive to implement, discourage work and does not have wide enough support to be brought in.

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But the idea boasts an unlikely coalition of supporters stretching across the political spectrum, with advocates pointing to real-world studies suggesting it reduces poverty while increasing job satisfaction and living standards.

The report, which conceded that funding more local schemes would be a challenge, branded Universal Credit ‘inadequate’, months after the £20 uplift was cut.

They criticised how it requires conditions to be met to access the money, and the small amount of money it provides.

‘It was clear how detrimental having no recourse to public funds was for the people who expensed the funds’, the report added.

‘It seems key that a basic income (cannot be) classed as public funds if it is to address this issue.’

Another recipient, Farrah Janudi, hit out at the hoops she has to jump through to get Universal Credit.

The mum of four said: ‘I have an autistic child and I’m trying to get a job or restart my business, but I’m still required to go to the job centre every week.

‘They want so much of my time just because they give me this payment at the end of the month.

‘Even when you get help from the council – like if the council send money for gas – they will send me a voucher with a little text message saying you cannot exchange this for cash or anything else. I’m like, “Okay, thank you for infantilising me, making out to be like a child.”’

She compared that to a ‘respectful and useful’ unconditional payment.

Researchers found the cash made a big impact to many people, including one anonymous participant who would have been unable to buy either electricity or ‘food for my children’.

Going forward, Ms Janudi wants an unconditional scheme scaled up to a national level.

‘Once we start excluding people the list of people who are not qualified can only get bigger and bigger’, she argued.

‘A lot of things here in the UK are built on “you’re not entitled to this” – a lot of systems are built on exclusion already.’

The co-founder of the Basic Income Conversation, Cleo Goodman, agreed, explaining: ‘The conversations we had really showed the extent of the cost of living crisis.

‘People are suffering and although cash payments like these or any form of basic income wouldn’t solve this completely, we see here the difference they can make.

‘These community-led projects make a big difference but to meet the current need we need something much bigger: a basic income at national level.’

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