The Independent Living Fund was a scheme whereby people with high levels of care needs were enabled to live independently, in their own homes rather than in residential care, through personal care being funded from central government.
Local councils have a responsibility to provide care for residents who have care needs, but in reality many councils are rationing this care and only providing it to those in the most desperate need - and then, only providing the minimum required. So someone who isn't incontinent, for example, may be put in nappies overnight rather than fund a personal assistant to assist that person with toileting.
Some councils are also looking at putting people into residential care if it would be cheaper to care for them there rather than in the community. (http://www.worcesterstandard.co.uk/2013/01/01/news-Legal-challenge-over-council%27s-care-cap-59039.html) The ILF has previously been used to top up people's care funding meaning disabled people could continue to live in the community.
Yes, it is councils' responsibility to provide social care, but the 
Coalition knows councils have shrinking budgets - they're the government
 providing those bloody shrinking budgets to the councils! All they're 
doing is going "Not my problem" about everything, and shoving it all 
onto other people's budgets. 
I think the Tories hide behind "localism", and know people 
will suffer as tasks fall to different regions to legislate, when 
dealing with some things nationally is realistically the only way to 
ensure fair access to those things. 
There are many people supported by the ILF - one woman is someone I know through work, Sophie Partridge, who has put a video together voicing her concerns.
Further discussions with people affected by closure of ILF: http://falseeconomy.org.uk/blog/people-affected-by-the-closure-of-the-independent-living-fund
The Independent Living Fund really did support some of those the Tories refer to as "the most vulnerable in society", people with incredibly complex care needs, who need 24 hour support. The Tories have closed it, and councils will be expected to pick up the tab, but the money is just not there.
How is this "supporting the most vulnerable"? As far as I can see it's just making those "most vulnerable" not their problem, passing the buck, handing over responsibility, and ultimately not giving a toss as long as their bottom line isn't affected.
Here is a letter from the DWP about the closure of the ILF:
"Thank
 you for your recent correspondence, raising issues arising from 
Government policies which are the responsibility of this Department. 
Government Ministers receive a large volume of correspondence and they 
are unable to reply personally on every occasion. I have been asked to 
respond to some of your points.
There
 are just over 19, 000 ILF users. There are approximately 13,000 users 
in England, 3,000 in Scotland, 2,000 in Wales and 750 in Northern 
Ireland. The average weekly ILF payment is £347. The most common use of ILF funding is to pay for personal assistants. 
There
 are approximately 3,000 Group 1 users (joined pre-1993). While many 
Group 1 users receive some support from their local authority, this 
input is not part of their ILF eligibility criteria. There are 
approximately 16,000 Group 2 users (joined in or after 1993). Group 2 
users have care packages which include a minimum contribution of £200 
per week from their local authority. 
94%
 of ILF users receive support from both the ILF and the local authority.
 Around 41% of these users receive direct payments from both the ILF and
 their local authority but under different eligibility and charging 
functions. Around 1, 200 ILF users do not have a known local authority 
contribution to their care package.
Having
 carefully considered all the responses to the consultation, the 
Government believes that closing the ILF in 2015, with funding devolved 
to local government in England and the devolved administrations in 
Scotland and Wales, is the best way forward. The significant changes in 
the wider system of care and support for disabled people mean that the 
care and support needs of current ILF users can, and should, be met 
within a single cohesive system. It is not justifiable to continue to 
support those disabled people who were ILF users when the fund closed to
 new applications, in a different way from other disabled people with 
similar needs. I can reassure ILF users that the Government remains 
fully committed to maintaining current ILF user’s care packages up to 
April 2015.
We
 believe that individual local authorities are best placed to provide 
locally tailored funding and services integrated around individuals’ 
needs through direct payments and personal budgets. Local Authorities 
already have a statutory responsibility to assess and fund the care 
needs of all disabled people – those who have been ILF users and those 
who have not. Over 18,000 existing ILF users already receive expert 
assessment and a contribution to their care funding through their Local 
Authority and discretionary ILF payments and have never taken precedence
 over this. However, operating the ILF in addition to the mainstream 
care and support system has duplicated functions and created unnecessary
 bureaucracy for both users and local authorities."
I don't find that letter satisfactory. It offers absolutely no assurance that people will continue to get the support they need to continue to live their own lives as we all have the right to.