From the TUC

The Welfare Reform Bill and the Social Fund: dumping on Councils

17 Feb 2011, by in Society & Welfare

One part of the Welfare Reform Bill wasn’t so widely trailed in advance: the abolition of the discretionary* Social Fund. Community Care Grants and most Crisis Loans will be “localised” and their future looks uncertain.

Community Care Grants provide support for people on low incomes facing exceptional problems or who need help to live independently in the community, such as people moving out of residential care. Budgeting Loans help people who can’t afford important one-off costs like clothing or a fridge. Crisis Loans help people deal with an emergency or disaster – like families whose house has burned down. They are also used to help people who haven’t any money at all and are waiting for their benefits – sometimes called ‘alignment loans’.

Clause 69 of the Bill says that all three are going to be abolished. Budgeting Loans and alignment loans will be replaced by an expansion of the rules on payment of benefits on account. According to Clause 98, the new rules will cover “cases of need” and the Explanatory Notes to the Bill say that this will include alignment loans. There will also be provision for payment on account in cases where “the payment can reasonably be expected to be recovered” – the Explanatory Notes say this will cover Budgeting Loans.

Community Care Grants and Crisis Loans are going to be ‘localised’ – local authorities are to provide “locally administered assistance”. The DWP Impact Assessment is remarkably open about how uncertain they are about what this will mean:

At this point the exact nature of the delivery systems LAs will use to administer the funds allocated to them is not known. However it is presumed that there will be an initial set up cost and ongoing costs to administer the provision. It is not known what costs will be incurred for the new provision.

The most worrying thing about all this is that it is very uncertain where local authorities will get the money to provide local assistance. The Impact Assessment says that the funding for Community Care Grants “will be transferred to local authorities and the devolved administrations” – but only for the Spending Review period. There is no mention of the funding arrangements for Crisis Loans or for what happens after the Spending Review period (finishes 2014/15).

Almost as worrying, I understand that there are no plans to ring fence this money – given the immense strains on local authority budgets over the next few years this is bound to mean reduced spending. In most Councils, responsibility will probably be handed over to Housing or Social Services Departments that are already making redundancies and trying to cope with a bigger workload than they can cope with.

Localisation will also mean that it will be much harder to get a sense of what is happening to this support nationally, or to establish minimum standards. The Social Fund Commissioner and the Independent Review Service for the Social Fund might have been able to, but the Bill abolishes them. As someone pointed out to me today, use the word “localism” and everyone nods sagely and applauds; the government is about to find out that the same people get very upset when it turns into a “postcode lottery” – which is just what awaits us in a couple of years’ time.

(*) The “regulated Social Fund”, including Funeral Expenses Payments, Sure Start Maternity Grants, Cold Weather Payments, and Winter Fuel Payments appears to be safe for now.

3 Responses to The Welfare Reform Bill and the Social Fund: dumping on Councils

  1. Tweets that mention The Welfare Reform Bill and the Social Fund: dumping on Councils | ToUChstone blog: A public policy blog from the TUC —
    Feb 17th 2011, 11:52 pm

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  2. Penny L
    Feb 18th 2011, 8:05 am

    It looks as though councils will be obliged to fund transport costs for people in residential care who are losing their DLA mobility money.

  3. Tacitus
    Feb 18th 2011, 8:17 am

    This isn’t the only problem with the Bill. The Guardian reported “…. Clause 51, for example, it contains proposals, as yet scarcely noticed, that seriously jeopardise the income of many disabled people. Consider a stroke victim, who may have paid national insurance for decades before incurring a severe impairment from which there is no prospect of recovery. If they have even a low-paid working spouse, the bill will cut their money off cold the moment that 12 months have passed.”

    Pretty outrageous by any standards!