Social Fund

Petition – in the House of Commons at 11:15 pm on 17th November 1992.

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Motion made, and Question proposed, That this House do now adjourn.—[Mr. Robert G. Hughes.]

Photo of Mr Jamie Cann Mr Jamie Cann , Ipswich

I think that I can safely say that this debate is not being televised. Given the number of Members present, I thought of cutting short my speech but as the Minister is present and cannot go until I have finished I have decided not to do so.

I was elected in April, so I bring fresh eyes to the social fund; they do not look very fresh at this time of night, no doubt, but in parliamentary matters they are. I did not know about the social fund until I was elected, and I have had to learn much since. The question that I want to pose is, does it achieve what the Government set out to achieve when they established it?

The social fund, as hon. Members will be aware, if we are still in the plural, covers by regulation a number of areas that I do not wish to consider tonight. I wish to consider two discretionary areas—budgetary loans and community care grants.

The aim of the social fund is to provide for exceptional and unexpected calls on household budgets that cannot be dealt with through the normal use of income support. It was stated that the Government wished the administration of the grant and loan to be more flexible and responsive to individual need, and with a minimum of formality. The question is whether it is more flexible and responsive, whether it offers the minimum formality and whether it copes with the exceptional and unexpected. I should like to share with the House three cases that have arisen in my constituency in the past few months that cast some doubt on that.

The first is a case of a budgetary loan. I shall call the person concerned Paul. In all three cases, I shall use an assumed name. If the Minister wants the proper names, I shall give them to him afterwards. Paul has a wife and five children. His total income from invalidity benefit is £136 a week, and after fixed costs the family of seven is left with £65 a week to cover food, toiletries, household expenditure, bus fares and so on. Paul and his wife asked for a loan of £200 to purchase shoes for their five children ready for the new school term. The response that he received was that The Social Fund Officer has decided after considering your application and your personal circumstances that your needs do not have enough priority and we cannot pay you the money you asked for. There is a limited amount of money in the Social Fund available for loans and grants and the Social Fund Officer has to decide when looking at individual applications which of them have the most priority. If children's shoes do not have sufficient priority it appears to me that not enough money has been put into the system.

At least Paul thought that he could afford to repay a loan. Those who cannot are utterly dependent on a community care grant. I will read out the criteria for determining whether someone can have such a grant. It may be awarded to promote Community Care … by assisting an applicant with expenses … where such assistance will

  1. (i) help that person or a member of his family to re-establish himself in the community following a stay in institutional or residential care; or
  2. (ii) help that person, or a member of his family to remain in the community rather than enter institutional or residential care; or
  3. (iii) ease exceptional pressure on that person and his family; or
  4. (iv) allow the applicant or his family to care for a prisoner or young offender on home leave; ".
That is admirably flexible, until we come to the case of Ray.

Ray is single. He got into trouble and was put in gaol. He has been out of gaol now for just over a year. He has gone straight. He is on income support but he has debts. The income that he can spend each week is £30. All the agencies have tried to help Ray—the probation service, the housing service, the social services together have helped to keep him straight. They got him a furnished bed-sitter and when it was found that there were a considerable number of undesirable people with him there—not his fault—they got him a flat. But he has not got a bed, a cooker, a fridge, a chair or pots and pans. He has walls, a roof and a floor.

Ray, on £30 a week, cannot repay a budgetary loan, so he applied for a community care grant. What happened? He thought that he would be all right under section (i), but the social fund officer said: I acknowledge that 'Ray' has had to leave accommodation that was unsuitable to his needs. He has however been living within the community for some twelve months prior to his application for a grant. There is no evidence … that he has not re-established himself during this time. So, no job, no bed, no furniture, no real income, but it is not, apparently, to be assumed that he has not re-established himself successfully in the community. I would say that he has not.

Ray has said that he is likely to have to return to care if a CCG is refused"— this is the second category.

I can see there to be no tangible prospect of such an event occurring. … It may be that he will have to give his flat up and seek alternative accommodation if he does not get the grant. He is not at risk, however, of having to go into some form of care. So he was ruled out on that as well.

What about the stress element—section iii? Ray is single and without family ties. The situation that he finds himself in has and is no doubt causing him pressure. Well, it would, would it not? An award of a CCG would, however, only assist him. It would not help anyone else. But the regulations say "the person and his family", so as it would not help anyone else, it would help only Ray, the tests set out in section iii are not met. So Ray does not get his grant.

That is how a supposedly flexible system has inflexibly damaged that young man. I do not believe that that is right and I am sure that the vast majority of people in this country do not believe that it is right.

Bill is another young man, who lives with his mother and his step-sister, who has a baby and another on the way. He is on income support. He has debts and cannot afford a loan. He wanted some money to buy a suit so that he could go for job interviews, because he has qualifications but he just does not happen to have any money. His application was refused. He said that he needed the suit because getting a job would mean that he could put more money into the family and could relieve the stress on the family. That argument was not accepted. The social security officials said that the only stress that would be relieved would be his stress, so the tests had not been met.

A young man cannot get a job because he cannot get a grant. A young man cannot sit at home although he is trying to go straight because he cannot get a grant. Yet the system is supposed to be flexible and adaptable to people's needs. It is not flexible or responsive. It is certainly not informal; it is bureaucratic. People cannot afford the loans and they cannot get grants. The system is more about budgets than it is about need, as I realise from the people who come to see me.

The system is hated by the people who are supposed to be able to depend on it in their hour of need and it is even hated by the people who have to run it. The system and the funding should be urgently reviewed.

Photo of Alistair Burt Alistair Burt Parliamentary Under-Secretary (Department of Social Security) 11:25 pm, 17th November 1992

I congratulate the hon. Member for Ipswich (Mr. Cann) on obtaining this Adjournment debate. I have listened carefully to what he said. Despite his apparently coming here with little knowledge of the social fund—I cannot believe that an experienced council leader in Ipswich has no knowledge of the social fund—he was able to outline not only his cases, but his general feelings about the social fund extremely well.

I shall deal with some of the hon. Gentleman's specific points. He will appreciate that I cannot discuss individual cases, although I am more than willing to receive from him details of the cases that he mentioned. It was kind of him to outline the circumstances without using the real names, and I appreciate that. If he wants to bring particular circumstances to my attention, I shall be more than happy to receive a note from him.

I hope, therefore, that I can provide some useful points in reply. As the hon. Gentleman will be aware, we undertake close monitoring of the social fund. From that, there is clear evidence that, despite the cases that the hon. Gentleman mentioned, the fund is providing extensive help for those who need it.

The hon. Gentleman spoke about budgets. The total cumulative expenditure on the social fund, including the regulated maternity, funeral and cold weather payments, now exeeds £1 billion. Since the start of the scheme, more than 1 million non-repayable community care grants and more than 5 million interest-free loans have been awarded.

We were pleased to note that a Policy Studies Institute report published earlier this year showed that social fund loans were a helpful source of interest-free credit for people on the lowest incomes.

By April 1994, the level of planned gross expenditure on the discretionary part of the scheme will have increased by 105 per cent. since the introduction of the scheme—greater than both inflation or any temporary increase in the number of people on income support. It should also be remembered that the social fund is just one part of the overall social security system which next year will cost almost £80 billion, equating to more than £11 per day for each tax and national insurance payer.

I recognise that the hon. Gentleman was concerned about expenditure and budgets, and I have even better news for him. I am sure that he will have welcomed the announcement on 2 November by my right hon. Friend the Secretary of State for Social Security of an £8 million increase to the 1992–93 budget. That means that this year's discretionary social fund budget, which is now at £310 million, has already increased by 36 per cent. since April 1991. That increase far outstrips the 5 per cent. increase in income support case load between May 1991 and May 1992.

There is even better news for social fund budgets for 1993–94. As my right hon. Friend the Secretary of State announced in his uprating statement, he expects the gross discretionary budget from April 1993 to be £340 million. That further substantial increase is possible, first, because of the continuing excellent performance on the recovery of loans, which shows the success of the loans system which enables more people to be helped by the fund; and, secondly, because of an increase of £5 million in the net budget. The cash limit has been increased from £130 million to £135 million from April 1993. Those increases mean that the April 1993 gross budget will be 12 per cent. up on the gross budget at April 1992 and 50 per cent. up on the gross budget at April 1991.

I am sure that even the hon. Member for Ipswich will agree that that increase in the cash limit, which comes at such a difficult time, indicates the Government's continuing determination to help those most in need through the social fund.

There is also good news for the hon. Gentleman closer to home, in Suffolk. It is absolutely clear that the hon. Gentleman's constituents have benefited from the increases in social fund budgets to which I have referred. I am sure that the hon. Gentleman will have welcomed the large increase of 18 per cent. in the social fund loans budget for Suffolk for 1992–93 as a consequence of the statement of 2 November to which I have referred. That increase is significantly above the increase in the income support case load for the same period. More significantly, if the hon. Gentleman looks at the overall increases in allocations for the past two years up to today, he will find that the grants budget in Suffolk district has increased by some 82 per cent. since April 1991, and the loans budget by some 75 per cent. in the same period.

Those figures speak eloquently of the Government's commitment to the social fund, and of the benefits that it has brought to the hon. Gentleman's constituency. The hon. Gentleman pointed out some of the difficulties; his remarks should be seen clearly in the context of the additional assistance already provided to his constituency.

Photo of Alistair Burt Alistair Burt Parliamentary Under-Secretary (Department of Social Security)

Such is my affection for the hon. Gentleman that I shall, of course, give way—if the hon. Member has cleared it with the hon. Member for Ipswich, that is.

Photo of Mr Jamie Cann Mr Jamie Cann , Ipswich

indicated assent.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I am somewhat alarmed by the thought that the Minister holds me in affection, but I shall ride my luck.

Is the Minister confident in his sunny predictions about the present situation? He will know that the Social Security Advisory Committee report and work by York university, commissioned by the Department, contain stringent criticisms of the way in which the social fund is operated, and suggest that in many cases it is impossible to define the difference between applications which succeed and those which do not. We all know of cases in which the cash-limited nature of the fund means that applicants are told that, although they qualify and have a certain measure of priority, it is just not possible to pay out and thus meet what is undoubtedly a real need. Can the Minister live happily with that state of affairs?

Photo of Alistair Burt Alistair Burt Parliamentary Under-Secretary (Department of Social Security)

My affection for the hon. Gentleman is undiminished and fully justified. With a telepathy not often found on the Opposition Benches, he has touched on the very point to which I was coming next—in relation both to the reports received on the social fund and to the budget itself.

Opposition Members should be aware that a number of positive points were made in both the main reports on the social fund this year—by York university's social policy research unit and by the Social Security Advisory Committee. Perhaps I may help the Opposition by referring to some of them. The SPRU report showed that many people are being substantially helped by the fund. Moreover—this answers the final point made by the hon. Member for Ipswich, which was somewhat over the top by his standards—so far from people hating the fund, there was a high degree of satisfaction among many groups who received awards. There is also a general acceptance of loans, and certain factors—such as having a lower income or more and younger children—are associated with receiving awards. Finally, community care grants are being focused on elderly people receiving disability-related benefits where a household member has a severe health problem. We are hitting the target much more often than Opposition Members would concede.

The positive points mentioned in the Social Security Advisory Committee's report include the good work done by social fund officers in their difficult job of making discretionary decisions. The effective immediate help provided through the fund for unpredicted events—for example, help to families returning home from the Gulf in 1990—was also commented upon favourably. The independence established by the social fund commissioner was also welcomed by the Social Security Advisory Committee. The committee also went on to accept the restriction of eligibility to those with little capital receiving income support, the need for reasonable financial limits at this time of constraint on public spending and the broad criteria on which budgeting loans were offered.

The reports make other proposals as well. As I have stated, we shall look at them carefully. It is important to note, as Opposition Members rarely do, that the endorsement of many of the principles of the social fund is significant in demonstrating that the fund represents an important leap forward from previous schemes.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I am grateful to the hon. Gentleman, but I do not want him to get away with that rather rosy image. I accept that positive points are made in both reports, but will he agree that they both recommend fundamental changes to meet fundamental criticisms? Can I take it from his remark about the reports being carefully considered that there is some hope that their major recommendations will be dealt with favourably by the Department?

Photo of Alistair Burt Alistair Burt Parliamentary Under-Secretary (Department of Social Security)

As the hon. Gentleman has been straight with me, I will be straight with him. Yes, indeed, there are positive aspects of the reports which I have been able to mention. If he is prepared to concede those, I acknowledge that other things in the reports cause us concern. They are being carefully considered. It is too early to say what the response will be, but the hon. Gentleman has it from me that the negative aspects mentioned in the reports are noted, and there will be a response in due course.

In the interests of balance, it is fair to recognise that in trying to administer a fund which caters for difficult and exceptional payments, it is hard to get the right scheme. We saw problems with the single payments scheme. This scheme has done much better than opponents would concede. The positive points that I have quoted are genuine and I am happy to acknowledge some difficulties, provided that some of the good points are recognised by the Opposition. If that happens, we shall have made progress.

In regard to budget limits, the hon. Member for Ipswich raised some concerns about the budget in itself. The budget is an integral part of the fund. The discretionary part of the social fund was designed as a flexible system for helping people, mostly those on income support, who have to meet large, intermittent or unexpected expenses. There are relatively few rigid rules as to what help can be given. We see the discipline imposed by a budget as a necessary framework for the exercise of how social fund officers apply discretion.

Most organisations—including the Government and, I suspect, also the Labour party—have to operate within an annual budget and there is no reason why the social fund should be different. Indeed, the previous rigid and inflexible single payments scheme suffered from spiralling expenditure, with the cost doubling every two years from 1980 to 1986, even allowing for inflation. This was out of all proportion to the increase in the number of people on benefit—less than a two thirds increase between 1979 and 1985. That expenditure was poorly targeted on needs, with four fifths of the money going to fewer than one in five claimants in 1987. It was therefore essential to refocus it on the greatest needs.

As to the points which the hon. Member for Ipswich made on community care grants, I appreciate that he mentioned particular cases and I look forward to receiving information about them. It would be inappropriate for me to comment on those cases. However, I am satisfied that the overall framework of the social fund provides appropriate assistance to those who need it, particularly in relation to community care grants. More than 1 million people have received community care grants since the scheme began.

The grants are intended to help people in priority groups, such as the elderly or disabled, to lead independent lives, including assisting them to re-establish themselves in the community after a stay in care, and to help people to carry on living in the community—the hon. Gentleman was right to illustrate some of the criteria—as well as aiming to ease exceptional pressure on families.

Local authorities, of course, have the major responsibility for community care, and community care grants complement that responsibility rather than replace it. It is, however, for the social fund officer to decide in an individual case whether the applicant's circumstances meet the basic eligibility criteria for a grant and then to decide whether the need is of sufficient priority to be met. I am confident that that is a suitable way in which to assess those exceptional needs in a flexible manner. There is a rapid and flexible system of review which also assists in dealing with those grants.

I am sure that the hon. Member for Ipswich will appreciate that some of the decisions taken by social fund officers in the situations that he described are taken in the most difficult circumstances. It is difficult at this distance to decide on such cases across the Dispatch Box. I am sure that, in the vast majority of cases, social fund officers apply themselves properly and carefully to the needs before the them. The fact that so many awards are made and so much money spent on the system shows that the Government and the system try to meet people's needs.

However, we are not simply content to consider the way in which the system has worked in terms of theory and principle and not consider improvement. We have made a number of operational improvements to the scheme which assist in dealing with some of the difficulties mentioned by the hon. Member for Ipswich. The operation of the fund has not stood still since the field work for the SPRU report that I mentioned earlier was completed. We are constantly considering ways in which to improve its administration and operation. In difficult budgetary conditions, one examines the administration of the benefit system to discover the most effective ways to deliver.

As we deal with people, we find that they want speed, efficiency and accuracy from the benefit system. They can be dealt with through improvements to administration. The social fund and those responsible for it have not been slow in coming forward with operational developments.

Those developments have included the continuing development of a major main frame computer system which will start to roll out early next year. That will be a major assistance to the fund. Secondly, all letters and forms used in connection with the social fund have been redesigned. That is not cosmetic: the way in which information is presented to claimants is important. Although some people claim that they find forms difficult to understand, the forms are carefully examined and researched. Those genuine and real improvements will help the constituents of the hon. Member for Ipswich.

A third development is improved guidance on local priorities. The hon. Gentleman referred to priorities. They are set and are difficult for the fund to operate. However, we are constantly looking at ways in which to improve guidance and particularly at local areas and their difficulties.

The fourth development is improved training for social fund officers. We all recognise the importance of training —no one more so than I—in the Benefits Agency. Finally there has been a recent major process review by the Benefits Agency which reviewed social fund delivery and administration.

Those improvements are only part of the changes, but they clearly show that the fund is under constant review and is continually responding to new pressures and the need to provide an even better service.

In responding to the problems that the hon. Member for Ipswich described, I hope that I have shown some of the ways in which the Benefits Agency and social fund seek to meet need. They will not always meet need as much as people want. Sometimes demand is not always equated to need. However, the determination of those who run the system and of the Government is to do their best to meet needs.

The social fund had a difficult origin in that the difficulties produced by single payments translated into the current system. It seeks to meet the needs of society flexibly. It is not always possible to create a rigid structure. No doubt there are similar cases to those mentioned by the hon. Member for Ipswich elsewhere where similar circumstances have been met by some form of payment. To try to create consistency over such a large system that has already £1 billion and approved 5 million loans has been extremely difficult. However, the search and the determination are always there.

When the Opposition consider the problems that the Government have to face, they seem to think that we are trying to be difficult to people in hard circumstances. I know that the Opposition Front Bench spokesmen are looking hard at the benefit system. I give them full credit for the way in which they are approaching their task, and they know that I do so generously. They will accept that we are not alone in Europe in studying the benefit system carefully and finding that it cannot meet all the demands that people place on it. As I said, demand is not always equated to need. Many other European countries also face difficulties in providing for one-off payments. Some make far less central provision than we do, relying more on local government provision and help from charities and voluntary organisations.

I hope that I am not being unfair, but I sometimes think that the Government do not get the credit that they deserve from Opposition Members, who find it easy to criticise and to be churlish but have no conception or understanding of running such a complex benefit system, of which the social fund is part.

In conclusion, I hope that my remarks have assured the hon. Gentleman that the Government are keeping the operation of the fund under constant monitoring, that we have already taken significant steps to increase the resources available to the fund, and that we shall continue to take any steps which we consider necessary to ensure that it continues in its role of providing assistance with exceptional needs for those experiencing the greatest difficulties.

Question put and agreed to.

Adjourned accordingly at fifteen minutes to Twelve o'clock.