Clause 54

Welfare Reform Bill – in a Public Bill Committee at 9:10 am on 30th November 2006.

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Allocations from Social Fund

Question proposed, That the clause stand part of the Bill.

Photo of Danny Alexander Danny Alexander Opposition Whip (Commons), Shadow Spokesperson (Work and Pensions)

I am grateful to the Under-Secretary for that point of information. It is a lovely day in London, but not in my constituency in the highlands. Sadly, not everybody in this United Kingdom—long may it remain so—is benefiting from the weather that we are enjoying here.

Let me probe the Minister for a few more points of clarification. My understanding is that the purpose of the clause is to allow him more flexibility with regard to the allocation of moneys that can be used for social fund purposes and how they can be distributed at national and regional level. Does the measure also give flexibility as to the nature of grants and loans that may be given from the social fund? If it does not, is that something that he will look at again?

A number of organisations have made representations to me about whether there might be a case for making additional types of grant available through the social fund, over and above those that are currently allowed. I am well aware, as I am sure the Committee is, that the social fund is cash limited; it is used for precise purposes. In particular, the Child Poverty Action Group has proposed ideas such as using the social fund for a child development grant, payable at key stages in a child’s life, and a health and safety grant. In the early years of a child’s life, that might be particularly useful for key items in the home that are considered essential for a child’s health and  safety, such as a cot or bedding, or for the repair and replacement of gas and electrical appliances.

That organisation has also proposed the idea of an opportunity grant or allowance to assist claimants in getting back to work, recognising that additional costs might be incurred in that process. That would certainly be relevant to part 1 of the Bill. Currently, as the Committee knows, such payments can be made as discretionary payments through the adviser’s discretionary fund. However, that is not formally advertised or promoted, so it is not necessarily known to claimants unless the adviser makes them aware of it. The additional option of a specific grant within the social fund may be a way of getting around that.

The purpose of my questions is to elicit from the Minister whether the clause will give him the powers to make it clear that additional sorts of grant may be allowable under the social fund, and whether he has considered those ideas.

Photo of Wayne David Wayne David Labour, Caerphilly

The hon. Gentleman referred to representations that he received. Has anybody mentioned to him an experience that I have encountered? A number of people in my constituency who have made unsuccessful applications for a raft of benefits have been told to go for the social fund. The result is that the local office in my constituency is often almost inundated with phone calls at certain times of day. An individual will often have to try for literally two days before he gets a response on whether an application may be successful.

Photo of Danny Alexander Danny Alexander Opposition Whip (Commons), Shadow Spokesperson (Work and Pensions)

The hon. Gentleman raises an important point. The experience that he described has been shared by some of my constituents with regard to crisis loans. Both he and I were at the recent meeting of the all-party group on citizens advice, where Citizens Advice representatives reported that the experience was common to people living in many constituencies. The Minister may therefore wish to deal with the issue of timeliness. Given the nature of social fund payments, which are sometimes for emergencies, especially in the case of crisis loans, what steps are being taken to ensure that telephone lines are answered as quickly as possible so that people do not have the experience that the hon. Member for Caerphilly accurately described?

Within the social fund, what scope does the Minister have to allow additional categories of grant or loan? If he has such powers, is he minded to use them in a particular way, and if he does not, is he minded to take them?

Photo of Jim Murphy Jim Murphy Minister of State (Department for Work and Pensions) (Work)

We started in sunshine and, although there have been storm clouds over my right shoulder from time to time, we end in sunshine.

I am delighted to have this opportunity to respond to the debate on clause 54, having spent most of last evening reading the detail of clause 53.

Photo of David Ruffley David Ruffley Shadow Minister (Work and Pensions)

On a point of clarification, I thought I heard the Minister say “reading”, but of course he meant to say “re-reading”.

Photo of Jim Murphy Jim Murphy Minister of State (Department for Work and Pensions) (Work)

Sorry, I should have said “writing”.

We turn a little earlier than I had hoped, therefore, to clause 54. The hon. Member for Inverness, Nairn, Badenoch and Strathspey is right that the clause provides for flexibility in the allocation of funds for discretionary social fund payments. The clause makes it clear that there can be a single nationwide allocation from which loans may be made, so that expenditure can be controlled and managed centrally. A national loans budget, managed centrally, provides all loan applicants in Great Britain with the same treatment. That is crucial to the fairness and transparency of the budgeting loans scheme. In particular, it will ensure that all eligible applicants in the same circumstances will have the same amount of budgeting loan available to them wherever they live.

In response to the specific points that the hon. Gentleman raised, as he knows, the social fund already provides regulated grants for easily identifiable life events and situations such as maternity, funeral and cold weather expenses—be the cold weather in Inverness or elsewhere—as he fairly said. The case for further regulated grants needs to be considered in the context of increasing personal responsibility without encouraging worklessness. It is about getting the balance right. For most people, the main route out of poverty is the opportunity to work—work that pays and which, if sustained, leads to a career.

The hon. Gentleman was fair in pointing out that the clause gives a degree of flexibility within a national budget, which is how we want to allocate funds in future.

Photo of Danny Alexander Danny Alexander Opposition Whip (Commons), Shadow Spokesperson (Work and Pensions)

The Minister rightly referred to personal responsibility, and people’s responsibility to get back into work, which is, after all, a major feature of the Bill. My point is that the idea of additional forms of grant within the social fund to aid that process is at least worth considering. Likewise, in Committee, he has rightly often referred to the need to tackle child poverty. I argue that it would be useful, if possible, to restructure the social fund with perhaps more focus on that objective.

Photo of Jim Murphy Jim Murphy Minister of State (Department for Work and Pensions) (Work)

Of course, the hon. Gentleman is right. He shares our commitment to the eradication of child poverty, to which the Bill is important. We look forward to his party signing up to the 2020 target before 2020.

The hon. Gentleman raised the specific matter of flexibility, and made a fair point. He reasonably alighted on the fact that the clause contains the power to make different types of grant, and we continue to consider improvements to the social fund scheme, including possible reforms to the community care grant scheme. We have said publicly, and I say again for the record, that we are keen to discuss longer-term reform of the social fund with interested parties, organisations and Members of this House and the other place. The power in the clause is generally welcomed and builds on the progress that we have made on the social fund in recent years, such as lower interest-free loans and additional funding for the next three years of £210 million.

As I said, myself and the Under-Secretaries of State for Work and Pensions, my hon. Friends the Members for Stirling and for Warwick and Leamington (Mr. Plaskitt), are keen to have conversations with interested parties about the longer-term reform of the social fund, and the clause plays an important part in giving it flexibility.

Question put and agreed to.

Clause 54 ordered to stand part of the Bill.

Clauses 55 to 57 ordered to stand part of the Bill.