The Social Fund plays an important role in the Government's commitment to tackling poverty and social exclusion. It provides support to millions of people on low incomes, including some of the most vulnerable people in our society.
The Social Fund is continually under review and we have announced a number of improvements. For example, £90 million is being added to the Discretionary Social Fund budget over the three years to 2005–06.
We have recently announced that we intend to abolish the Budgeting Loan 'double debt' rule and reduce the standard repayment rate of 15 per cent. of a customers benefit to 12 per cent., from April 2006. These changes will make Budgeting Loans more consistent and easier to understand and the Social Fund more effective in assisting those families most likely to experience overindebtedness. To support these changes the Social Fund loans budget will be increased by £210 million over the three years 2006–07 to 2008–09.
The Government are also looking at ways in which more affordable loans can be made available to people on low incomes, and is seeking to work in partnership with the private and voluntary sectors to find ways of delivering these, while ensuring that the loans enhance the ability of people to manage their finances responsibly.
We will continue to look at ways in which the Social Fund can be made more effective and contribute to our vision of greater financial inclusion.