Social Fund

Work and Pensions written question – answered on 31 January 2005.

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Photo of Ms Oona King Ms Oona King PPS (Rt Hon Patricia Hewitt, Secretary of State), Department of Trade and Industry

To ask the Secretary of State for Work and Pensions what assessment he has made of the effectiveness of (a) Community Care Grants, (b) Crisis Loans and (c) Budgeting Loans in helping homeless people move from temporary to permanent accommodation.

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

There has been no specific study on the effectiveness of the social fund on helping homeless people move from temporary to permanent accommodation. However, we know from more general research that the discretionary social fund is used by people in these circumstances.

DWP research report 139 The use of the social fund by families with children" contains secondary analysis of the Families and Children study and the Family Resources Survey. This study found that moving home is one of the three main trigger events for social fund loan applications and the main trigger event for lone parents. We can guarantee a Budgeting Loan payment to help people in these circumstances, provided the applicant satisfies the eligibility criteria.

Community Care Grants (CCGs) are also available to help people with the cost of setting up home. In particular it is available to people leaving institutional care, families under exceptional pressure, and people taking part in a planned programme of resettlement. These can include former rough sleepers, families fleeing domestic violence and ex-prisoners. However, as the CCG scheme is discretionary and cash-limited, there can be no guarantee of payment.

We believe that the social fund provides valuable support to the poorest and most vulnerable people in society, including those in temporary accommodation, which is why an additional £90 million has been made available to the discretionary fund over the three years 2003–04 to 2005–06. This has allowed the Community Care Grant budget to be increased from £108 million in 2002–03 to £128 million for 2004–05.

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 customer's benefit to 12 per cent. from April 2006. These changes will make budgeting loans more consistent and easier to understand and access, and will improve the help available to those who are setting up home, in particular many of those who have outstanding social fund debt. To support these changes the Social Fund loans budget will be increased by £210 million over the three years 2006–07 to 2008–09.

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