Select Committee on Social Security Minutes of Evidence

Examination of Witnesses (Questions 260 - 279)



Mrs Humble

  260. Have you found that sometimes Social Fund claimants are looking to social services departments to make up the difference, if they are not actually given their loans or their grants? You have mentioned discharge arrangements and community care clients but there are also families with children, and social services departments, I understand, still have a residual responsibility, and can, in certain circumstances, provide financial aid. Are you finding that claimants are coming to social services departments to make up that difference, and how serious a problem is it?
  (Mr Calder) Can I say something about that? It is not just the question of topping up a payment from the Social Fund, actually it may be fully replacing it, when people are actually turned down. And the interesting thing is that social services making payments is that, Section 17 of the Children Act 1989 only stresses that payment should be made in exceptional circumstances, and I think the introduction of the Social Fund has actually made payments under Section 17 normal rather than exceptional, because of the problems that we have just outlined.

  261. Do you have any financial statistics on that, is there any analysis that the LGA has done on how much is actually spent on Section 17 grants?
  (Mr Tree) The old ACC/AMA-funded[1], local government Anti-Poverty Unit, which became subsumed within the IDeA,[2] did, in fact, undertake research, about five years ago, which showed a positive correlation between Social Fund refusal rates in certain areas and the increase in claims made for assistance from Section 17 budgets, under the Children Act.

  262. But you have not got any up-to-date statistics?
  (Mr Tree) No; but we know of authorities that have set aside monies, particularly in terms of their community care duties, because of the high refusal rates for Social Fund Community Care Grants, to facilitate early hospital discharge.

Mr King

  263. Did Mr Patterson want to add to that?
  (Mr Patterson) I was just going to go back to the effect on advisers, but also the effect on claimants; the system does demoralise claimants. It cannot be right to have a refusal rate of two in three for Community Care Grants, after 13 years of operation, and for that system still to be in place. The refusal rate was previously four in five. It demoralises particular groups, the message goes into groups as well, refugee communities, young people, groups who are not getting an equal share of what is available. They have not got much chance, in fact, demoralisation sets in. So it makes it very hard to operate that sort of a system.

  264. I want to pursue the issue of Community Care Grants. When Community Care Grants were first set up, there were great ambitions that it would actually advance the Care in the Community principles; do you think that has actually happened, that the Community Care Grants have actually made a difference, in terms of making community care a reality?
  (Mr Bateman) Yes, certainly, that is the case historically, that it was put forward that the Social Fund would complement community care provision; indeed, I think that phrase is actually built into the guidance. A cynic would say that it was perhaps a way of trying to ease the transition of a controversial change. The only thing, effectively, that Community Care Grants have in common with community care is the name, the majority of people who have to apply are people who are poor, they are not people who have a need for social care or community care services. And I think the devils we spoke about earlier, in relation to the Social Fund, undermine the delivery of community care services, because if a person actually does require a community care service, perhaps resettlement from long-stay hospital, for example, often you find, if you do get a Community Care Grant, it is just not sufficient actually to kit out a home to any kind of basic level, you are talking about grants of perhaps £300, £400, what can one buy with that? Even if it is second-hand.

  265. So, really, what you are saying to us is, because of all these devils that you mentioned, that the community care and the Social Fund are really incompatible?
  (Mr Bateman) Absolutely. Indeed, we would emphasise, as was said in our Memorandum of Evidence, that the Fund actually undermines the community care and social care objectives of local authorities because of the huge gaps that it leaves and the inconsistency and uncertainties associated with it.

  266. The eligibility criteria, as it exists at the moment, do you feel that the criteria are appropriate, for eligibility for Community Care Grants?
  (Mr Bateman) Our view would be that they are far too narrow and they contribute to the very high refusal rate. It surely cannot be right that, a family living in long-term poverty, whose cooker ceases to work and has to be replaced, that is not regarded as a community care need. I cannot think of a situation that is more compelling; but yet those people will frequently be refused, unless you can somehow add in other factors, which, in itself, the process of adding in other factors, about perhaps matters such as family stress, difficult family relationships, is actually quite a demeaning process for claimants.

  267. It sounds to me as if you are saying that there is scope for extending eligibility. To whom would you extend that eligibility, other than the case you gave there, of long-term poverty?
  (Mr Bateman) I think, the problem is, they need to be drawn much, much broader. The statement from the Child Poverty Action Group I think has got some very commendable ideas in it, in terms of having perhaps a more automated system. We do have the Winter Fuel Payment system, which is now automated; so there are precedents in the social security system. And, certainly, some system like that could well ease a lot of the day-to-day demand for Community Care Grants; and, indeed, Budgeting Loans, simple replacement of worn-out items, and payment of some form of milestone payments. And then perhaps there needs to be a much broader framework, again, not with a cash limit, or, if there is a cash limit, it certainly has to be much more realistically set, at a much higher level, around issues like resettlement and people having to move home, perhaps because of domestic violence, or people whose lives mean that their circumstances change and they have a need for a significant amount of money in order to set themselves up with basic dignity.

  268. So is it a view across all of you that an increased budget would certainly ease the problems and maybe start to iron out some of the inconsistencies, which must take place from area to area because of a lack of money?
  (Mr Calder) And a firm regulatory base, I think, too, because, it is interesting, the Chairman said, right at the beginning, he had met staff who struggled with the regulations; the trouble is, it is not regulations, most of the time, it is struggling with guidance. And advisers love to struggle with regulations, because that is their bread and butter, that is what they get off on, unfortunately. But it does give a clearer base on which to argue with the Social Fund, and to establish entitlement, and if you have got a proper appeals mechanism that backs that up, that underpins any increase in cash, if you have got fairly broad terms about the objectives of what you want Community Care Grants to be.
  (Mr Patterson) You have had Professor Gary Craig's framework, where he explained the kind of money that we are talking about, and, remember, the starting-point in 1988 was £400 million a year being paid out in grants, single payments, as they were. We have now reached the grand total of £100 million. The shortfall is massive, and we have not got a proper audit of need for basic items. I think it is a major lacking, personally.

  269. Do you think we are putting social security staff in an impossible position, in terms of attempting to balance the demand against the budget? Do you think that there is a case for transferring the Social Fund from social security to social services departments?
  (Mr Tree) The previous Local Authority Associations took the view, in 1988, that that would not be a helpful move, and, in fact, resisted very strongly any suggestion that they should become involved in the administration of the Fund, and there are a number of reasons for that, and I know colleagues would like to add to those. But, I think, in the first instance, the Associations took the view that the involvement of social services, or social workers, in judgements about the merits of a particular claim, would severely compromise some core social work, social care values, of advocacy, advice, support and representation. And relationships that are built upon trust can be very easily undermined, if a client assumes that you are also going to be involved in making a judgement about whether they can have a hundred quid for the gas-cooker that is in the second-hand shop, down the road. So I think that was one of the criteria on which the previous Local Authority Associations objected. If, however, and bear in mind that 13 years have passed since the Fund's introduction, there was a substantive proposal that local authorities should have a more proactive role in the management and administration of the Social Fund, then we would—

  270. I was particularly thinking of Community Care Grants?
  (Mr Tree) Even in relation to Community Care Grants I think we would have to put that to our politicians; but, as Officers, we would be advising them that the reasons for the opposition in 1988 still remained very much the same, in our view, as Officers.

  271. Right; so you are saying the poisoned chalice should remain with the Department of Social Security?
  (Mr Tree) I think we prefer to see it as a case about a national social security system remaining a national social security system, that was governed according to nationally-determined eligibility criteria and rights of appeal.

Dr Naysmith

  272. I find that a rather peculiar position that you have just put forward, because local authorities (of which I am a great supporter, I have been a member of one for 20 years, before I came here), take the view that locally you know much more about the circumstances of people and what local circumstances are. And what you are saying is, you would rather not have the power to decide who gets grants and who does not get grants. And yet we are all sitting around here, probably going to produce a report that will criticise the Benefits Agency and the Government for not doing the job better. And yet local authorities claim sometimes that they can do the job better, because they are local, and you do not want that responsibility?
  (Mr Tree) Before Neil comes in on that point, can I say that we would not think, in the first instance, that you solve the problems of this part of the national system by devolving it; it would have been far more helpful, in the first instance, I think, to look at why there are problems in the national system and therefore resolve it. Secondly, I think that local government is not about income maintenance; that, for the last 50, 60 years, has been deemed to be a role of the centre and in particular, a reaction to the idiosyncrasies of the Poor Law, which the national system, of course, replaced.

  273. I am not talking about administering a national system locally, although it would be that, what I am talking about is, in social services, you have social workers who know very much better than Benefits Agency people the circumstances that your clients, to use the phrase, are living in, and how serious the need is, and I would have thought they were better able to judge. I know it is making a difficult judgement, but I would have thought, given the line that I know local authorities push normally, it would have been better for you to make the decisions than national agencies?
  (Mr Bateman) Shall I perhaps deal with the arguments against, I think, what would really amount to moving the misery around, if Community Care Grants were simply transferred to local authorities. And I speak not only as a very experienced welfare rights adviser and manager but also as someone who is a qualified social worker, who has practised as a social worker, actually in the City of Liverpool, which is probably still the poorest city in this country. I think, with localisation of social security, you have only got to look at the United States to see what the effects of localising means-tested provision results in, and it is not a system, I think, we would want to copy over here. It has huge gaps in it, and some very, very visible evidence of the failures of that occur in the US. I think the next point is that, as we said earlier, most Community Care Grant applicants and recipients are not social services customers, and need not be. They are people who are poor, they are not people who need social workers. By transferring it to social services departments, you would have to provide social work to people who do not need it, who would feel stigmatised by that. People would have fears that, if they discussed their poverty, perhaps their children might be removed, or something similar, people do have those fears. I think there are also issues around economies of scale and economics here. The Benefits Agency, whatever criticisms one may have of it, being actually well placed in terms of things like unit costs, economies of expertise and turning policy into practice on a national level, are far better placed to deal with that effectively than local authorities, which are often small organisations. There are lots of practical problems as well. For example, what would you do about IT links? There would have to be money spent on IT links so that social workers could verify people's income; the auditors would require us to do that, we could not just sort of simply accept people's word for it, I am afraid. If the money is to be spent, are there better ways of spending it? I suggest there are, rather than going to local authorities for this extra IT.

Mrs Humble

  274. Can I just follow up on Doug's point. Duncan gave a compelling reason why social services departments should not take on this responsibility; but it need not be social services departments. Local authorities currently administer Housing Benefit, they currently administer various education grants and free school meals, and whatever. If it were not in a social services department, would you look at it rather more sympathetically? And it could be the administration of a national scheme, it need not be a local scheme, but looked at in the same way as local authorities deal with those sorts of monies?
  (Mr Tree) In the first instance, as I say, you would be asking local government to act as an agent for central government, in that respect.

  275. Which it does, in Housing Benefit?
  (Mr Tree) Well, that is another avenue that ...

  276. We have done a report on that,[3] I will not raise the matter again.

  (Mr Tree) Absolutely; but I think some hard work would have to be done to convince the leaders of local authorities, chief executives and finance managers about the merits of assuming responsibility for what currently is a cash-limited pot of money and all that entails, especially in terms of appeals.


  277. I have no doubt about the veracity of that statement. I do not want to get hung up on this, but it is a very important issue. Neil mentioned comparisons with the USA; well, this Committee has travelled in Europe, places like Amsterdam, where local authorities, actually, very efficiently, look after exactly this kind of service. You may say it is better resourced, and maybe it is, maybe that is the key. I do not have a crystal ball, any more than anybody else in this room, but I have to tell you that, if you look at the disaggregation of the functions of the Department of Social Security that are currently in the public domain, and you ask yourself where, in this little algorithm, or flow-chart, does the Social Fund lie, the answer is, nowhere naturally. And so, if I were the next Minister for Social Security, which you never know, if we are fantasising, at the moment, you would give some thought, would you not, where you decide where to put the little circle that says Social Fund. You would hover, for a moment, over local governments, would you not? Have you done any thinking, we know your position, your position is quite clear and you are defending it robustly, but are you doing any current thinking about the day after the next election, when, as we all know, Whitehall can be thrown in the air, and some of it may land on you, and you may not like it, if you are not prepared for it?
  (Mr Tree) I think it would be extremely unhelpful to premise reform of the Social Fund on a discussion about which is the appropriate tier of Government to administer the Fund. The problems inherent with the Social Fund are its cash-limited nature, the fact that it prioritises and asks individual Social Fund Officers to make value judgements about the merits of a particular case. There are difficulties in terms of the Benefits Agency's administration of the Fund, but surely they can be resolved in terms of training, in terms of regulations and in terms of guidance. And, of course, local government has significant experience of handling transferred, cash-limited, sums of money from the Department of Social Security, and significant experience of what happens when the money runs out; some have observed that that has not been a pleasant experience, particularly in relation to some aspects of the funding of community care, and the expression `poisoned chalice' does indeed come to mind.

  278. I understand that, and you mount a robust defence, and do not think that we are suggesting any of this. But, if you turn that all round the other way, since you provoke me, surely there must be a set of guidelines and regulations and proper funding within which you could work and make Social Fund, or equivalent, a positive experience for community care in local government, could you not?
  (Mr Bateman) Local authorities excel at providing services; when it comes to income maintenance, for the sorts of reasons we discussed earlier, it is much more of a challenge. If I could just refer back to the European dimension, which you mentioned, and the role of local authorities there, let us not forget that both the Scandinavian and continental models of social security are much more based on far, far higher levels of insurance-based benefits, so the means-tested element of social security is actually a comparatively minor part of overall provision, certainly a lot, lot less than in this country; what we have got in this country, of course, is this kind of addiction to means-testing. So that makes a big difference, in terms of scale. And I think the issue really is, without fundamental reform of the Social Fund, all that would happen, by transferring it to local authorities, would be simply moving the misery around, indeed, it would probably make the misery a lot, lot worse.

Mr Thomas

  279. I have only got one, really, Mr Chairman, and it is this. Your Association, Mr Tree, is very concerned about the manner in which funeral payments are provided under the Social Fund. Could you tell us, what is the basis of those concerns, and how you see the system could be improved, and I would be particularly interested to know, from the people who have got direct experience of the welfare rights service, whether you can provide us with any examples of difficult decisions, hardship created by the way in which the system operates at present?
  (Mr Patterson) I will answer that, if I may. There are two big concerns with funeral payments. One is the amount, and we have not covered that in our submission, but I know you are taking some evidence later, so we will not worry about that one. The other part is the scope, and that is what we have highlighted; 63 per cent of people who apply for funeral payments now are successful, the rest are refused. There is something going on there that is strange, because it was 90 per cent of people that were paid, just going back six years. It is a set of restrictions that have been brought in. In the scope of eligibility it asks "Is it reasonable for you to take responsibility for a funeral?" But, in fact, there are three sets of restrictions, in recent years, meaning that there is a strict hierarchy behind that, and that strict hierarchy has not been explained to people and does not make sense to folk. So a single parent, for example, whose child dies: if her ex-partner is living elsewhere and is traceable and is not on a qualifying benefit, she will not get a payment,[4] and that just seems an injustice; it is not understood, it is not perceived to be fair. There has been research on funeral payments and some of the consequences. Mark Drakeford, from the University of Wales, has summarised the issues, in terms of what is needed, and his view certainly is to broaden eligibility, to bring more flexibility.[5] Again, before this last set of restrictions, we had this flexibility to work in a commonsense way with who should take responsibility for a funeral. He also did conclude that passing it across to local authorities would not be the right thing to do, for all sorts of reasons, historical notions about associations with paupers' graves, and all that stuff. There are some good efforts from local authorities in this residual role, but it is not the place to look for change, it is really with some improvements within the scheme. The big issue then becomes shortfalls. Either people are refused, or have limited amounts. The average Social Fund funeral payment is about £866. The average cost of a funeral in the UK, the last figure I saw, was £1,600. Now, okay, for people who apply for payments, perhaps they get funerals at slightly below the average rate, I do not know.

1   Association of County Councils/Association of Metropolitan Authorities. Back

2   Improvement and Development Agency. Back

3   Social Security Committee's 6th Report, Session 1999-2000. Back

4   Note by Witness: If she has to pay for a funeral for her child who has died. Back

5   Funerals, Poverty and Social Exclusion. A Report from the National Local Government Forum Against Poverty in Wales, by Mark Drakeford, University of Wales, College of Cardiff, July 1997. Back

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