Select Committee on Social Security Minutes of Evidence

Examination of Witnesses (Questions 334 - 339)




  334. Good morning, ladies and gentlemen. We are pleased to have the Parliamentary Under-Secretary of State, Angela Eagle, from the Department of Social Security to talk to us about our Social Fund inquiry. She is joined by Stephen Watson, who is Operations Director for Chilterns Home Counties and Christopher Evans from the Working Age Group, the head of Financial Support Change Branch. Angela, perhaps you could say a little bit about what your two colleagues do and what their role is in the Social Fund and perhaps make a short opening statement; then we have some questions.

  (Angela Eagle) Thank you, Chairman. Firstly what I would say is it is far better for those individuals who are doing the jobs to explain to you precisely how they work, but we have in Chris Evans somebody who works at the centre of the Department on financial issues and change and he will say a little bit about what that involves and Stephen Watson who is an operations director in the Benefits Agency which delivers the Social Fund itself. I will let them explain to you what they do, and they will do it far better than me.
  (Mr Evans) I am in one of the central directorates of the DSS, the one dealing with the working age client group. We are in the change directorate, responsible for both policies and procedures and changes to policies and procedures for social security benefits affecting working age clients primarily and, as part of that, I am responsible for changes and policies relating to Social Fund and also aspects of Income Support, Housing and Council Tax benefits and industrial injuries benefit.
  (Mr Watson) I am an operations director in one of the thirteen areas within the Benefits Agency; basically that encompasses having day-to-day line management responsibility for seven districts within the Benefits Agency, each district having the full range of Social Fund responsibility. I do not specialise just in Social Fund but the whole range of local delivery of social security benefits in that particular part of the world.

  335. That is helpful. Angela, please give us a little bit of perspective from your point of view, and then we can open up with some questions.
  (Angela Eagle) I think that by helping people with lump sum expenses, the Social Fund complements provision of the main income-related benefits. It aims to help the poorest and the most vulnerable people in our society. All too many of those who get help are living in poverty but the Social Fund alone cannot lift and keep people out of poverty; this has never been its intention. In looking at the role and impact of the Social Fund, therefore, I think it is important that we do so in the context of the government's wider initiatives to tackle poverty and social exclusion. The government is committed to tackling the causes of poverty and creating a fairer society by enabling opportunity for all. We have backed up our determination by setting targets for the first time to eradicate child poverty within twenty years and halve it in ten, and we have introduced a significant programme of reform to tackle pensioner poverty too. We have already put in place a number of important measures. On families, for example, and they are the largest group of the Social Fund users, we will by the end of this year have increased spending by £6 billion when you compare it to 1997. In practical terms, this means that on average all families with children will be better off by £15 a week with the poorest families gaining on average twice as much as that. Couples on Income Support or income-based Jobseekers' Allowance with two children under eleven will be better off by nearly £30 a week and there is an extra £11.05 for severely disabled children under the disability income guarantee. Our programme of action to raise the incomes of poorest families and pensioners to make work pay and combat poverty is paying off; the proportion of children living in workless households has now fallen from 17.9 per cent in the spring of 1997 to 15.8 per cent in the spring of 2000. Measures introduced in this Parliament will lift a million children out of poverty. For pensioners, measures such as the Minimum Income Guarantee means that, since 1997, all pensioner households will be on average £580 a year better off than they were in 1997, with poorest pensioners gaining at least £15 a week in real terms. So we are tackling poverty and we will continue to do so. The Social Fund will continue to have an important role for those who need it. Typically these are a lone parent trying to cope with extra costs; a mother fleeing domestic violence who needs a grant to set up a new and safe home for her children; a pensioner for whom a grant for a household item can enable them to continue living independently perhaps in their own home; a single person setting up home afresh after being in long term care; or a homeless person needing help; or a householder who has been hit by a disaster such as fire or flood. There is a need for help with funding for routine expenses to cover short term cash emergencies as well. I recognise the Social Fund is not everybody's ideal system but I do not think any system can guarantee to meet all needs. Previous systems like the Single Payment Scheme which provided grants as of right in specified circumstances quickly fell into disrepute because they were wide open to abuse and led to expenditure spiralling out of control. However, the government has introduced several improvements to the Social Fund as we inherited it to make it more effective. Firstly, in the regulated Social Fund, we have tripled the maternity grant from £100-£300; we have introduced a winter fuel payment for households with older people; in the discretionary Social Fund we have increased the overall fund budget by more than one third—it is up from £467 million to £626 million since 1997 which is a 34 per cent increase. We have also had two increases in the Community Care Grant budget which was previously frozen since 1994. We have simplified radically the Budgeting Loan scheme. We have introduced shorter and simpler application forms for homeless people and victims of disasters. Independent research has shown that the changes to the Budgeting Loan scheme have been welcomed by those who use it because they no longer have to specify what every item of loan is for, or justify why they need to specify it, or be subject to intrusive questioning. 82,000 more people got a budgeting loan last year after the changes were introduced. Grants to homeless people being resettled have risen fourfold over the last two years and around 300 victims of the recent flooding have received recent Community Care Grants. We have, therefore, made the fund easier to access; we have tried to simplify and speed up decision-making; we have removed unnecessarily intrusive questioning and increased the numbers of awards. I look forward to discussing some of these with you and trying to do my best to answer questions in what is a particularly complex area, I think, of the way in which the Social Fund works.

  336. Thank you. That is very helpful as an opening perspective from you and certainly you are right—it is a difficult area. We are not trying to be clever and I think it is a bit dangerous in what is, for us, really quite a short inquiry to start pontificating from high heights about what needs to be done. There are some real concerns, however, I have to say, that we have come across. I think it would be true to say that, in terms of the level of service that the customers get, there are some real concerns just in terms of the administrative processes and how they affect people who are trying to claim some of these important Social Fund residual safety net benefits. What comes through most strongly is that the inadequacy of the Income Support basic levels of benefit are shown up really quite starkly when you see what people have to face—the level of indebtedness and the number of family households that are below Income Support rates because of paying back Social Fund loans. Just listening to the evidence the Committee has heard, there is a concern that the Social Fund really is a sort of forgotten end of the system. I think it is right to say ministers have got some justification in saying that, over the distance of the Parliament, this government has done a lot—whether you think it is all right or wrong—in terms of welfare to work, and the Prime Minister characterises the policy as "Work for those who can", and there has been a lot done in that direction, and a lot of attention paid. But you could argue that the other half of the adage, which is "Support for those who cannot", really has not yet been delivered. You may say that four years is a long time to turn round a system that is as complex as this but I have to say that looking at the practitioners, the welfare rights advisors and the rest, who are trying to struggle against what they see as a wall of attrition in terms of finding their way through the eligibility and the budget limits, it is a very different story. What I would really like to put to you as an opening question, before we look at the regulated fund and the discussion of the fund in detail, is whether ministers are confident that they are meeting the need that is out there? Our evidence is there is a huge existing level of unmet need that the Social Fund is not yet properly addressing. Have you got any kind of confidence or have you been able to get any advice from your officials that gives you a view on that important overriding question?
  (Angela Eagle) I think we are meeting more need than we were meeting in 1997 simply because the amount of the funds that are available for the loans budgets have gone up and the amount of money available in the discretionary Social Fund which is what we are talking about here, which I would probably, as you know, define as the budgeting loans, the Community Care Grants and the crisis loans bit of the system—not any of the others—has increased by 34 per cent because of the way that the system works for those payments, so we are meeting more need but I am not going to sit here and say that we are meeting all need. We are not, and I do not think the predecessor system of grants in the supplementary benefit structure met all needs either.

  337. I think that is a perfectly reasonable answer except to say this: that you suddenly find that the biggest thing that has happened to the Social Fund happens to be the £1.7 billion payment that fell out of the sky from the Treasury and was put into winter fuel allowances. Coming from a constituency that is still snowbound we are very thankful for all of that but, if the Social Fund is supposed to be that focused about meeting inescapable individual need on a means-tested basis in extremis, and winter fuel payments are paid to anybody passing at the time and that kind of thing—
  (Angela Eagle) It is not quite that wide an entitlement!

  338. I am being a bit facetious about it, but here is a payment of £1.7 billion. Now, if you had said to me at the beginning of this Parliament, "You have got that level of money to play with in terms of making the Social Fund more effective and efficient", I do not think I would have deployed it in the way the government have. I put that to you: is £1.7 billion put into the Social Fund through winter fuel allowances the most effective way of targeting people on their uppers, people facing the gradgrind of inescapable poverty in the way we previously were led to believe the Social Fund was designed to do?
  (Angela Eagle) When we first came into government we set up an interdepartmental committee on fuel poverty and the winter fuel payments came out of some of the initial work of that committee and a desire, I think, by the Chancellor to do something about the fuel poor. When you look at the figures, 50 per cent of the fuel poor are actually over 60 so I would say that there is some targeting there. The other point I would make really is that I think you need to distinguish between the discretionary part of the Social Fund and the regulated part of the Social Fund. Winter fuel payments come from the regulated part so they are not taking away money in that sense from the discretionary part. I think I would also probably want to say that the Social Fund is good at making one-off payments—that is what it does in the social security system. If you look at other bits of the system we tend to have weekly payments or payments that are on-going, whereas the Social Fund is geared up to make one-off payments such as the cold weather payments which have been long established, and also I think quite accessible in Scotland, certainly in the last few weeks, so it seemed the best place to put the administration of it simply because the system is geared up to make one-off payments of entitlement which is what winter fuel payments are. There was no active, "Can we put £1.7 billion extra into budgeting loans or shall we have winter fuel payments" discussion; that was not the kind of choice that was made. There was a decision made to target the fuel poor; 50 per cent of them are over 60 and once those decisions were made we in the DSS looked at where best we could administer the system from and the regulated Social Fund was the obvious place to put it.

  339. Finally from me, if my earlier analysis is right the government has been concentrating on getting people into work. Is there any expectation you can tell us about that would give us some confidence that maybe in the next Parliament, were the government to be returned, there would be other ways of improving, enhancing, looking again at how the Fund fits into the overall scheme of things?
  (Angela Eagle) I would not characterise what we have done as solely trying to get people into work. I think if you look at the decisions made on increasing premiums in income-related benefits and on providing extra help of the sort I mentioned in my opening statement, £6 billion of extra help for families, for example, who are on benefits is a pretty good start. We are doing a mixture. We do want to create a welfare system which enables people to be moved off benefits where that is practicable for them and into work and we are putting a lot of effort in there, but we have also spent significant extra sums of money, targeted mainly at children and pensioners and families of pensioners, on improving the levels of the income-related benefits that people who are out of work have to survive on. We have not created Utopia but I think we have made a pretty good start, and I would expect that a re-elected Labour government would want to do more in all these areas.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 4 April 2001