Select Committee on Social Security Minutes of Evidence

Examination of Witnesses (Questions 360 - 379)



  360. Are there any statistics available to show how many, both in absolute numbers and percentage numbers of applications that are categorised, lower priority applications are granted and how many medium priority are granted? The impression we have is that, in practice, medium priority and low priority might as well not exist and it is only high priorities that get awarded anyway, and now we have this category of "highest of the high priorities" as a definition. Is it not somewhat disingenuous to suggest that there are several different categories when, in fact, there are not?
  (Angela Eagle) I do not think we have.
  (Mr Evans) We do not have statistics broken down in those terms into those categories. There are some statistics in the annual report, and they may have been in the memorandum you received, showing reasons for refusal of Community Care Grants; some of those show insufficient priority as one of the categories for refusal. It does not subdivide that.

  361. I realise that but I am trying to turn that question the other way round to ask whether any of the lower categories ever get any money. If they do not, I think it is a bit misleading for claimants to think there are all these different bands of priorities when, in fact, they are either a high priority case or they are not. It may be misleading people into false hopes of thinking they might get the money, when in practice there is no hope of getting the money at all?
  (Angela Eagle) The system is discretionary and, therefore, we cannot say to anyone who wants to apply that they have no hope of getting the money unless they do not fulfil the entitlement qualifications—ie, they are not on the right benefit. People have to be allowed to apply if that is what they want to do but I think the staff do try to guide them as to which area of the discretionary Social Fund would be the most likely to give them some assistance. You cannot do that, however, by saying that they are not allowed to apply to the other areas. They are allowed to apply even if they are not eligible and, from memory, one of the largest reasons why Community Care Grants are refused is because the people that apply for them are not eligible because they are not receiving the benefits you need to be on in order to qualify.[3]

  362. I am certainly not saying that but what I am saying is that if, in fact, the only grants that ever get awarded are those that are high priority, to suggest that there are other categories of priority really is a bit misleading. Either you are a high priority case, in which case you have a chance of getting the money—albeit it is discretionary so you may or may not—or you are just not going to get the money. What I am concerned about is that people may be given a false hope that, because they are medium priority, if they apply at the beginning of the next financial year they might actually get something when in practice that is not what is happening.
  (Angela Eagle) We try to plan over the financial year so there are not great big lumpy amounts of money available in May, for instance, so if you are applying in May there will be a colossal amount of money but if you are applying this month it will all be gone. There are attempts to budget on a monthly basis so that you do not get those big swings. Our staff do their best to guide people as to which bit of the discretionary fund it would be best for them to apply for. Whether you have high, low or medium priorities, there is a way of sifting or putting into a priority order the applications that have been made. There are always going to be some people at the bottom of that list, however you choose to describe it, and there are going to be some at the top and some in the middle. Whether you call it all high, or some of it low, or some of it medium, we can pay—and we have to pay—from the top down in priority order. That is how the system works.

  363. I think we have explored that as far as we are able. Can we move on to the way the Community Care Grant is supposed to help people set up home, avoid institutional care, or ease exceptional pressure on families. Again, we have had quite a lot of evidence that grants are being refused to people in dire need, for example, for those coming out of prison or being rehoused after domestic violence or people lacking basic amenities like cookers, fridges and essential clothing. Do you accept that the Community Care Grant has a role in trying to help people in those circumstances and, if so, how do you square that with the evidence we have been given?
  (Angela Eagle) That is its purpose. It was created in order to dispense grants in the circumstances that are listed in Direction 4 but, at the same time, there is a cap on the resources that can be spent. I think the system does the best it can to stay within the expenditure levels that are set and to fulfil the priorities in the way in which the Secretary of State's guidelines and directions tell them they should. The IRS can then have another look and substitute decisions if it thinks decisions have been wrong, and that is how the system works. Coming back to your question whether we are meeting all the need, we are not and, as I said before, I do not think the old system met all the need either. You can always put more money in and hope to meet more need. I am not sure in this area of the welfare system what the correct amount of money to spend would be because the rules sometimes influence behaviour and, if you look at the old Supplementary Benefit Grant system, that is certainly the case. In that system, 80 per cent of the money that was spent went to 17 per cent of the eligible benefit recipients who could claim and the budget doubled every two years. Now, that also presents other problems and, in looking at this very difficult area, we have to see how best we can get a balance between loans and grants, and meet as much need as possible.

  364. You mentioned previously that you see the whole fund in relation to poverty as something of a side issue, but the point I am particularly putting to you is that here we have people particularly stressed, for example, people coming out of prison, and if we are genuinely trying to have some joined-up thinking about, for example, dealing with the behaviour of prisoners who have come out who may be at the risk of reoffending, I would have thought they are more likely to if they lack the basic necessities of life than if they are set up on a very basic basis to try and make themselves independent and go straight. It seems to me that we are potentially throwing the baby out with the bath water, and what would be a relatively modest increase—because the people coming out of prison are a tiny proportion of the overall claimant population—could mean that we would be making quite a substantial contribution to the government's overall crime strategy?
  (Angela Eagle) Sure but if we put extra money into the Community Care Grant system and said "Spend it on prisoners" the system might not deliver that. It is a discretionary system where decision-makers decide which the top priorities are. You put the money in; you cannot control which category of Community Care Grant claimant it goes to, so we have been doing, on precisely that issue, a lot of work with the probation service, with the Benefits Agency being able to go into prisons before people are due to come out so we can get them on benefits faster. There is a range of other work we are doing to try and give assistance and support in that area. The Social Fund and the way it works is only a very small bit of the work that we can do to assist people in making that transition so we are doing a lot of that other work. It is a bit like, when you distribute money through the SSA to the local authorities, you cannot always guarantee it is going to end up where you want it to because they quite rightly have the discretion to spend it, unless it is ring-fenced, on what they want to spend it on. The decision-makers in the Community Care Grant system would decide where the priorities were and any extra money would go to people according to those decisions—not according to my will as a minister.

  365. But it comes back to the guidance given by the department on how it should be allocated?
  (Angela Eagle) Of course, but Direction 4 contains these different scenarios that Community Care Grants are there to assist. I cannot say—and I would not want to—to decision-makers, "You must prioritise prison leavers over older people who may be able to be kept independently in their communities by being given assistance now so they do not have to go into institutional care".


  366. Is it all a bit of a worry if the budget is allocated in such an opaque way? I think you have accepted that no one knows where the unmet need is. Am I right? It may be impossible to measure but we do not know how much genuine unmet need there is, based on the criteria. This is not a blank cheque but should you not know how many people are genuinely entitled to some of these grants and loans under the specified criteria? The department really has no way of knowing, has it?
  (Angela Eagle) I am not sure there is a way of really researching it either since somebody's need for extra assistance to stay out of institutional care may only develop as you are trying to do the measurements. You can only make a guess. You know how many people are going to be coming out of prison; we do not know how many families are going to be under exceptional pressure at any given time. You can make guesses; you can put more money in—

  367. But does that mean that the kind of levels are your best guess of what the need is? Is that how the budget is fixed?
  (Angela Eagle) No. The budget was one which we inherited from the previous government that we have increased since 1994 but, as I said at the beginning, we are meeting more need but not all of it.

  368. Good for you but that is not the point I am trying to make. You are doing very well under difficult circumstances—we believe that! What I am trying to get at is: is there an amount of money allocated on the basis of what was happening last year, plus some?
  (Angela Eagle) Perhaps Chris might be able to give you some insight as to how they allocate the money.

  369. Let us ask some specific questions because I think Andrew was asking some very important questions in identifying 24 areas that the IRS said to us were district offices operating at the very highest of the highest level of need. I have just been looking at the redistribution that took place in December of the budget. That £4 million distribution within the areas in December last year—?
  (Angela Eagle) That was for the Budgeting Loan system and we are talking about the Community Care Grant money here. We can have a much more hands-on view of what is happening with the Budgeting Loan system than we can with the Community Care Grant system; they are slightly different.

  370. But the question still applies. According to the lists and figures that I have showing that redistribution, district offices like Liverpool North and North Cheshire were, at one and the same time, allocating on the basis of the highest of high priorities and, at the same time, taking money away from them. Can that be right?
  (Angela Eagle) They are different budgets.
  (Mr Evans) I think the point is to distinguish between the loan budget and the community care budget.
  (Angela Eagle) You get a set amount for the Community Care Grant and that is separate from the budgeting loan grant, and they are distributed separately. I think, although I am just guessing, that you are mixing up the redistribution that happened with the Budgeting Loan system last December with the Community Care Grant system. I think that is what you have done.

  371. I see. Please talk to us, then, about the process that allocates the global budgets.
  (Mr Evans) We are talking about the discretionary fund here and distinguishing between the loans budget and the Community Care Grants budget. Each of those budgets is distributed amongst the various districts to take account of a number of different factors. Basically it is intended to reflect likely demand and, to an extent, an assessment of likely need. In the case of the Community Care Grants budget—and the formula has been explained in the appendix to successive annual reports if you want further detail[4]—essentially it has been based on one factor being the case load of the people on benefits—giving different weightings to different client groups, pensioners and others—and also on an indication of the number of people who have received grants from the fund in the previous year. Taking those into account, the distribution between districts was set and that has then been moved forward from year to year using broadly the same approach over the last few years. In the case of loans, the focus is particularly on expected demand and, given the emphasis of trying to get a bit more consistency between applicants between districts, the aim has been to look at where the applications were coming in, what the case load of loans was the previous year, and then to carry that through to the next year. So that is how it is done at the beginning of each year. Each year, it is also possible to make some adjustments if necessary if it is found that there are some loans budgets which appear to be under-spending and others in difficulties, and I think that is what you were referring to just then.

  372. If the individual local staff are operating to very tight caps on some of these budgets, are you confident that you are getting a full measure of what the need is if people are saying, "Well, because the budget is exhausted, or beginning to be, or going to be, then you cannot have what you may otherwise be entitled to"?
  (Angela Eagle) We have to look at why. If there is flooding or unexpected demand, then there is a contingency budget and we can refinance some areas and give extra money to top up budgets. If there has been flooding, for instance, then I can allocate extra cash to a particular district. In the Community Care Grant element of it in that budget, since 1997 we have targeted increases at those districts which we have noticed are meeting the lowest levels of demand.

  373. So you do get that information?
  (Angela Eagle) I do not think we get it in big statistics that we could print—

  374. That was the next question!
  (Angela Eagle) I do not think we get it in that kind of form, but we do keep in touch with all of the districts and they report back to their managers and we know anecdotally where the pressure is.

  375. You are really confident about that?
  (Angela Eagle) Well, it is not a system that our analytical services division would say was robust but we do know if there have been particular problems in particular areas. For example, sometimes the sudden closure of a nursing home can have a big effect on a local budget. If something like that has happened and there is pressure, I will get a report about it; there will be an explanation why there has been unexpected issues going on there or the expenditure is over profile, and we then have the capacity with our contingency budget to put more money in and to smooth over some of these difficulties.

  376. That is more understandable but what I am really trying to ask about is whether you can really be confident at the policy level that the system you have is sensitive enough to be able to indicate not essential efforts like flood or storms or closures but that year on year, if there is pressure that has been capped by the budget, you really understand what that is; that last year's allocation plus X, whatever it is, really is not measuring up to the year-on-year upwards pressure that might be suppressed by the guidelines and the caps that you do not know about?
  (Angela Eagle) I said earlier that I do not think we do meet all the pressure, and the system did not start off with an objective measurement of need.

  Chairman: I am sorry, I am getting drawn into issues.

Mr Dismore

  377. Following that up, you said that some districts have money taken away. Is that not an incentive for those districts who have had a bit of a spending spree to think that is what is likely to happen to them?
  (Mr Evans) Are you talking about Community Care Grants?

  378. Yes.
  (Angela Eagle) We have allocated much more in the last year or so in year for budgeting loans and we have changed the system and the demand patterns were new. It therefore takes time for you to see a pattern of demand and what is likely to happen. In order to try to preserve, therefore, a band of consistency across what the maximum and minimum loans are likely to be, we have allocated money in year in the Budgeting Loan system and some districts that have not been spending have had money taken off them, if you want to put it that way. We have not noticed any sudden changes of behaviour as a result of the in year reallocations.

  379. Do you think you would notice if a certain Chilterns Home Counties operations manager thought, "This is a good wheeze; we can get some more money out of the system doing this"?
  (Angela Eagle) I think we probably would notice because we know what the profile of their expenditure is over time and if there were sudden peaks or troughs we could investigate why. If there is an explanation that is plausible then fine and if it is a sudden spending spree we would know about it, but I have to say our staff do not tend to behave like that.
  (Mr Watson) From a district perspective, could I confirm what the Minister was saying there? In terms of having a budget allocated—and I am particularly talking about the Community Care Grant budget—it is incumbent upon the district manager known as the area decision-maker to sit down and reflect on what the likely pressures will be on the budget over the forthcoming year, and they will do that typically by looking at the historical experience of where pressures of successful demand are met. That then has to be profiled and issued not only up the management line but to people like IRS and other professionals—the Social Services Department and welfare rights groups. Over a calendar year, therefore, segmented month by month is a profile of anticipated expenditure. If expenditure against that profile exceeds a tolerance, that automatically triggers management action to start probing along the lines the Minister has mentioned, so there is a systematic means by which, if someone did suddenly start spending very considerably, that would be picked up and addressed.

3   Note by Witness: 1999-2000 10.7 per cent of Community Care Grants failed because the applicant was not in receipt of a qualifying benefit. Back

4   Note by Witness: Details of social fund budget allocations can be found in the following sections of the Social Security Annual Reports by The Secretary of State: 1988/89 Paras 3.6, 3.7 & Annex 3; 1989/90 Paras 3.7, 3.8 & Annex 3; 1990/91 Paras 3.11 to 3.13 & Annex 3; 1991/92 Paras 3.13 to 3.20 & Annex 3; 1992/93 Section 2 & Annex 19; 1993/94 Para 3.34 & Annex 19; 1994/95 Annex 2, 1995/96 Paras 6.3 to 6.4; 1996/97 Paras 6.2 to 6.4; 1997/98 Paras 5.2, 5.3; 1998/99 Paras 6.4 to 6.6; 1999/00 Paras 5.7 to 5.9. Back

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