Select Committee on Social Security Appendices to the Minutes of Evidence


Memorandum submitted by the Plymouth Citizens Advice Bureaux Welfare Rights Support Unit (SF 10)

  As a second tier agency (providing advice and training on Social Security benefits), we do not have direct contact with clients using the Social Fund. However, agencies using our service have told us that:

    —  The Social Fund is underfunded.

    —  The new Budgeting Loan scheme has led to an increase in loan sharks.

    —  Children are remaining in Local Authority care longer than necessary.

    —  People are unable to take up accommodation, or are losing accommodation because of inability to access loans/grants timeously.

    —  Often only represented clients get a payment.

    —  Lack of availability of Social Fund loans/grants for people on Incapacity Benefit without an Income Support top up.

  1.  The budget for the Social Fund for Plymouth has increased only by uprating for the loans, and by little more than £50,000 on the grants in the last 12-13 years at least. For most of the last 12 months applications for grants have only been considered if they can show they meet the criteria of "most urgent and pressing high priority" (see annex). This has made grants extremely difficult to access and has led to an increase of the problems mentioned at points 3, 4 and 5.

  We recommend that the budgets are increased to a more realistic level, particularly the budget for Community Care Grants which are aimed at the most vulnerable sector of society.

  2.  Since the introduction of the new budgeting loan system we have seen an increase in clients using loan sharks, notably in the most deprived areas of the city. This is a direct result of the doubling of outstanding debt and low maximum debt figures (currently £210.32) stopping clients accessing further budgeting loans. Under the old system they could owe up to £1,000 and when they had repaid some of the debt they were usually able to get a further loan if needed. Under the new system this is no longer possible until most of the original debt is repaid. Whilst this would seem to provide the client with an opportunity not to get into more debt than they can afford, in practice many people are so desperate that they will borrow money from wherever they can.

  It is also routine that repayment terms for Budgeting loans are offered at 25 per cent of the personal allowance (for someone over 25 this is currently £13.05). This makes it more likely that clients will incur further debt as this money is deducted from their benefit before they receive it.

  We recommend that the maximum debt for budgeting loans never falls below £300 and that clients are given a choice of repayment terms across the range of 10 per cent, 15 per cent and 25 per cent, as was formerly the case.

  3.  Social Workers have told us that children are remaining in care longer than they need to because the parent(s) are unable to furnish their homes to an acceptable standard due to the length of time it takes to get a Social Fund payment for furnishing—usually through the grant sytem. It is routine for applications to have to go to the Social Fund Inspector before they are paid. Recent examples that have been brought to our attention are:

    "Married couple both with mental health problems forced to move due to birth of their baby. Used what money they had to move. Given Local Authority accommodation but had no cooker, washing machine or fridge, as well as no carpets and little furniture. Applied for a Community Care Grant (CCG) with help of health visitor but were turned down. Also applied for Budgeting loan (BL) but received one fifth of what was applied for. Asked for a review of CCG—received a cheque for cooker only a week later. This couple still haven't got care of their baby as Social Worker requested that the house must have basic equipment to enable best care of the baby".

Case reported before Christmas

    "Child in care 3 weeks longer than necessary due to client not being able to get a cooker."

  These cases are not unusual. Children are routinely kept in local authority care for 3—6 weeks longer than necessary whilst cases go the Social Fund Inspector for review. Usually an award will be made at this stage.

  When the Social Fund was introduced this type of situation was one the Fund was meant to prevent. In Plymouth there seems to be little liaison between the local officers and the health workers involved, even where the worker has put contact numbers for more information and also stated problems that the client may have such as the inability to read or write.

  Recommend: That cases routinely succeeding at review should be circulated amongst local Social Fund Officers so that these type of cases can be awarded at first application.

  There should be regular liaison meetings between Social Fund, Social Workers and other health workers to discuss problems.

  That where a child is in care and the only thing that is stopping that child being returned to its parents is lack of furniture that these cases should automatically be assumed to be in the urgent most high priority category.

  4.  Shelter and Path (a resettlement service) have both told us that people are unable to take up/ or retain accommodation because either they are unable to get a grant or loan, or the level of award is inadequate. Shelter commented that with support many of the applicants would probably succeed but they as an organisation, do not have the time to help. Path have told us that under the resettlement category they usually get a payment but that it rarely exceeds £200 which is inadequate to furnish property. This leads to a danger that the effort to resettle a homeless person will fail due to inadequate furnishing of the property. They comment that the Government's homeless policy, the policies of the Local Authority and the Benefits Agency don't seem to tie up.

  Recommend that more cross agency policy work is done. That Local Authorities look at putting some basic elements into their housing i.e. cookers. That Social Fund Officers seek further information more often, particularly where an application is not supported by an advice worker. That a resettlement grant is made at an appropriate level automatically when certain criteria are fulfilled, and this is provided outside the Social Fund scheme and is not reliant on benefit entitlement.

  5.  Many organisations have told us that unrepresented clients often fail in their application for a loan or grant. This disempowers vulnerable people, who then will need to seek further help from a statutory or voluntary agency, thus unnecessarily increasing the workload of those concerned.

  6.  Under the present system people receiving Incapacity Benefit without a top up of Income Support do not have access to the discretionary Social Fund. This presents a lot of problems, particularly for clients with mental health illnesses. This group have frequent hospital admissions which often result in them either losing their accommodation or needing accommodation more suited to their needs. The lack of access to the Social Fund often means people are released into badly equipped accommodation, often without a bed or cooker, which leads to re-admission to hospital.

  We recommend therefore, that Incapacity Benefit becomes a qualifying benefit for the purposes of the Social fund. Note: Before the introduction of Incapacity Benefit in 1995, Invalidity benefit was paid at a relatively high level. The same is not true of Incapacity Benefit which is paid at a level not much higher than Income Support.

  Agencies Contributing to this Response

    —  Path Resettlement Service

    —  Plymouth Welfare Rights Unit (Cabx)

    —  Ringmore Way Family Centre (part of Plymouth City Council Social Services department)

    —  Shelter (Plymouth branch)

January 2001


Letter from the Acting Social Fund Manager, Plymouth


  I wrote to you earlier this month to inform you of an increase in our Social Fund Loans budget for 2001/01 to:—

    Loans £4,076,454

    Grants   752,700

  The allocation remains the same, however, due to an unexpected demand for Budgeting Loans, I have had to raise the level of priority.

  The levels of priority that can be sustained from the Social Fund budget allocation without exceeding it from 22 December 2000 are:—

    (a)  Budgeting Loans—

    a single person on IS/JSA (IB) for 6 months has access to a maximum debt of £210.32

    (b)  Grants

  most urgent and pressing high priority

  A copy of the Area Social Fund Officers' Guidance is attached[1].

Mrs PA Etherington

28 December 2000

1   Not submitted. Back

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