Select Committee on Social Security Appendices to the Minutes of Evidence


Letter to the Committee from Bolton Metro Social Services Department (SF 17)

The Role, Practice and Future of the Social Fund

  We are writing as Social Workers from a Community Mental Health Team with considerable "front line" experience of the workings of the Social Fund, particularly the Discretionary Social Fund. We are closely involved in supporting service users with severe and enduring mental health needs who often rely upon payments from the Social Fund to enable them to set up home or to remain living in the community.

  We would like to make four main criticisms in relation to the operation of the Discretionary Social Fund:

  1.   The Social Fund loans system has proven to be extremely problematic for vulnerable service users.

  Given that many individuals applying for financial assistance are already subsisting on benefit levels, the practice of offering Social Fund loans clearly also leads to further indebtedness. Loans are repaid by deductions at source from benefits. The existence of Social Fund loans can also act as a disincentive to welfare provision, discouraging some individuals from actually seeking, or indeed accepting the financial help that they may need.

  2.   In some cases the Social Fund has issued loans, instead of grants, despite applicants possessing priority criteria for the award of a grant.

  These cases have been a matter of concern when loans appear to have been issued by the Benefits Agency, in lieu of Community Care Grants. Again, it is the community care needs of vulnerable applicants which are then not fully met as unnecessary indebtedness may be incurred.

  3.   The exclusion of claimants not in receipt of Income Support has left gaps in community care welfare provision.

  We have found that many service users who receive Incapacity Benefit are as much in need of extra help from the Social Fund. Whilst Incapacity Benefit claimants do receive a slightly higher rate of benefit than those on Income Support, this additional money is often swallowed up in contributions towards rent and Council Tax. Thus there have been service users in receipt of Incapacity Benefit whose financial circumstances and community care needs (in terms of requiring essential household items) may well be largely similar to those receiving Income Support. Yet those particular individuals in receipt of Incapacity Benefit are not entitled to help from the Social Fund. We would argue that the role of the Social Fund, to promote community care is clearly found wanting in such circumstances. In our view, this is a major discrepancy where the Social Fund does not provide often very necessary additional financial help for many vulnerable service users with long term mental health needs simply because they do not receive the "gateway benefit" of Income Support.

  4.   Reduced payments of both loans and grants have occurred towards the end of the financial year.

  We have encountered cases where Social Fund payments to service users, of both loans and grants, have been at reduced levels due to a depleted local Benefits Agency budget, particularly in February and March.

Proposals for the future of the Social Fund

  1.  We propose that Social Fund loans be abolished in favour of a system where only Community Care Grants are available to meet the community care needs of vulnerable people.

  2.  That the eligibility criteria should be extended specifically to include claimants who are in receipt of Incapacity Benefit, subject to the current "means-test" on savings and assets.

  3.  That a consistently available budget should be provided to avoid unfairness in the system, when reduced payments are made in the months prior to April, the end of the financial year.

  We hope that our criticisms and proposals can be included in your review of the Social Fund.

  Barbara Davies, Team Leader

  Social Workers:

  Mick Downes  Melanie Gale   Julie Haywood

  Alan Hitchen  Alison Hughes  Helen Lee

Alison Marsh  Nayna Pitamber  Simon Rogerson

  Social Work Students:

  Tony Durkin  Shannon Stanley

12 January 2001

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