Memorandum submitted by North Ayrshire
Council (SF 20)
This submission is based on 18 years of experience
in advice work within Social Services. More than 10 years ago
this authority contributed to a Convention of Scottish Local Authorities
(CoSLA) study which highlighted the failure of the (at that time)
new Social Fund. The situation has not improved over time and
recent amendments to the budgeting loan system indicate that the
initial objectives have been forgotten.
The Social Fund has failed as a flexible system
of lump sum payments to meet individual need. Budget considerations
and rigid directions hamper the discretionary approach. The system
has not complemented the work of Social Services or effectively
contributed to the wider community care provision. The administration
of the scheme is expensive, cumbersome and, most importantly,
demeaning to the people it should assist.
It is my view that the Social Fund should be
abolished. There is a need to offer additional help for irregular
or exceptional needs not covered within the weekly benefit. This
payment should be regulated. It should not be cash limited. There
is no other cash limited benefit within the Social Security system
and successive governments have ensured that measures are in place
relating to accuracy and fraud which tackle perceived abuse. There
seems little justification for treating this particular benefit
There is a need to introduce a genuinely independent
1 To meet extra, irregular needs
The first difficulty in assessing the Social
Fund is that there is no real understanding of what it is intended
to cover. Since there is no explanation how the Income Support
applicable amount is calculated, it is impossible to know what
it should cover. Experience of the Social Fund informs me that
many ordinary items, e.g., carpets, a fridge, a wardrobe are not
of sufficient priority to be awarded under the Social Fund yet
by any common sense definition these items would be considered
The applicable amount is the "minimum the
law says you need to live on" yet each week many people are
forced to live on less due to Social Fund recovery. Their income
is reduced further by the need to take on expensive forms of credit
because the Social Fund does not cover the item required. Claimants
do without basic items, which the applicable amount is intended
to coverfood, clothing, etc. to obtain essential items.
Alternatively they do without the item. "Do without"
seems to be the result however it is explained
2. To be flexible
Many items that might be required by a claimant
are excluded at the very outset. These items may be considered
a luxury or, sometimes incorrectly held to be available from another
source. The various amendments have reduced the possibility of
a flexible approach.
The Fund has never really operated as a whole.
Entitlement under one branch has often excluded people from an
award of additional help under another part of the scheme. For
example an award of Maternity Payment would tend to reduce the
possibility of other help for baby items unless there was some
exceptional circumstance. Reasons for refusing a grant seemed
to be used against, instead of in support of, a loan award, and
vice versa. It should have been possible, if not common, to find
people too poor to repay a loan being awarded even a minimum amount
as a grant or crisis loan.
Recent amendment to budget loans scheme ensures
that the Social Fund Officer cannot look at entitlement under
the community care provisions. Claimants who feel they have entitlement
under both schemes have to make two applications. Of course this
also has implications for the staff and the time scales for decision
3. To award payments for funeral and maternity
It is acknowledged that the wider conditions
of entitlement and the higher amount of award were a great improvement
on the previous system. However later amendments have caused extreme
hardship. The restricted amount of the award simply does not meet
the basic funeral cost. There appears to be a determination to
identify someone (anyone) who should take responsibility
without accessing the Social Fund. The fact that the person might
live abroad and have absolutely no resources to meet the cost
is irrelevantthis confirmed by Social Security Appeal Tribunal.
A teenager on very low income can be held to
be responsible for his mother's funeral rather than make an award
to the parent of the deceased. Of course decisions of this sort
take no account of the reality that the claimant although refused
will be liable for the cost and there is no liability on the "responsible
Maternity payments under the Social Fund were
also a great improvement on the previous system. They have recently
increased and improved. The linking of entitlement to assistance
with maternity costs and proof of antenatal contact shows that
interagency co-operation is possible. The option of additional
help through budget loans has been clarified.
4. To contribute to the wider community care
At the outset it was anticipated that the Social
Fund would provide grants to people leaving institutional care
or to enable people to continue to live independently in the community.
Almost by definition this should include most people with enduring
mental health problems, homeless people and young people leaving
care. In practice it has been a very different fund with many
of these people excluded from assistance. It seems most awards
go to elderly claimants, women fleeing violence who have been
in a hostel and severely disabled people. While not wishing to
disentitle these groups, there are others at least equally deserving.
Very many people with long term health problems
are excluded simply because they are in receipt of Incapacity
Benefit. The weekly rate of benefit may be only marginally higher
than Income Support and in fact they might find themselves in
a "poverty trap" through operation of other means tested
benefits. Ex-offenders are, by contrast, usually in receipt of
Income Support but rarely qualify for grants on grounds of low
priority. Young people leaving care are often turned away at first
consideration. Officers believe they are excluded because of the
close connection with local authoritythe very condition
allowing them to qualify for Income Support and, in turn the Social
1. Use of discretion
The main objective of Social Fund Managers and
Officers is to work within the cash limited budget. This does
not absolutely remove the scope for discretion. The problem is
really that the budget is too small to meet the needs of those
it is designed to serve. In this situation there cannot really
be a decision based on the discretion of skilled staff and taking
all the circumstances into account. If the budget is spent then,
regardless of the circumstances, the applicant will be refused.
Another result of the discretionary scheme is
that there are bound to be inconsistent decisions from Area to
Area and even within an office. This has been an obvious problem
for Social Services staff who deal with many Social Fund applicants.
Virtually identical claims in similar circumstances made within
the same week can receive vastly different treatment. One might
get a grant another a loan. One might get a £700 award another
Less difficult to identify and substantiate
have inconsistencies which appear to reflect attitudes of decision-makers.
It has been noted that blame can be attached to an individual
who tries to access even crisis assistance. Thus help may be refused
if the persons addiction and / or chaotic lifestyle leads to loss
of money and destitution.
2. The Secretary of State's Directions
From the outset it seemed that Social Fund staff
were challenged to exclude or refuse applicants by rigid Directions
that form the initial hurdle for all claimants. It seems at times
that there is no end to the reasons why a person should be refused.
To illustrate this I simply need to quote the latest enquiry which
arose in this office less than one hour ago.
The lady suffers from a hereditary kidney disease
and after a period of incapacity has been found fit for work.
She is currently "signing on" for work and after getting
Contributory Jobseeker's Allowance for 6 months has recently moved
on to Income Based JSA. She is hoping to take up a New Deal training
placement which, apart from any other incentives, will boost her
£41.35 weekly income by £10. This lady contacted the
Social Fund to apply for a loan to buy a decent pair of shoes.
She did not make the application as she was advised of the following:
No entitlement to a budget loannot
in receipt of qualifying benefit for 6 months.
No entitlement to community care
grantitem is normal replacement footwear.
No entitlement to assistance to attend
interviews or work placement.
No entitlement to crisis loan as
need does not arise through emergency and is not for her immediate
In advising this lady I suggested she highlight
her past admissions to hospital when her health had deteriorated
through having a relatively minor infection. She has been advised
to keep warm. I felt that the need for adequate shoes and a warm
coat might be considered under community care provision for a
person with health problems. Having no access to the loan budget
might add to the priority of the claim. Including the coat in
her application would also prevent her being refused because the
need was below the £30 minimum payment!
3. Local Guidance.
Despite the strict Directions which people have
to meet, the Social Fund budget has always been under pressure.
This may not always be clear from available statistics on award
and refusals because great effort is put into the management of
the budget and overspends are not an option. Further restrictions
are achieved through local guidance.
Over the years whole categories of claimant
were excluded from assistance, e.g., people who were not judged
to be part of family, families under stress classed "low
priority". Local guidance also applies to items so that for
many months each year only cookers and beds are considered high
priority items. The net effect of this is to introduce an element
of deception into the system as desperate claimants try to guess
which items might be acceptable to the Social Fund Officers, always
remembering not to repeat requests.
Some of the worst examples of local guidance
have been successfully challenged at the Social Fund Inspectorate.
It is difficult to calculate the long-term influence on decision-makers.
4. Accessing the Social Fund
Despite the high number of Social Fund claims
there are barriers which hide the real demand for assistance with
irregular and exceptional costs. For many years the Irvine Benefits
Agency had almost no expenditure for crisis loans. This must have
been a great advantage when managing a budget but it was remarkable
to Social Services staff who were often asked for help under very
restricted powers to assist with "cash or kind". People
were simply being refused the appropriate form on the basis that
reception staff believed they would not be entitled. Eventually
the problem is addressed but it remains part of local knowledge
and experience that "you don't get a crisis loan".
There are of course problems of geography. In
a rural, and an island, community North Ayrshire residents have
difficulty accessing the office. This becomes acute if a crisis
loan is required and the claimant has no money to travel to make
the application. Lack of help with forms can lead to a claimant
walking back and forth between Benefits Agency and Social Services
or other advice service while decisions and reviews are considered.
Poverty and multiple debt are themselves a barrier
to accessing the Social Fund. Some claimants are too poor to qualify
because they are judged unable to repay. Some have reached the
upper limit allowed under the Directions. For grants the concentration
on the minutiae of a person's life problems and personal circumstances
discourages people from accessing the fund or seeking review.
While admiring the Social Fund Inspectors' approach
to casework it must be said that claimants do not recognise them
as independent. As their decisions are not legally binding it
is difficult to quantify the influence the Social Fund Inspectors
have on the local decision making process.
The new budget loan system is purely fact based,
a calculation of points according to life circumstances, the amount
of borrowing allowed and the ability to repay. In this situation
a review is pointless because there is no scope for discretion
or discussion. However the inevitable increase in decisions being
upheld in budget review cases is being used to illustrate improved
It is difficult to see how such a discredited,
unpopular system could be salvaged. It is my view that the Social
Fund system should be abolished. It actually adds to the misery
of people coping with multiple debt and continues to be a burden
even when the person moves off benefit. It can be a barrier to
moving off benefit.
It is unfair because it treats people with equal
entitlement differently. It excludes people who have as little
income as Income Support recipients (and excludes some Income
Support recipients). It forces people to use alternative, perhaps
illegal sources of credit, and it means individuals and families
go without basic essential items.
The Income Support applicable amount should
reflect a decent, adequate minimum standard of living. This would
allow claimants to budget for most of their needs. For exceptional
items and life events, e.g., there should be a regulated system
of payment with appeal rights.
Welfare Rights Development Officer
19 January 2001