Select Committee on Social Security Appendices to the Minutes of Evidence


Memorandum submitted by Mike Rowe, Nottingham Trent University (SF 32)


  This paper presents a summary of evidence emerging from a recent programme of research. Evidence suggests that the discretionary Social Fund remains as problematic today as it was when first introduced. Social Fund Officers themselves describe a system that fails to direct assistance to those most in need. As such, after more than a decade in operation, it is still not possible to say whether the Social Fund is fulfilling its purpose, except in so far as it has contained expenditure within a cash limit.


  1.  This memorandum is submitted in response to the Social Security Committee's request for evidence on the Social Fund. In particular, the memorandum will address two of the key issues identified by the committee: the role of the Social Fund; and how it works in practice.


  2.  From the outset, the discretionary Social Fund has been controversial. The extension of discretion, requirement to repay loans, removal of rights to an independent appeal and, perhaps most significantly, the introduction of cash limits have ensured that the scheme continues to be the subject of scrutiny by politicians and academics.

  3.  The evidence presented in this paper draws upon the findings emerging from an ongoing research project examining accountability, both as a concept and in practice. In the course of this work, I undertook some detailed case study work examining the discretionary Social Fund. In addition to the literature on the Social Fund, in the course of this research, I interviewed a range of people concerned with the policy, management and delivery of the Social Fund. I also spoke to leading authorities, welfare rights advisers, advocates and campaigning organisations. It is this material and these conversations that this paper seeks to capture in summary form.

  4.  It should be noted that the bulk of this research was conducted during 1998. As such, it predates the policy change that occurred in April 1999. However, much of the material retains its relevance in that it concerns the manner in which discretion is exercised in the administration of Community Care Grants and Crisis Loans, and the way in which Social Fund Officers manage the competing demands of financial constraints, management targets and the needs of applicants.


  5.  A number of studies were conducted in the early years of the operation of the Social Fund. These suggested that the way in which discretion was exercised varied, from case to case, from office to office and from month to month, in ways that could not readily be justified or understood. At the time, the government evaded any responsibility to account for these variations (see Rowe, 1998) and little further research has been done in the intervening years. While conducted as part of a study of the concept of accountability, my own research suggests variations remain a key characteristic of the Social Fund.

  6.  Social Fund Officers in three Benefits Agency districts described very similar application and decision-making processes. Each described the need to consider directions and guidance in the light of the evidence presented in an application form. They suggested that the key to the way in which discretion is exercised is the quality of information presented by applicants. The more information that is available, the easier it is to decide on a case.

  7.  This having been said, Social Fund Officers suggested that more experienced and knowledgeable applicants were able to manipulate the process by presenting false evidence that would be difficult to challenge. With resource pressures and clearance time targets to meet, challenging the evidence is not a viable option. Hence, many loans and grants are awarded in cases where there may be reason to doubt the evidence.

  8.  On the other hand, applicants unaware of the system and perhaps reluctant to reveal what might be highly personal information in support of a claim for assistance may not receive the assistance they need. Unable to devote time to uncover this information, Social Fund Officers expressed the frustration of knowing they must refuse to make an award to a person that needs help. This frustration was aggravated by the way in which the forms, and particular questions on those forms, actually tended to prompt misleading responses.

  9.  Throughout my work, the value of quality information was emphasised. Social Fund Review Officers stated that, in review interviews, they were able to see the applicant, to ask questions and to obtain information that application forms could not. Social Fund Inspectors suggested that, in many cases, they changed decisions on the basis of further information rather than as a result of procedural or other errors. Advocates and advisers told similar stories. Indeed, the process of review appears almost as a continuation of the initial application. Social Fund Officers suggested that, if they had any doubts about a case, they would refuse an award and allow the applicant to seek a review rather than take time to make a thorough decision. If an applicant didn't persist to the review stage, that was an indication that their need was not as pressing as another.

  10.  Describing the experience of aiding clients with applications to the Social Fund, a number of welfare rights advisers elaborated on these impressions, suggesting the importance of persistence. They describe a series of barriers and hurdles intended to deter applicants and to protect the cash limited budget from unnecessary demands. The barriers take a number of forms. Welfare rights advisers described local unofficial obstacles. They recounted tales of security guards and receptionists asserting that the applicant would be wasting their time trying to get a grant. They referred to offices refusing to accept Crisis Loan claims after 3pm on Fridays because it would take too long to deal with and might eat into the Social Fund Officer's weekend. DSS policy officials confirmed that this unofficial local policy was not unknown. Others described examples of offices introducing new rules as a way of weeding out certain types of application. Some refused to make more than one Crisis Loan award in any six month period for lost/stolen/not received girocheques. Such policies have been uncovered at review by Social Fund Inspectors.

  11.  Advocates were highly critical of the decisions made, suggesting they were sometimes irrational. By way of illustration, the following is an extract from an interview with a welfare rights adviser:

  "One I've got, which is ongoing, which is someone paying his hospital fare to go and visit their daughter. This has been going on for eighteen months now, and they have to apply every three months. I think I've done five reviews so far. I think only two of the awards were all right. Each person makes a different award and decides for this three months it's all right for mum and dad to go four nights a week. Then the next person decides, no, only dad needs to go one night a week, or mum two nights a week. Same case. Nothing's changed, and you never know what decision you are going to get out of it. The last time, they refused it on the grounds that they're asking for an excessive amount of money, that it wasn't reasonable. And they were asking for the amount of a weekly travel card. I can't really work out how that would be unreasonable, because that's the cheapest way of getting there. It's just one example."

  There are a number of illuminating elements about this one story. From the perspective of the claimant, and of the advocate, the variations in decisions appear irrational. Indeed, the advocate believes that there was one "right" award. The problem is that different Social Fund Officers fail to come to that answer. The review process becomes a means of getting that "right" award. This perspective on the Social Fund argues that, because the circumstances of the applicant have not changed, the decision reached should be the same. However, other factors may have changed, particularly the state of the budget and the priorities being met on each occasion. It is quite conceivable that, from the perspective of Social Fund Officers, each of the different decisions appear to be "right" in light of this changing context.

  12.  The nature of discretion is exposed in this one account. The potential for variation in the treatment of the same case is clear because we are able to compare a number of applications for the same item from the same couple. It also throws up a number of dilemmas and questions. The two different perspectives on the series of applications are nowhere reflected in official accounts of the Social Fund. Statistical data presents the number of applications, number of awards and average amounts awarded. Such a summary would suggest consistency rather than variation, in effect presenting a misleading, if not actually false, picture of the Social Fund.

  13.  Furthermore, an applicant, making just one approach to the Social Fund, would receive one decision. Without any form of comparator, how is that applicant to understand the decision made? Publicly available information provides no basis on which to understand any single decision. If the couple, in the quote presented above, made just one application, would they be in a position to understand whether the decision was "right"? Not surprisingly, the response of individuals refused assistance for items can be incomprehension.


  14.  Government publications do not present a very clear picture of the purpose of the discretionary Social Fund. The Secretary of State's Annual Report for the Social Fund does not mention a purpose at all (DSS, 2000a). The Departmental Annual Report provides a brief and rather misleading definition (DSS, 2000b, p.135). Only in the Social Fund Guide (DSS, 2000c) is there some indication of the different elements within the Social Fund and their particular purpose.

  15.  Perhaps the purpose of the Social Fund is most clearly spelt out in a National Audit Office study:

  "The Government's key objectives for the Social Fund are:

    (a)  to support the Government's economic objectives by containing expenditure within the Social Fund budget;

    (b)  to handle the arrangements in a way that does not prejudice the efficiency of the main Income Support scheme (which replaced Supplementary Benefit);

    (c)  to concentrate attention and help on those applicants facing greatest difficulties in managing on their income;

    (d)  to enable a more varied response to inescapable need than could be achieved under the previous rules; and

    (e)  to break new ground in the field of community care." (National Audit Office, 1991, para. 1.5)

  16.  On the basis of the research I have conducted, of which only a broad overview has been presented above, we must question whether the Social Fund has achieved many of these objectives. Certainly, rather than being flexible and responsive to those most in need, my work suggests the Social Fund is rigid and unresponsive, presenting barriers to applicants and bound by targets and rules that hinder its effectiveness. It is only the first two objectives for which there might be clear evidence of success. In handling one-off expenses separately, the Social Fund has not impinged upon Income Support. And, by its very nature, the Social Fund has contained costs. The cash limit ensures that. Moreover, in recent years the emphasis on two key financial targets (remaining within the cash limit and loan recoveries) has increased. They are the only key Social Fund indicators reported by the Secretary of State, underlining the central importance of controlling costs in the very purpose of the Social Fund.


  Department of Social Security (2000a), Annual Report by the Secretary of State for Social Security on the Social Fund, 1999/00, London: The Stationery Office.

  Department of Social Security (2000b), Social Security Departmental Report. The Government's Expenditure Plans, 2000/01-2001/02, London: The Stationery Office.

  Department of Social Security (2000c), A Guide to the Social Fund, Leeds: DSS Communications.

  National Audit Office (1991), The Social Fund, London: Her Majesty's Stationery Office.

  Rowe, M. (1998), "Accountability for Discretion: the Social Fund", International Institute of Administrative Sciences Conference, Paris, September.

Mike Rowe

Research Fellow

Nottingham Business School

January 2001

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