Select Committee on Social Security Appendices to the Minutes of Evidence


Memorandum submitted by the Homeless Network (SF 39)


  This paper contains Homeless Network's evidence to the Social Security Select Committee's inquiry into the Social Fund.

  Paragraphs 1 and 2 introduce Homeless Network.

  Paragraphs 3 to 6 introduce our submission, note the importance of Social Fund payments to homeless people undergoing resettlement, and identify three main areas of difficulty with the Fund.

  Paragraphs 7 to 15 discuss the problems created by restrictive eligibility criteria for Community Care Grants and Budgeting Loans. Paragraphs 12, 13 and 14 suggest three ways in which eligibility might be widened.

  Paragraphs 16 to 22 discuss the problem of inconsistency. Paragraph 18 suggests that Community Care Grants might be awarded to pay for categories of expense, rather than individual items.

  Paragraphs 23 to 28 discuss administrative complexity. Paragraph 27 suggests that a change in practice as to the timing of certain Community Care Grant awards.

  Paragraphs 29 and 30 conclude our submission.


  1.  Homeless Network is the co-ordinating and support organisation for the key voluntary sector agencies working with single homeless people in London. The services provided by our member agencies include outreach, emergency and second stage accommodation, day centres, resettlement services, permanent and supported housing, floating support, family mediation, and employment and training initiatives.

  2.  We are pleased to have this opportunity to submit evidence to the Social Security Select Committee on the subject of the Social Fund. In this submission, we set out our views on the current role and working of the Fund, and make some suggestions for its future, which are printed in bold type. Our evidence is based on the day to day experience of our member agencies in working with thousands of homeless and newly resettled clients every year.


  3.  This submission does not discuss the Regulated Social Fund, and we deal only briefly with Crisis Loans. Rather, we concentrate on Community Care Grants (CCGs) and Budgeting Loans (BLs). It is these payments which are of particular concern to our member agencies and their clients, because of their importance to the successful resettlement of many formerly homeless people. For those who are eligible, CCGs and BLs are the main means of funding the purchase of furniture and essential household items when moving into independent accommodation.

  4.  On one level, the significance of this is obvious; an unfurnished flat may offer little more amenity than the street—and a good deal less than a hostel room—if the resident is unable to sleep comfortably, to prepare food, to store possessions and clothes properly, and so on. This, we believe, is itself justification for regarding the Social Fund as being of the highest importance in ensuring successful resettlement. However, the ability properly to equip and furnish a home also has, for many people who are being resettled, a profound psychological importance.

  5.  The move into permanent and independent accommodation, perhaps after many years or for the first time ever, can represent a significant change in a homeless person's way of life. The prospect of a different pattern of living, the responsibility which a tenancy entails, and the legacy of past disappointed expectations, may combine to make this a time of some stress. In these circumstances, the more that can be done to smooth the transition, the better the chances of the new tenancy being successful. In the words of one of our member agencies, which provides a Tenancy Sustainment Team for former rough sleepers, funded by the Rough Sleepers Unit, "the provision of essential furniture items has a real effect on the investment into the success of a former rough sleeper's tenancy. Not only does it give practical help, but it adds to the sense of ownership". In our experience, there are times when timely, and reasonably generous, help from the Social Fund can make the difference between the success and failure of a new tenancy and thus of the whole resettlement process.

  6.  In April 1998 the Department of Social Security (DSS) introduced Social Fund Direction 4(a)(v), which provides that a CCG may be paid to help a person set up home in the community as part of a planned programme of resettlement after a period during which they had been without a settled way of life. We welcomed, and continue to appreciate, this direction both for its practical effect in easing CCG claims by formerly homeless people, and because it recognises the importance of the Social Fund in the resettlement process. However, our member agencies report that there are still problems with the Fund. These problems, which we will describe in the remainder of this submission, may be summarised as eligibility criteria; inconsistency; and administrative complexity.


  7.  Community Care Grants and Budgeting Loans are only available to applicants who are at the time of application (or, in the case of CCGs, will soon be) receiving Income Support (IS) or Income-based Jobseeker's Allowance (I-JSA). Because both of these benefits have stringent means tests, the intention and effect is to limit eligibility for CCGs and BLs to some of the very poorest applicants. Many single homeless people do receive one or other of these benefits, and are thus able to apply for one or other of these payments. However, for some of our clients, this limitation causes difficulties. Claimants who have a sufficient contributions record to receive Incapacity Benefit (IB) or Contribution-Based Jobseeker's Allowance (C-JSA) are unable to apply for CCGs and BLs, even though their circumstances may be no better off than if they were on means-tested benefits. Similarly, if a person is working, no matter how low their earnings and how limited their capacity for savings, they cannot apply for a CCG or BL if their wage level and work pattern takes them off either IS or I-JSA.

  8.  We believe that this crude limitation of access to the Fund is undesirable for two reasons. First and most obviously, it causes hardship. For the reasons suggested at paragraph 5 above, it can hinder the resettlement process; as one day centre welfare rights adviser has pointed out, "many individuals who fall into our client group receive IB and this has a disastrous effect on our ability to get them housed in a long-term settled environment; this being due to the fact that they are unable to get access to monies from the Social Fund to turn an empty flat into a home that a person wants to live in".

  9.  The same adviser makes the point that lack of access to the Fund can make it difficult for people to maintain themselves in the community: vulnerable people are unable to maintain their homes and essential equipment in a habitable condition and thus risk becoming homeless. There is, we believe, a fundamental contradiction between enabling people to remain in the community rather than enter care—a purpose for which, under Social Fund Direction 4(a)(ii) a grant may be paid—and limiting this assistance to those who happen to be in receipt of two particular benefits. It should also be noted that there is no choice for a claimant as to whether to receive Incapacity Benefit or Income Support, and that entitlement to Incapacity Benefit is not time-limited; provided the contribution conditions have been met, entitlement continues as long as the incapacity lasts. Thus many people, with no other resources than benefits, may nonetheless find themselves arbitrarily excluded from access to an important part of the social security system for no other reason than that at some point in the past they worked enough to accumulate a contributions record.

  10.  Second, this restriction of eligibility acts as a disincentive to work. Many homeless people would like both a home and a job. The move towards independent living in the community, and the move towards greater employability, may go hand in hand. It is often difficult to predict when either a tenancy or a job offer may arise. A person who is offered a job before a tenancy is therefore in a difficult position. If they refuse the job, they may lose a valuable opportunity (and perhaps lay themselves open to a JSA sanction); but if they accept the job and leave benefit even one day before they receive their tenancy, they may find themselves without the wherewithal to furnish and equip their new home.

  11.  We believe that this is inconsistent with the current emphasis on work as the best form of welfare. Elsewhere in the social security system, the prospect of even short-term work is being made more attractive through benefit run-ons and more generous linking rules. Something of this was extended to the Social Fund when the 26 week period of receipt of benefit required for eligibility for a Budgeting Loan was adapted to permit any number of short breaks. Yet the rule remains that no person who is not on IS or I-JSA can receive a CCG or BL, regardless of their overall financial circumstances.

  12.   We therefore believe that the crude and restrictive link between CCGs and BLs, and IS/I-JSA, should be broken, and replaced with some more sophisticated model of targeting. At the very least, eligibility should be extended to those who receive Housing Benefit (HB) and/or Council Tax Benefit (CTB) at the same rate as if they were on IS/I-JSA; this would extend eligibility to those who were on very low wages, or more realistically on IB, C-JSA, or the basic Retirement Pension, but, because HB/CTB have an almost identical means test to IS/I-JSA, would ensure that Social Fund eligibility continued to be restricted to the poorest claimants. This would also allow people who had very recently started work, but were continuing to receive full HB/CTB during the four-week Extended Payment period, to receive help from the Fund if appropriate.

  13.  More generously, those who were in work but had had a pattern of moving in and out of benefit might be made eligible for CCGs/BLs. This might build on the rule, referred to above, whereby when the 26 weeks of receipt of benefit required for eligibility for a Budgeting Loan is calculated, breaks of up to 28 days are ignored. This rule recognises that when people are moving in and out of work, they may remain within the benefits "envelope"; for instance, their capacity for saving is very limited. It would seem to be consistent with this principle to allow people who were working, but within the benefit "envelope", to receive CCGs and BLs as if they were actually on benefit.

  14.  Finally, the Social Fund might operate a means test of its own, independent of IS/I-JSA but based on similar principles.

  15.  Any of these changes would make the Social Fund more responsive to the needs of people on very low incomes. Of the three, an independent means test would be the fairest, but would also be the most administratively complex, and might hinder the capacity of the system to meet urgent needs. The question of extending eligibility to some workers within the benefit "envelope" might be explored further. However, we can see no reason in principle why HB/CTB, if received at the full rate, should not now be added to the current qualifying benefits. (We recognise that it is ultimately intended to reform and perhaps replace HB; but we understand that this is unlikely to happen for some time, and any link with Social Fund might be reconsidered when we know what form any reformed accommodation benefit might take.) In the meantime, designating HB/CTB as qualifying benefits for CCGs and BLs would be entirely consistent with the current policy intention of focussing these payments on the poorest applicants, should be reasonably straightforward to administer, and would meet many of our concerns about exclusion of people on IB, C-JSA and Retirement Pension.


  16.  Since Community Care Grants and Budgeting Loans are discretionary payments, it is in their nature that the size of awards will vary to some extent. However, this is in our experience an aspect of the Fund that is widely resented by applicants, and which appears difficult to defend logically. (This is particularly the case with CCGs, since BLs have moved to a much more regulated system; unless otherwise stated, therefore, it is to CCGs that the following comments apply.) Budgetary considerations mean that the success of CCG applications will vary between offices and districts, and at different times of the budgetary year; but there can also be noticeable inconsistencies in the treatment of apparently similar applications submitted to the same office at the same time. These inconsistencies often appear to have little, if anything, to do with the level of need which is being presented, and have given the Fund the reputation of being something of a lottery.

  17.  Inconsistencies are exacerbated by the system of priorities, whereby each Social Fund District, in managing its budgets, decides whether high. medium, or low priority applications can be met. In practice, these priorities often seem to apply to individual items for which payment is requested, rather than to the application as a whole. For example, if a CCG is requested to furnish and equip a flat, the applicant will be asked to give details of the items s/he wishes to purchase, and each item will then be awarded or refused. In this instance, a cooker would almost always be paid for, but funds for a fridge would be very rarely awarded unless the applicant could show some additional need (for example, to store medication).

  18.  We believe that breaking down awards in this way is unnecessary, time-consuming, and often unjust. (It is also of limited effect, since an applicant who receives a CCG will almost always spend it according to his/her own priorities rather than those laid down by the Fund.) One of the most welcome of the recent reforms to Budgeting Loans was that instead of making awards for individual items, awards can now be made to pay for any of a small number of categories of expense (for example, furniture and household equipment; clothing and footwear; travelling expenses). The applicant is simply required to indicate the categories into which his/her needs fall. We believe that it would be worth exploring whether a similar system of categories might be applied to Community Care Grants. Such a system might, in our view, be quicker, cheaper, and easier to operate, might better reflect the realities of the circumstances which make CCGs necessary, and might be more widely accepted by applicants and their advisers.

  19.  It has sometimes suggested that, for some or all homeless people undergoing a recognised programme of resettlement, a new form of regulated grant might replace CCGs as a means of furnishing and equipping a new home. This "resettlement grant" might be based on a fixed amount, agreed to be sufficient to furnish a property of a given size to a modest but adequate standard, and might be paid to those who might otherwise qualify for a Community Care Grant under Direction 4(a)(v). The attractions of this proposal are clear; it would be reasonably straightforward to operate, could be paid quickly when need arose, and, being of a fixed amount, would enable the applicant and the agencies working with them to plan more confidently for the future.

  20.  Some of our member agencies would support such a proposal. However, in discussion others have pointed out that it has possible disadvantages. Any such grant would probably require some element of gatekeeping by resettlement agencies, even if only to certify an applicant's eligibility; and some agencies feel that this would adversely affect their relationship with their clients, and their ability to act as advocates on their behalf. Furthermore, the identification of a modest but adequate level for a "resettlement grant" might in practice mean that awards of Community Care Grants to other applicants would also be limited to this amount, even though a higher grant is often desirable because it enables applicants to furnish their homes to a higher standard and thus increases the chance of their remaining in them.

  21.  On balance, therefore, we are not at present wholly convinced of the case for a separate resettlement grant, although we would be happy to explore the idea further. Instead, we would rather see the working of the Fund, as it currently stands, improved, by widening eligibility, and by grouping expenses, as proposed in paragraphs 12-15 and 18 above.

  22.  This section of our submission has dealt almost entirely with Community Care Grants. This is because there is less scope for inconsistency within Budgeting Loans since they were reformed, and effectively placed on a much more regulated footing, in April 1999. However, we do wish to register our concern that because one of the criteria upon which the size awards is decided relates to the composition of the applicant's household, the amount of help available to single people (who comprise most of our member agencies' clients) has been reduced.


  23.  The more regulated regime which now applies to Budgeting Loans has made that part of the Fund quicker, simpler, and more predictable. However, the Community Care Grant process often, in our experience, remains complex and cumbersome. In the first place, it is not easy for an unassisted applicant to get an appropriate award. In the almost universal experience of our member agencies, a successful and appropriate CCG application for a homeless person undergoing resettlement requires detailed and expert support from an adviser or resettlement agency; an unsupported, or poorly supported applicant, rarely succeeds.

  24.  To some extent this is understandable, especially where the application is made under Direction 4(a)(v), since in that case the requirement for a planned programme of resettlement means that evidence of such a plan will need to be produced. However, we do not believe that in principle the Social Fund, or any part of the social security system, should require an applicant to have expert advice in order to obtain what they need. That such advice is in practice needed relates, we believe, in part to the discretionary nature of CCGs; one needs to know what information will persuade an Social Fund Decision Maker to exercise his/her discretion. Any reform to the Fund should therefore look at ways of making it, as it should be, accessible to all applicants, whether supported or not.

  25.  We are concerned at the length of time that it can take to receive a CCG or BL. For example, experienced resettlement workers have informed us that while applications for CCGs under Direction 4(a)(v) usually succeed in the end (in part because resettlement workers often do not advise clients to apply under this direction unless they are reasonably sure that the client will be eligible), it may well be necessary to go to first or second stage review before an appropriate decision is made. All this takes a great deal of time and may mean, for example, that a homeless person who is being resettled may not receive the means to furnish and equip their new home until some time after they have taken up the tenancy.

  26.  Delays in assessing initial applications are, no doubt, due in part to the overall pressure of work on local Social Fund sections. However, some of our member agencies report what appears to be a consistent pattern in some offices of refusing applications initially, and granting them on review. We do not know whether some offices operate a local policy to this effect; it is fair to say that when we have raised the suggestion with the Benefits Agency, it has been denied. It certainly appears to us that the complexity of the application and assessment process must contribute to delays, and we would hope that some of the simplifications which we have suggested above might speed the process.

  27.   We have one specific suggestion which would allow more time to process CCG applications under Direction 4(a)(v). This is that local Social Fund sections should be encouraged to consider, where appropriate, making awards under this Direction before the applicant had accepted the tenancy of their new home. At present, the almost universal practice is to make the application once the tenancy has been accepted; this appears to be based on a fairly general understanding that the CCG would not be awarded until then. Because of the very short period (sometimes as little as a weekend) which many local authorities and Registered Social Landlords allow to elapse between a new resident accepting a tenancy and the tenancy starting, it is often simply not possible to furnish a property before the tenant becomes liable to pay rent on it (and therefore, because of the restricted circumstances in which Housing Benefit will be paid on two homes, has to move in). The tenancy therefore begins on a bad footing, with the tenant either having to "camp out" in the new home, or not being able to move in and claim Housing Benefit until they receive their CCG, thereby accumulating rent arrears from the outset.

  28.  There is in fact nothing in Direction 4(a)(v) which requires the applicant to have received a tenancy; the Direction simply refers to setting up home in the community as part of a planned programme of resettlement. CCGs could, therefore, currently be paid in advance of a tenancy being received; the requirements of a person equipping a new flat do not vary greatly from case to case, and the necessary involvement of a resettlement agency in applications under this direction should prevent frivolous or inappropriate applications. The grant, once awarded, might either be held by the Benefits Agency, or paid (with the applicant's consent) to the resettlement agency in question, until such time as it were needed. This measure would greatly ease the difficulties faced by formerly homeless people moving into permanent accommodation at short notice, and could be effected simply by adding to the existing Social Fund guidance.


  29.  Homeless Network believes that there is much that could be done to enable to Social Fund to respond more effectively to the needs of its clients, including homeless people undergoing resettlement. In this paper, we have indicated some of the areas in which the Fund is deficient, and have suggested some ways in which it might be improved.

  30.  We would be very happy to explain our position and ideas further in additional written or verbal evidence to the Committee.

January 2001

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