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The Social Fund The Social Fund Current role and future direction Kate Legge, Yvette Hartfree, Bruce Stafford, Monica Magadi, Jacqueline Beckhelling, Line Nyhagen Predelli and Sue Middleton This report reviews the current role of the discretionary Social Fund in combating poverty, and explores possible reforms to the scheme. The discretionary Social Fund, which comprises Community Care Grants, Budgeting Loans and Crisis Loans, was set up to help people on a low income meet one-off expenses and cope with emergencies. This research explores the contribution the Social Fund makes to living on benefits. It draws on a ‘state of the art’ assessment of the fund which involves benefit recipients and members of the public. The report first examines the current role of the Social Fund. Focus groups held with eligible applicants and non-applicants revealed how people cope with living on a low income, and the applicants’ experience of the Social Fund. Analysis of national survey data is used to investigate the characteristics of people in receipt of Social Fund awards, and the repayment of loans. The research also highlights how government support could best address people’s needs. The report draws on both existing recommendations for reform and new qualitative research to propose immediate changes to the current scheme, and a more radical re-design. Its findings will be of interest to academics, practitioners and policy makers concerned with combating poverty and social exclusion, and with the reform of the Social Fund. This publication can be provided in alternative formats, such as large print, Braille, audiotape and on disk. Please contact: Communications Department, Joseph Rowntree Foundation, The Homestead, 40 Water End, York YO30 6WP. Tel: 01904 615905. Email: [email protected] The Social Fund Current role and future direction Kate Legge, Yvette Hartfree, Bruce Stafford, Monica Magadi, Jacqueline Beckhelling, Line Nyhagen Predelli and Sue Middleton The Joseph Rowntree Foundation has supported this project as part of its programme of research and innovative development projects, which it hopes will be of value to policy makers, practitioners and service users. The facts presented and views expressed in this report are, however, those of the authors and not necessarily those of the Foundation. Joseph Rowntree Foundation, The Homestead, 40 Water End, York YO30 6WP Website: www.jrf.org.uk About the authors Yvette Hartfree, Monica Magadi, Jacqueline Beckelling, Line Nyhagen Predelli and Sue Middleton are at the Centre for Research in Social Policy, Loughborough University. Bruce Stafford is at the Nottingham Policy Centre, School of Sociology and Social Policy, University of Nottingham. Kate Legge is at the School of Sociology and Social Policy, University of Nottingham. © University of Loughborough 2006 First published 2006 by the Joseph Rowntree Foundation All rights reserved. Reproduction of this report by photocopying or electronic means for non- commercial purposes is permitted. Otherwise, no part of this report may be reproduced, adapted, stored in a retrieval system or transmitted by any means, electronic, mechanical, photocopying, or otherwise without the prior written permission of the Joseph Rowntree Foundation. ISBN-13: 978 1 85935 472 8 ISBN-10: 1 85935 472 6 A pdf version of this publication is available from the JRF website (www.jrf.org). A CIP catalogue record for this report is available from the British Library. Cover design by Adkins Design Prepared and printed by: York Publishing Services Ltd 64 Hallfield Road Layerthorpe York YO31 7ZQ Tel: 01904 430033; Fax: 01904 430868; Website: www.yps-publishing.co.uk Further copies of this report, or any other JRF publication, can be obtained either from the JRF website (www.jrf.org.uk/bookshop/) or from our distributor, York Publishing Services Ltd, at the above address. Contents Acknowledgements vii Summary ix 1 Introduction 1 The discretionary Social Fund 1 Research aims and methods 8 Structure of the report 10 PART 1 CURRENT ROLE 13 2 Circumstances and needs of the eligible population 15 General experience of living on benefits 15 Strategies for ‘getting by’ 16 Options for when the money runs out 20 ‘Getting out’ 26 3 Recipients and awards 28 Characteristics of discretionary Social Fund recipients 28 Factors associated with receipt of discretionary Social Fund 34 Participants’ experiences of Social Fund applications 40 Amounts of discretionary Social Fund awards 43 Repayment of Social Fund loans 45 The use of Social Fund loans 48 Overview of Part 1 51 PART 2 FUTURE DIRECTION 55 4 Reforms to the existing scheme 57 Existing proposals for reforms to the discretionary Social Fund 57 Needs to be addressed by the Social Fund 60 Eligibility and priorities for the Social Fund 67 5 Reform of the Social Fund 71 Existing proposals for reform of the discretionary Social Fund 71 Models of support 73 Methods of payment and type of goods purchased 79 Policy options 82 Overview of Part 2 90 6 Conclusion 93 The role of the discretionary Social Fund in reducing poverty and social exclusion 93 Policy recommendations and proposals for reform 96 A proposal for reform of the Social Fund 98 Notes 103 References 105 Appendix A: Logistic regressions for receipt of discretionary Social Fund awards 111 Appendix B: Qualitative methodology 118 Appendix C: Costings for the six workshop policy options 124 Appendix D: Estimated costs for a reformed Social Fund 126 vi Acknowledgements Within the Centre for Research in Social Policy, we would like to thank Clare Lawson for valuable administrative support, Sarah Gonzalez for help with the workshop event and Viet-Hai Phung for analysis of the administrative and participant data. This research was suggested by Sir Richard Tilt, the Social Fund Commissioner. We are grateful for his advice and support, and that of Ann Greenshields and Pauline Adey of the Independent Review Service, throughout the project. We would also like to thank Chris Goulden, Principal Research Manager at the Joseph Rowntree Foundation, and the members of the Project Advisory Group (listed below) for their advice and comments on draft reports and working papers. With regard to the survey analysis presented in this report, we would like to acknowledge the data creators and depositors (the Department for Work and Pensions for the Family Resources Survey, the Office for National Statistics for the Family Expenditure Survey and the Office for National Statistics and the Department for Environment, Food and Rural Affairs for the Expenditure and Food Survey), and the UK Data Archive for providing the data. The data depositors and providers bear no responsibility for the analysis and interpretation of the data presented in this report. Crown copyright material is reproduced by kind permission of the Controller of the HMSO and the Queen’s Printer for Scotland. The qualitative research would not have been possible without the skills and experience of the research recruiters, Jean Rushton and Rosie Porter, who found and looked after our participants. We would like to thank all the participants who gave up their time to take part in the research, for their openness in sharing their experiences with us and for their enthusiasm for completing the tasks set. Members of the Project Advisory Group Alan Barton Social Policy Advisor, The National Association of Citizens Advice Bureaux Ashley Kershaw Senior Research Officer, Department for Work and Pensions Professor Ruth Lister CBE Professor of Social Policy, Loughborough University vii The Social Fund Professor Julia S. O’Connor Professor of Social Policy, University of Ulster Michael Richardson Director of the Work, Welfare and Poverty Directorate, Department for Work and Pensions Gill Scott Director, Scottish Poverty Information Unit Sir Richard Tilt Social Fund Commissioner, Independent Review Service viii Summary This report considers the role of the discretionary Social Fund in combating poverty and possible reforms to the scheme. It is mainly based upon secondary analysis of the Family Resources Survey and the Expenditure and Food Survey and qualitative research with benefit recipients: both discretionary Social Fund applicants and non- applicants, and people from a range of socio-economic backgrounds. Participants in the qualitative research discussed times of particular financial hardship, experiences of the Social Fund and possible reforms to the Social Fund. Key findings Current role of the discretionary Social Fund Living on benefits In general, living on benefits was a ‘struggle’. Although recipients had sufficient income to pay utility bills and purchase low-cost food, they did not have enough income for clothes and shoes, children’s school trips and activities, going out, holidays, gifts, or replacing household items. Both applicants and non-applicants were acutely aware that benefits did not provide a sufficient income for them to have items which society, and participants themselves, expected to be able to have, or to participate in the everyday activities enjoyed by their contemporaries. These unmet needs were not one-off, intermittent expenditures or emergencies, but were more persistent and regular. Strategies for ‘getting by’ Benefit recipients coped on a day-to-day basis by: minimising expenditure on, for example, food and clothes carefully managing their money by spreading the cost of paying for items, where possible building up savings juggling the payment of (usually utility) bills. ix The Social Fund When participants had an immediate need but no money their main options were: using savings asking family members for support borrowing money from family or friends that had to be repaid cutting back on expenditure even further by, for example, buying less or buying even cheaper grocery items, going without meals or heating and not paying utility bills taking out loans or buying on credit through catalogues or hire purchase applying to the discretionary Social Fund selling (non-essential) possessions such as a stereo, TV or car – things which participants may have saved up for a long time to buy seeking help from a charity various forms of crime and fraud.
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