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The Social Fund

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The Social Fund House of Commons Work and Pensions Committee The Social Fund Sixth Report of Session 2006–07 Report, together with formal minutes, oral and written evidence Ordered by The House of Commons to be printed 16 May 2007 HC 464 Published on 23 May 2007 by authority of the House of Commons London: The Stationery Office Limited £0.00 The Work and Pensions Committee The Work and Pensions Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Department for Work and Pensions and its associated public bodies. Current membership Terry Rooney MP (Labour, Bradford North) (Chairman) Anne Begg MP (Labour, Aberdeen South) Harry Cohen MP (Labour, Leyton and Wanstead) Natascha Engel MP (Labour, North East Derbyshire) Michael Jabez Foster MP (Labour, Hastings and Rye) Justine Greening MP (Conservative, Putney) Joan Humble MP (Labour, Blackpool North and Fleetwood) Greg Mulholland MP (Liberal Democrat, Leeds North West) John Penrose MP (Conservative, Weston-Super-Mare) Mark Pritchard MP (Conservative, The Wrekin) Jenny Willott MP (Liberal Democrat, Cardiff Central) Powers The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk. Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at www.parliament.uk/parliamentary_committees/work_and_pensions_committee.c fm. A list of Reports of the Committee in the present Parliament is at the back of this volume. Committee staff The current staff of the Committee are Sarah Davies (Clerk), Emma Graham (Second Clerk), Amy Sweeney and Hanna Haas (Committee Specialists), Laura Humble (Committee Media Advisor), Louise Whitley (Committee Assistant), Emily Gregory (Committee Secretary) and John Kittle (Senior Office Clerk). Contacts All correspondence should be addressed to the Clerk of the Work and Pensions Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 5833; the Committee’s email address is [email protected] The Social Fund 1 Contents Report Page Summary 3 1 Introduction 5 2 Centralisation and the Standard Operating Model 6 Crisis Loan Applications 7 Written Applications 11 Use of “warm phones” in Jobcentre Plus offices 12 Phone Charges 13 Alignment Payments 14 3 Decision Making 16 Accuracy of decisions 16 Transparency of decisions 18 Clearance times 18 4 Community Care Grants 21 Budget 21 5 Take-up of the Fund 23 Availability of information 23 Differential take-up 23 6 Financial Inclusion 25 Poverty target 25 Reform 26 Conclusions and recommendations 30 Formal minutes 33 Witnesses 34 The Social Fund 3 Summary The Social Fund provides loans, grants and payments to the poorest in society to meet one- off expenses on necessities and help them to cope with emergencies which cannot be paid for out of regular income. It acts as a financial lifeline and a safety net to many vulnerable people, but its operations have come under much criticism over the past few years. Our predecessor Social Security Committee reported on many inadequacies in the Fund in 2001. The Government has been working to remedy some of the Fund’s problems. There has been an injection of an extra £90 million to the discretionary fund since 2003 and centralisation of operations and a Standard Operating Model introduced with the aim of improving customer service and efficiency. However, during this inquiry we have been presented with evidence of many of the same problems that existed in 2001: outdated distribution of budgets, inaccurate decisions, lack of consistency and poor management information. There is still not enough money in the Community Care Grant budget for all those who have been assessed as having a high priority need, a situation the Social Fund Commissioner described as “unacceptable”. We have also received complaints arising from the Government’s attempts at reform, particularly surrounding the telephony and application process for Crisis Loans. We heard of Crisis Loan applicants whose “fingers ached from pressing the redial button”. We are concerned that the resourcing of the Social Fund is inadequate to remedy the situation in terms of both staff numbers and training. There has been no formal consultation process on reform with no timetable for improvements. We are disappointed that the debate has moved on so little in the six years since the Social Security Committee’s 2001 report. The Social Fund 5 1 Introduction 1. The Social Fund has been an area of long-standing concern for us, and one we have raised both with the Permanent Secretary of the Department for Work and Pensions (DWP) and the Chief Executive of Jobcentre Plus.1 To draw together these issues an evidence session with the Parliamentary Under-Secretary of State with responsibility for the Fund, James Plaskitt MP, was announced in April. We received 11 memoranda as well as a request by the Social Fund Commissioner, Sir Richard Tilt, to come and speak to us. 2. The submissions we received, and the most recent Annual Report from the Independent Review Service, made it clear that there are serious problems with the Social Fund that need to be addressed. Following a series of unsatisfactory answers at the evidence session we decided that a short report was required to set these out. 3. This report does not aim to set out the background and workings of the Social Fund, which is included in the Department for Work and Pensions’ memorandum. Instead it looks directly at the problems brought to the Committee’s attention and seeks answers or reforms. The concerns we received mainly related to the discretionary loans and grants of the Social Fund: Community Care Grants, Crisis Loans, and Budgeting Loans, and therefore this report does not cover its regulated payments: Sure Start Maternity Grants, Funeral Payments, Cold Weather Payments and Winter Fuel Payments. 4. It is evident that the Social Fund is an area of DWP responsibility that until now has not been given sufficiently high priority by the Department and yet is a lifeline for many vulnerable members of society. We hope that this report will encourage the Government to move forward with reform of the Fund, and to address areas of poor performance in its operation, as a matter of urgency. 1 Work and Pensions Committee, Second Report of Session 2005-06, The Efficiency Savings Programme in Jobcentre Plus, HC 834, Department for Work and Pensions Autumn Performance Report 2005, HC 895, Department for Work and Pensions Autumn Performance Report 2006, HC 432 and Jobcentre Plus, Oral Evidence 15 January 2007, HC 218 6 The Social Fund 2 Centralisation and the Standard Operating Model 5. Jobcentre Plus is currently undergoing a modernisation programme which involves centralising the processing of all benefits into fewer and larger Benefit Delivery Centres. Over time the Social Fund will be delivered from 20 of these Centres; 11 are already operating. The DWP memorandum states that “moving Social Fund work into Benefit Delivery Centres will provide the means to: • “Pull together staff expertise to handle complex cases; • “Deliver Social Fund services that are more consistent; • “Better support consistency/quality of decision making; • “More easily introduce new policies and processes; • “Help identify training needs; and • Reduce management overheads”.2 6. Linked to this centralisation programme is the development of the Standard Operating Model, which aims to assist staff and managers “by providing detailed process maps linked to procedural guidance”.3 One significant effect of this on the operation of the Social Fund is that the preferred method of Crisis Loan applications is now by telephone, which we will discuss in more detail later in this report.4 7. We received evidence that the centralisation programme, instead of providing a better service, was doing the opposite. Wolverhampton City Council reported problems of centralising Social Fund work in West Bromwich: “The resources to manage this work do not appear to have followed. We understand that most of the experienced and trained Social Fund staff did not move with the service and our experience was that at times during the summer of 2006 the absence of trained staff meant that the service hardly existed.”5 The Council asked “Why were these problems not foreseen?”6 8. Similar problems were reported by Suffolk County Council following the centralising of operations to a Benefit Delivery Centre in Norwich: “I appreciate from a visit to Norwich BDC that the workers there are under significant pressure. However I am also aware of the impact these operational 2 Ev 33, para 6.3 3 Ev 34, para 6.4 4 See paras 14-44 5 Ev 56 6 Ev 56 The Social Fund 7 changes have had on our mutual customers and the workers in both statutory and voluntary agencies. Together with the inconsistent decision making we are still awaiting the promised improvement to customer service.”7 9. Greater Norwich Supporting Agencies Liaison Group found: “Dialogue in respect of a specific claim has deteriorated considerably with the introduction of the new system. It is unreasonable to expect queries, updates, and questions to be delayed purely on administrative grounds.”8 10. Sir Richard Tilt said that while he was “perfectly happy to support centralisation” he took the view that “what it needs is proper resourcing”,9 an issue we examine in the next section of this report. 11. The Department acknowledged: “this transformation may have brought short term problems some of which may have had an impact on Social Fund delivery but action has been and will continue to be taken to resolve difficulties.”10 12.
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