Where now for local welfare schemes? Damon Gibbons January 2015 Acknowledgements This project would not have been possible without the funding received from the Barrow Cadbury Trust, and the author is also grateful for the support received from the Trust’s project officers, Clare Payne and Clare Gilhooly, over the course of the past 12 months. The report has also benefitted from the input of Sam Royston at the Children’s Society; Paul Rickard at Cripplegate Foundation, Madeleine Thornton at Buttle Trust, and Jason Tetley at Glasspool Trust. The interviews with front-line agencies were conducted by Emma Bates, an Associate of the Centre for Responsible Credit. However, responsibility for any errors or omissions and the views expressed herein are those of the author alone. 2 Contents 1. Introduction .................................................................................................................................... 5 Methodology ....................................................................................................................................... 7 Structure of the report ........................................................................................................................ 8 2. Background to the report ............................................................................................................. 10 The financial pressures faced by low income households ................................................................ 10 Using credit to make ends meet and purchase essential items ................................................... 15 Turning to food banks ................................................................................................................... 18 Defaulting on household bills and ‘going without’ ....................................................................... 20 What has happened to the Discretionary Social Fund? .................................................................... 21 Budgeting Loans and Budgeting Advances ................................................................................... 22 Short Term Budgeting Advances ................................................................................................... 24 The budget for Local Welfare Provision ............................................................................................ 25 The implementation of local welfare schemes ................................................................................. 28 Research Questions .......................................................................................................................... 29 3. Local Welfare Schemes in England ............................................................................................... 30 What types of scheme have been put in place? ............................................................................... 31 The financial out-turn for 2013/14 ................................................................................................... 34 Inconsistencies in reporting .............................................................................................................. 35 Variations in the level of demand ..................................................................................................... 39 Variations in the way that help is provided ...................................................................................... 42 Publicity and promotion ............................................................................................................... 42 Access arrangements .................................................................................................................... 43 Eligibility criteria and refusal rates ............................................................................................... 46 Levels of award ............................................................................................................................. 52 Fulfilment mechanisms ................................................................................................................. 54 Meeting ‘underlying needs’ .......................................................................................................... 61 4. The Scottish Welfare Fund ............................................................................................................ 67 Basic details of the Scottish Welfare Fund ....................................................................................... 68 Review of the first year monitoring data .......................................................................................... 69 Findings from the qualitative research ............................................................................................. 71 Publicity and promotion ............................................................................................................... 72 Access arrangements and application processes ......................................................................... 72 3 Eligibility criteria and decision-making ......................................................................................... 73 Joint working to address underlying needs .................................................................................. 74 Towards a statutory scheme ............................................................................................................. 75 A brief note concerning reviews and appeals ................................................................................... 78 5. English case studies ....................................................................................................................... 80 Which authorities and why? ............................................................................................................. 80 A. Hertfordshire County Council ................................................................................................... 81 B. London Borough of Islington ..................................................................................................... 86 C. Newcastle City Council .............................................................................................................. 93 The Crisis Support Scheme ............................................................................................................ 93 The Supporting Independence Scheme ........................................................................................ 95 Comments from front-line agencies ............................................................................................. 97 D. Portsmouth City Council ........................................................................................................... 98 6. Conclusions and Recommendations ........................................................................................... 104 Key Recommendations ................................................................................................................... 110 4 1. Introduction 1.1 As part of its programme of welfare reforms the Department for Work and Pensions (DWP) took the decision to abolish the Community Care Grant1 and Crisis Loan2 elements of the Discretionary Social Fund in April 2013. Since that date the funding previously used to support this provision has been allocated to upper-tier local authorities in England and to the devolved administrations in Scotland and Wales. 1.2 Government explained3 its rationale for this reform as follows: “...the Social Fund scheme was not working as intended. It had become complex to administer, was poorly targeted and open to abuse. The Government believes that local authorities, with their existing social care strategies and duties, are better placed to determine the support needs of local vulnerable people than the old central and remote Social Fund system.” 1.3 The funding allocation of £176 million per year in England for 2013/14 and 2014/15 was intended to support the provision of new local schemes (referred to by DWP as ‘local welfare provision’). There were no statutory obligations placed on local authorities and the devolved administrations in this respect and the budget was not ring-fenced. However, the funding was identified separately from 1 Prior to April 2013, Community Care Grants were made available to people in receipt of qualifying benefits who faced ‘exceptional’ financial pressures or who needed help to meet expenses in order to prevent them from going into residential or institutional care. Grants could also be awarded to people who were not in receipt of benefits but who were due to leave residential or institutional care within the following six weeks; to help families cope with the expense of caring for a prisoner or young offender who is on home leave; to help people set up home as part of a planned resettlement programme (e.g. where someone has previously been homeless), and to meet essential travel costs in certain circumstances. 2 Crisis Loans were interest free loans of up to £1500 available to anyone over 16 years old who did not have “sufficient resources to meet the immediate short term needs‟ of themselves and/or their family. It was not necessary for applicants for crisis loans to be in receipt of qualifying benefits although they must have been likely to be able to repay the loan. Crisis loans were made to cover expenses arising in an emergency or following