SOCIAL FUND REFORM – update.
· December 2010 Government White Paper – Universal Credit: welfare
that works – included details of Social Fund reform proposals.
· A key aim of the reform is to protect the budgeting loans, which assists
vulnerable groups.
· The introduction of Universal Credit makes reform essential.
· The Welfare Reform Bill will abolish the discretionary social fund and
replace parts of it with new local based provision and other parts with a
national system of payments on account.
· The local provision will be devolved to local authorities in England and
to the devolved administrations in Scotland and Wales. The measure
will give local communities greater control over the way local services
are designed and delivered.
· The current remoteness of the system makes discretionary decision
making very difficult – for example, a Community Care Grant
application might be made by a customer living in Norwich but it will be
processed by a decision maker in Inverness. Local provision is a better
way of targeting support at vulnerable people.
· Community Care Grants and Crisis Loans for general living expenses
will be replaced by local welfare assistance (from April 2013), which will
be the responsibility of local authorities in England and the Scottish and
Welsh Governments.
· Currently the Welsh Government is considering whether it should
consult on the future services in Wales.
· Nationally Budgeting Advances will replace Budgeting Loans and Crisis
Loans for alignment will be replaced (from April 2013) by a national
provision of payments on account (Short Term Advances),
administered by the Department for Work and Pensions. This new
system will also replace interim payments of benefit so there is a single
system of payments.
· Expenditure on Crisis Loans has risen dramatically since 2006. The
number of Crisis Loans awarded has increased from the relatively
steady state of just over one million a year in 2005-06 to 2.7 million in
2009-10. This increase in applications can be directly linked to
structural changes made to the scheme, and is largely independent of
the recession.
· Since 2006 the number of Crisis Loan awards has tripled. We do not
believe that this increase reflects an underlying increase in genuine
need, as it is largely independent of the recession. Analysis of the
increased demand has shown that it is being driven by young single
people on Jobseekers Allowance, many of them still living at home,
rather than reflecting a more general trend across all the benefit client
groups. There is no discernable evidence to suggest that the increased
demand from this group is linked to an increase in need, as it predates
the recessional rise in youth unemployment.
· Budgeting loans will continue to be available until Universal Credit is
fully rolled out. As people migrate across to Universal Credit they will
have access to a new system of Budgeting Advances that will replace
Budgeting Loans for Universal Credit recipients.
· Funding will be based on Social Fund expenditure rather than Barnett.
Summary of reforms
Current provision Provision from April 2013 Administration in GB from
2013
Cold Weather Payments As now. Universal Credit will become a
qualifying benefit
DWP
Funeral Payments As now. Universal Credit will become a
qualifying benefit
DWP
Sure Start Maternity
Grants
As now. Universal Credit will become a
qualifying benefit
DWP
Winter Fuel Payments As now. DWP
Budgeting Loans As now for existing income-related benefits.
Budgeting Advances available to eligible
Universal Credit recipients
DWP
Crisis Loan Alignment
Payments
Replaced with Short Term Advances. The
new system will also replace interim
payments of benefit so there is a single system
of payments
DWP
Crisis Loans for general
living expenses
Abolished. Replaced with locally based
provision
English local authorities and
devolved administrations in
Scotland and Wales
Community Care Grants Abolished. Replaced with locally based
provision
English local authorities and
devolved administrations in
Scotland and Wales