Examination of Witnesses (Questions 120
WEDNESDAY 7 FEBRUARY 2001
120. So it is not only between districts, within
the same district you could have two cases exactly the same, coming
up with entirely different results, depending on when you made
(Sir Richard Tilt) At different times of the year,
121. But if they overspend, does that die at
the end of the year and they start afresh each year? I am just
a bit concerned.
(Sir Richard Tilt) Yes, they start afresh, and there
is some reallocation within year, and there is, again, some recycling
of money that is coming back in repayment on the loan scheme.
122. So, following up on that, is there any
evidence that people are being told, if they turn up in February,
"Go away and come back in April"?
(Ms Adey) No.
(Sir Richard Tilt) I have seen no evidence of that.
123. You would not know?
(Sir Richard Tilt) No, we would not know that.
124. But, equally, people would be entitled
to reapply, a couple of months later, for the same thing?
(Ms Adey) They can reapply to the Fund, but there
is a Secretary of State's direction which stops them reapplying
within six months for the same need, in the same circumstances;
if their circumstances have changed, they can reapply and get
125. So, if people do not know about not just
the postcode lottery but also the calendar lottery, effectively,
they can be screwing themselves up by making a claim at the end
of the financial year, which could quite easily succeed if they
made it only a few days later?
(Sir Richard Tilt) Yes. I do not think it is quite
as stark as you are presenting it, but that feature is there,
that there are changes through the year, at different times of
the year, and there are inconsistencies between different parts
of the country, and which is unsatisfactory from our point of
view, but I would not actually describe it as starkly as you have
126. Just back to the areas where they have
reached their ceiling, do you get a recurrence of that geographical
pattern; you talked about it not having the same characteristics,
but do the same districts repeatedly spend up to their ceiling
(Ms Adey) There is some evidence of that, yes.
127. Has any of this ever been challenged at
law, the ministerial discretion, in the allocations?
(Sir Richard Tilt) Have you got any cases?
(Ms Adey) Not on this particular issue.
128. I mean, by means of judicial review?
(Ms Adey) In the early years, there was a judicial
review which challenged the cash limit and how that was managed,
and the primary legislation changed as a result of that judgement,
but there has not been a challenge directly on the Secretary of
State's right to dish out the budgets.
129. Pauline, you might give us the reference
to that case, the rubric, at some time?
(Ms Adey) Yes.
130. Just following on from the Chairman's question,
presumably, there is no appeal beyond you, other than a judicial
review. Are there any judicial review cases taken, are there statistics
on judicial review involving you?
(Sir Richard Tilt) Yes, we have got them here.
(Ms Greenshields) We have had applications for leave
granted on about 53 cases, and 23 cases actually went to full
hearing, and I think the results were that six went in the applicants'
favour and 17 were upheld.
(Sir Richard Tilt) That is in the last 12 years, or
(Ms Greenshields) Yes, but the judicial review activity
131. So it is not a recent occurrence?
(Ms Greenshields) No; it works out roughly at about
one in every 11,000 decisions that we make at the IRS.
132. Can I ask you about crisis loans. You have
said, in your paper, that there are certain types of applications
for crisis loans which are currently being refused under the new
formula which would have been allowed under the old system. Can
you give us some examples of the sorts of unmet need under the
present system, please?
(Ms Greenshields) I think, actually, the paper was
referring to needs that might have been met under the old Budgeting
Loans scheme, just for example, cookers, beds, that sort of thing,
because the Budgeting Loans decisions are now taken on a formulaic
basis and urgency of the need is not considered, and those types
of needs may, in some cases, not be met, depending on whether
the applicant has a debt already.
133. So you would have to go for a crisis loan
(Ms Greenshields) Yes, and the conditions for a crisis
loan are quite strict, they are about helping in an emergency,
or as a consequence of disaster, but only where a loan would prevent
serious risk or serious damage to health or safety. So there is
just a little bit of a gap in the provision, in terms of the urgency.
134. So is a refusal of an application for a
Budgeting Loan a factor to be taken in your favour when determining
whether you should get a crisis loan?
(Ms Greenshields) The direction that deals with crisis
loans actually was amended at the time of the changes to the scheme,
from April 1999, saying that refusal of a Budgeting Loan will
form part of the considerative process. But this is one of the
problems that we have had with that particular amendment, in that
it does not actually seem to make any difference to the cases
that would have qualified for a crisis loan under the old scheme,
it does not seem to allow any additional people to qualify.
(Sir Richard Tilt) I think that was the intention,
the way it is drafted does not seem to lead decision-makers in
that way, really, but I think that was the intention.
135. Crisis loans really are the last chance
saloon, are they not; what is your understanding of the rate of
refusal, in relation to crisis loans?
(Sir Richard Tilt) We have got some figures somewhere,
have we not?
(Ms Greenshields) I do not think I have actually got
them to hand.
(Sir Richard Tilt) Can we see if we can sort those
(Ms Greenshields) Yes.
136. If these are complicated tables, just leave
them with us?
(Sir Richard Tilt) Yes. The figures are all set out
in the latest Annual Report by the Secretary of State for Social
Security on the Social Fund.
137. Is it a high rate?
(Ms Greenshields) The 1999-2000 year, there were 1.2
million crisis loan applications, and 336,000 refused; so we are
talking about a quarter.
138. We can deduce from that it is quite a big
failure rate, is it not?
(Sir Richard Tilt) Yes.
139. Can I ask you another question, on the
repayment rate. My understanding is that that is not an issue
which can be the subject of a review; do you think it should be?
(Sir Richard Tilt) Yes, I think I do. I think it does
concern us that the rate of repayment, if it is set and accepted
at 15 per cent, is a large piece out of a subsistence level of
income, and it is not something we are able to deal with at all.
It could either be something that did become an issue for us,
or some greater flexibility is required, I think, at the Benefits
Agency in handling it. I think it is one of those things that
ought to be discussable and reviewable and changeable, as people's
19 See Ev. p40. Back