Memorandum submitted by Dr Bob Holman
(SF 44)
INTRODUCTION
Locally-controlled community projects are usually
located in deprived areas and run youth and family services for
and by the community. In Glasgow, Family Action in Rogerfield
& Easterhouse (FARE) has existed for 12 years. It is based
on six flats which became hard-to-lets following a number of drug-related
deaths within them. Its committee is elected at an annual general
meeting open to the neighbourhood. Its volunteers and five of
its six staff are local residents. FARE runs youth activities,
classes for adults, a cafe, a breakfast club, holidays for over
a hundred children, befriends demanding children (usually referred
by the schools), play schemes, music clubs, trips and outings,
street hockey etc. Inevitably, its members meet numbers of families
who are in great financial need, including those in receipt of
the Social Fund.
The hardship fund
Officials of the Charities Advisory Trust (CAT),
including its director, Hilary Blume, visited Easterhouse and
observed its social deprivations. In 1999, the CAT offered FARE
a Hardship Fund of £2000 to help individuals in urgent need.
After some deliberations—for it is unusual for a community
project to administer such a fund—FARE's committee accepted
the offer: it was agreed that any transactions had to be kept
confidential as far as possible and that a grant could be approved
quickly by the project leader and one named committee member.
Within seven months, the £2000 had been used. Another £2000
went in nine months and a third £2000 was finished in February,
2001. In all, 52 families (or individuals) have been helped with
an average grant of £115 but ranging from £5 to £400.
The nature of the grants
The grants have been of three kinds. 27 were
about emergencies which required immediate help as the
following examples illustrate.
— A lone mother had her purse nicked
at the shopping centre. The police said they could do nothing.
She and her children faced four days without money until the Hardship
Fund saw her through.
— A woman, dependent upon Income Support,
returned to find her flat smashed and the children's new school
clothes and shoes stolen. It was reported to the police to no
avail. The Hardship Fund replaced the footwear to enable the children
to go to school.
— An unemployed young man, in receipt
of Job Seekers Allowance of £30.30, found himself penniless
on a cold bank holiday weekend. The Hardship Fund allowed him
£5 for a Powercard.
— A teenage mum, whose own parents
were dead, struggled to cope with a young baby. She was at a very
low ebb when she was encouraged by £30 to buy nappies and
baby clothes.
14 grants were made for unanticipated situations.
— When a lone mother's teenage son
was murdered, she received a funeral bill for £1840. The
Benefits Agency contributed £1,200 leaving her to find £640.
On an income of £65 a week, she despaired. Within a few days,
the Hardship Fund helped her.
— An elderly woman was in hospital
with terminal cancer. Doctors said she could be discharged to
her single, unemployed daughter if she could move from her upper
flat to a ground floor one. The Housing Department refused the
transfer until the daughter paid £21 rent arrears and replaced
smashed-in doors. I accompanied her to the Housing Dept but they
would not budge. She had no savings but several debts. The Hardship
Fund was used to help her.
— The father of a middle aged woman
died in Glasgow. Soon after her brother died in Nottingham and
then another brother was taken seriously ill—all with lung
cancer. She was already re-paying a Social Fund loan and a second
application was refused. She had no money left to visit her sick
brother and so the Hardship Fund provided coach fares to the midlands
for the woman and her daughter who were able to see the second
brother before he died.
— A woman, dependent upon Income Support,
was informed that her son in prison had taken an overdose. She
possessed no savings and was re-paying a Social Fund loan. She
was sent a rail warrant to visit him at the prison some 300 miles
away. The authorities would not pay for an overnight stay so,
to get there and back in a day, she had to leave at 5am to catch
the 6.05am train. No buses ran at this hour and the authorities
would not pay for a taxi. The return itinerary meant she arrived
back at past midnight when, again, taxi was the only means of
transport. The Hardship Fund paid the £30 for the taxis and
so enabled her to see her son.
— A 19 year old mother was devastated
by the death of her partner. Estranged from her relatives, she
found it difficult to cope with her four month old baby. A grant
of £30 for baby equipment served to encourage her at Christmas.
9 grants were made for basic domestic items.
— A lone parent with an income of £113
after deductions for a Social Fund loan for a cooker applied for
an additional loan when the bed of one of her children collapsed.
Her request was refused and the girl slept downstairs on the sofa.
The Hardship Fund made a grant of £200 for a bed and bedding.
— A woman, whose unemployed husband
had killed himself, looked after two children and a teenager who
received no benefits from an income of £165. When her washing
machine broke beyond repair, she used those of neighbours until
they got fed up. She was refused a Social Fund loan. The Hardship
Fund provided her with a new machine.
— A young woman (whom we had known
as a girl in the youth club and who had subsequently gone into
public care) became pregnant. She was heavily in debt. The Hardship
Fund provided her with a new pram.
— A couple with two children arrived
in Easterhouse and moved in with friends. The woman was pregnant.
Tensions grew with their friends and they were put into an upper
flat by the council. They had little furniture and their application
for a Social Fund loan refused. The Hardship Fund helped them
purchase carpets, table chairs. (Subsequently we helped them with
a review of their application for a Social Fund loan and it was
granted)
Conned?
In addition to the above 50 cases were two which
did not work out as intended. In one, a young, unemployed man
was made redundant and was soon in debt. He asked for a £100
towards a training course. He lived a few doors from me and I
examined documents about the proposed course and a grant was made.
But he has now disappeared.
In the other, a family (paying back a Social
Fund loan) was in distress because their beloved dog was in the
pound. The mother offered me her last £5 and asked if I would
make up the £10 to release the dog. On arriving at the pound
I was asked for another £40 for "hotel" and medical
fees. By this time the dog was all over the delirious children
and I caved in.
Their financial circumstances
47 of the 50 families were dependent upon Income
Support or Job Seekers Allowance and three had low wages. During
2000, a couple with one young child on Income Support received
£122,80 a week. A lone parent with one child received £94.70.
An individual adult aged over 25, who has paid contributions received
£51.40 in Job Seekers Allowance.
36 of the families, that is 72 per cent, were
in receipt of Social Fund loans (and three of these had had a
second application refused) while another three had had their
initial application rejected. In all 78 per cent of the families
had applied. Families with a Social Fund loan obviously gained
a domestic item and did not pay interest on the loan. However
re-payments were deducted at £5, £7, £12, more
per week. Consequently, many of the families had cash in hand
incomes of £79, £85, £90 a week. It followed that
their income was well below the rates which government had set
as a minimum standard.
None of the families in contact with our project
had savings. Once deductions were made for the Social Fund loans,
they appeared just about to feed their families, buy some clothing
and some household goods such as washing-up liquid, and perhaps
give their children something for school outings. Problems arose
when another major item. Problems arose when another major item
was required be it the replacement of a fridge, fire, TV, or even
shoes or trainers. I have noticed, too, that the cheap holidays
organised by our project, at £25-£35 per child (plus
pocket money), can be a strain on families with two or three children.
A few families have relatives (particularly grand parents) who
help them out. But numbers can not cope. In short, the Social
Fund has not solved their financial distress.
A significant number of families then seek loans/credit
from other sources. Of the 50 families, 27, that is 54 per cent,
had serious debt problems in addition to re-paying Social Fund
loans. Their credit was not from building societies or High St
banks (there are no main-stream banks in Easterhouse) but mainly
from three sources.
First, "cheque" firms such as Shopacheck
and the Provident. Door to door salespeople provide cheques (usable
in certain shops). Apparently, these sales staff are not supposed
to engage with people with serious other debts but in practice
they do. Re-payments can be at interest rates of up to 180 per
cent with payments collected weekly by the salespeople.
Second, catalogues which again are delivered
door to door. The customers select an item, it soon arrives (in
my view the goods are often of dubious quality) and re-payments
are again at high interest rates.
Third, are shops which specialise in low-income
people, including those who are unemployed and in debt and without
carrying out credit checks. In Easterhouse, Crazy George's will
immediately deliver goods to almost any family. A domestic item
may be priced at, say £739 but with APR at 29 per cent plus
service charges, the actual cost is £1636.
Families use these three sources for cookers,
fridges, TVs, washing machines, furniture, bedding, clothes, Christmas
presents. It is easy to say that they are unwise to do so but
if the family lacks what is now seen as an essential item, if
our advertising culture insists that all should have them, if
the children seem to be lacking them (especially a tv, clothes
and presents) then it is difficult to resist the salesperson who
says "You can have it today—just sign here."
Families with multiple debts are often the ones
who come to the notice of FARE.
— A middle aged lone mother lost her
son in a tragic road accident. She has never really recovered
from this and, not surprisingly still has depressive periods.
She has devoted herself to her daughter attempting to provide
her with a well-furnished home and the kind of clothes that other
children have. Her re-payments to the Social Fund, a catalogue,
a shop, and Shopacheck, amounted to £28 a week. Her total
weekly expenditure for gas, electricity, food, clothes, toiletries,
child's leisure, etc plus the re-payments amounted to 0.65p less
than her income. The crunch came when she bought Christmas presents
and stopped some of the payments. The washing machine and sofa
were to be re-possessed. She did not know where to turn. She cut
down on her own food—not her child's—and when I called
she had a slice of corned beef for her dinner and apologised that
she had no milk for the cup of tea she offered me.
Poverty
Why are these families in such financial difficulties?
I know nearly all of them and can state that most are not wasteful
or lazy. On the contrary, I am impressed by those who make personal
sacrifices for their children. I can not think of one family who
has gone on holiday in the last three years except those arranged
by our project.
The simple fact is that they are in poverty
and do not have enough for the needs which surveys indicate are
the norm for society. The rates of welfare benefits (and minimum
wages) have not come as a result of a detailed investigation of
the actual goods and services required for a tolerable life-style,
indeed, when the Family Budget Unit of London University did work
out the cost of a Low Cost But Acceptable standard, those in receipt
of Income Support were up to £39 a week short. Such families
can not save and turn to the Social Fund. As explained, the deductions
from their already very low incomes push some into large debts
with private, high interest companies. These are often the kind
of families who come to the notice of our project. The question
of the Social Fund has to be seen as part of the larger issue
of poverty.
Community projects and poverty
What should be done about the Social Fund? Other
submissions are making detailed proposals which I do not wish
to repeat. I do think that the views of a large sample of applicants
for Social Fund loans and grants should be sought, perhaps through
a straightforward and short postal questionnaire. It should ask
them whether they think the system should be a) left as it is;
b) returned to the pre-1988 system with far more grants; c) have
loans abolished and replaced by a yearly "bonus" for
essential domestic items, and d) other options. In addition, I
hope that recommendations will be made as to how to control the
activities of high interest private companies and shops.
In this paper, I want to concentrate on the
role of local community projects in dealing with residents in
grave financial difficulties. It is relevant because a high proportion
of such people who are in touch with the projects are in receipt
of the Social Fund.
The danger of community projects administering
hardship funds is that the relationship between them and residents
might become one of charity instead of participation. This has
not happened at FARE, probably because its culture, its atmosphere,
is one of welcome and neighbourliness. It is not a welfare office,
there is no receptionist behind a glass panel, no waiting room.
Instead there is a cafe, people enter because they are comfortable
there while their children may be regulars at the clubs.
Further, it must be said that FARE can not solve
financial problems. Occasionally it does have a long-term effect.
A parent, who was making re-payments to the Social Fund and to
a catalogue firm, was further drained by a son who lived close
by who had not worked for 10 years and who sometimes "persuaded"
her to hand over money for his heroin habit. She contacted FARE
when a relative in London offered him digs and an introduction
to a job. The Hardship Fund was used to pay his coach fares. In
London he found also a stable partner. Over a year later, he is
still in a job and is off drugs. But this is exceptional. Usually,
the grants enable families to get through a crisis, they are a
respite. FARE is not the answer to poverty but it can alleviate
its effects.
FARE has found these following advantages in
being a neighbourhood project which is prepared to help residents
with financial problems.
First, its members know about life at the hard
end. They know the sharks and the dealers. They are aware of teenagers
who have no benefits. They know what it is like bringing up children
in an area plagued by hard drugs. Consequently, they understand
the financial problems of those on low incomes while the latter
feel they can approach them as friends not officials.
Second, it can act quickly and with a minimum
of questioning in contrast to the sometimes long delays and heavy
form filling associated with applications to statutory bodies.
A drug-user, struggling to keep her children, was in debt to a
dealer who pressurised her to use her "talents" to raise
the cash. The Hardship Fund was used to get her out of the area
immediately.
Third, the system does not depend upon the needy
approaching the community project. When committee members knew
that a low-paid couple were taking in a child of a lone father
sent to prison, they suggested—in confidence—to the
couple that the Hardship Fund could help.
Fourth, the grants can be accompanied by other
forms of help:
— A couple, with four kids and debts,
were moved into hard-to-let accommodation because they were in
rent arrears. It seemed the last straw for them when a chip pan
fire destroyed their cooker and some furniture. Volunteers from
FARE helped to clear the mess made by the smoke. The children
were drawn into the clubs. The Hardship Fund made a grant for
a new cooker and the project leader went with the couple to choose
it. Now she is working with them to bring down the cash arrears.
The wife said, "At last there is light at the end of the
tunnel."
— A man was in a very low-paid job
while his wife looked after their children. They were not only
re-paying a Social Fund loan but owed £1,600 to an illegal
loan shark who was turning nasty. They were in despair with tensions
growing between husband and wife. They turned to FARE for help.
The Hardship Fund was used to fend of the shark and a place was
found in the breakfast club for their youngest child which has
allowed the wife to go to work.
— A weeping woman, clutching a baby,
came into FARE saying she could not cope. Her debts were such
that she was left with £30 a week to keep a family of four.
Volunteers made her a meal and looked after the baby. The Hardship
Fund was used to pay off her largest debt, for a cooker, while
a member of staff undertook to work with the family on its budget.
Fifth, contacts made through a financial crisis
can lead to adults becoming more involved in FARE, perhaps as
helpers at the cafe, accompanying the trips or residential holidays,
attending the annual general meeting and joining the committee.
This involvement can boost self-confidence. In 1998, seven Easterhouse
residents wrote lengthy pieces which were published in a book
Faith in the Poor. (Lion, 1998) All had financial problems.
The fact that their writings were published, that their abilities
were recognised, that their views were circulated, had a beneficial
effect on the way they functioned. Significantly, with one exception,
they were initially drawn into FARE because of their difficulties.
As one put it, "I have been supported and now I can support
others" (p.48).
Community projects could do much more to alleviate
poverty. FARE has a cafe, although it is open only from 11am—2.30pm:
it sells cheap fruit: it has a store of low-cost nappies along
with second hand prams and safety gates: it employs five staff,
four of whom are local residents. But much more could be done
as follows.
— In areas where there are no cafes,
projects could provide cheap meals all through the day.
— Projects could bulk buy washing machines
and cookers and then sell them at the lowest possible price.
— They could organise fruit and vegetable
stalls selling a variety of healthy food at cheap prices.
— They could run baby co-ops not only
with nappies but also baby food and equipment along with new but
low cost prams, buggies and safety devices.
— They could employ more residents
to run these services. They would receive modest but proper salaries
and these salaries would then be used within the local economy.
Cheap goods would save the money of local residents, the services
would bring them together, the jobs would give them greater incomes
(and take them off benefits). The Hardship Funds would then be
moving from an individual to a collective approach.
Locally-run community projects are found in
many deprived areas. Community Links in London has a data base
of 1,600 of them and there are many more. Unfortunately, the projects
have their own financial problems. FARE, for instance, which runs
a host of services in a neighbourhood lacking facilities, receives
no financial support from central or local government towards
the salaries of its five staff. The Social Exclusion Unit does
say that it values the contribution of such projects but it is
noticeable that its recent strategy declarations in A New Commitment
to Neighbourhood Renewal. National Strategy Action Plan (Cabinet
Office, January, 2001) and National Strategy for Neighbourhood
Renewal: Policy Action Team Audit (Cabinet Office, 2001) have
no proposals to ensure adequate and long-term funding for them.
It may be that the Social Security Committee
will see it appropriate to recommend the financial backing of
local projects so that many more can have Hardship Funds and so
that they may continue and extend their engagement with residents
who have financial difficulties-many of whom are in receipt of
Social Fund loans.
8 February 2001
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