Select Committee on Social Security Minutes of Evidence

Examination of Witness (Questions 210 - 219)




  210. Ladies and gentlemen, can I reconvene the public evidence session this morning and welcome Bob Holman who is a distinguished writer of many years' standing from the community scheme at Easterhouse in Glasgow. Bob, we have some questions we would like to pursue with you as we are really interested in your experience with the project based approach to dealing with some of these problems and your own work in Easterhouse is in that direction. It might help if you would explain a little bit about the background and history to the project, how it is going and how it could be developed in the future.

  (Dr Holman) Thank you. I do not want to repeat the kind of heavy academic stuff that Gary Craig and others have done. I am not into that. To give an example, I was at our youth club last night—I must be the oldest youth club leader in the land—and a woman came in. She came in because her teenage girl was at the youth club so she felt quite easy about coming into our premises. It turned out that she is, in catalogues alone, paying back £60 a week plus some other debts and she is absolutely at the end of her tether with worry and what she is going to do and so on. This really sums up what our project is about: for people who are in enormous debt, including Social Fund debts, in that we as a community project want to help people who are in enormous debt but we want to do it in a positive way and in a way which emphasises mutuality. For instance, in the case of this woman, whom we know very well and in fact is very good with youngsters, we will probably offer her some sessional work as a youth club worker, making sure of course that it does not take her above the amount that she can earn. This will help her in a small way to pay off some of her debts but it will also mean that she is not being treated in a charitable way because she has been putting something back into the community. That is the nub of our work. Our project is called FARE, Family Action in Rogerfield (our district) and Easterhouse, it started 12 years ago and, significantly, it started just by residents coming together worried about play facilities, worried about drugs and so on. They formed this project which started with a half time worker, that was me, working from our flat, and now we work from six hard-to-let flats which we got because there were some drug deaths in them, and we now have five full time workers, one half time worker and three sessional workers. The main thrust of our project, like any community project, is services which people want: a breakfast club for kids, a cafe, holidays—150 kids taken away every year (that is where my hair went white). Basically you are dealing with collective services but you cannot avoid meeting individual need, people who are completely poverty stricken. In 1999 we had a visit from the Charities Advisory Trust, in particular Hilary Bloom, one of the Lottery Commissioners, who resigned by the way, and they were so appalled by the poverty and the debt in the area that they offered us what they called a hardship fund. Our committee had a very long debate about whether they should take this on board because it has got the obvious implications that it is changing the relationships between you and people. You are giving out money to individuals, it is a charitable role which we had not taken on before, not an involvement role. In the end we did take it on. Within a few months the £2,000 they gave us was gone. In another few months the next £2,000 was gone. We have just come to the end of the third £2,000, so we have gone through £6,000 in a very short time. What we are doing is dealing confidentially, as far as it can be confidential, with people who are in desperate need. If I could just run through the kind of need, I think they will ring a few bells with you. Of the 52 families we have helped there are firstly emergencies which require immediate help. In some ways this corresponds with a crisis loan. If I give one example, a lone mother had her purse nicked at the shopping centre. She reported it to the police. They could not do anything about it; somebody just grabbed the handle of her bag, but all her money had been in it. She had no money for four days until her Giro came. We could immediately tide her over for the weekend. Fourteen grants were made for unanticipated situations. I mention in my paper a lone mother whose teenage son unfortunately was murdered, stabbed to death last year in a gang fight, which is bad enough, but then you receive a funeral bill for £1,840. She did receive a Social Fund grant under the funeral section of £1,200, but she still had to find £640. Her weekly income is £65. You cannot do it. She was absolutely up the wall but we were able to help her, not for all the outstanding amount but for half of it. The third type of case coming to us is for basic domestic items, Social Fund Budgeting Loans, you might say. Of the 52 families whom we have helped, it is worth noting that 72 per cent of them were in receipt of Social Fund loans. In other words, getting a Social Fund loan does not solve your problem. Indeed, as Gary Craig and others have bored you to tears with, I would think, because you are paying back you therefore have an income which is below the minimum which the Government says should be a minimum. I come across people who are paying back £3 a week, £5 a week, £12 a week. It may not sound a lot but then if you put that against the cash in hand they are getting every week after that has been deducted then you have got people who are getting £79 a week, £85, £110 and so on. What is amazing is that some people who are paying back these Social Fund loans do cope for a while. They buy food, they buy clothes, they buy washing up liquid. The crunch always comes when a larger item appears. You have to buy new trainers for your kids, the school outing, you need a new fridge, or sometimes it is even our project. We run very cheap holidays, £25 to £35 for a week away, but if you are going to a woman with a Social Fund loan who has got three kids and you are asking for £75 plus pocket money, she cannot do it. It is a kind of crisis for that woman. People in that position, as was so well said this morning, then seek other forms of credit. That is of course going on to the private market and 54 per cent of the people we have dealt with had both a Social Fund loan and were in serious debt to private lenders. I will just remind you what they are, the people I have met anyway. There are those we call the cheque firms, Shopacheck and the Provvy which you heard about this morning. As I live in the area I meet some of these sales people. They first of all put a pamphlet through the door, "Would you like to spend £500 at the local shops?" Then they call, and it is very much a face to face interview. They come over as very friendly people. They will then offer people a cheque or a voucher which can be spent or cashed, usually in a prescribed shop. You just go along and you buy your £300 worth of goods. But then of course you have to start paying back at 100 per cent interest, and I have known up to 180 per cent interest. You have a little book which the chap ticks off each week as he calls and expects you to pay. That is one form. The second are catalogues, and again, in our area anyway (it may be different in other areas), it is done on a personal basis. Somebody brings you a catalogue and says, "These trainers will be good for your kids" and so on. The third source is shops. We are privileged in Easterhouse to have Crazy George's. I meant to bring a leaflet but I mislaid it on the way, which just says, "No credit checks", "Unemployed people welcome", "Instant credit", and indeed there is instant credit. You can walk into Crazy George's. You will not be asked if you are unemployed or if you have other debts. You can walk out with or they will deliver a large television set or a washing machine, on the day. You do not have to put down a deposit, but the final cost of paying back is over double the initial advertised price of that item. That is an APR of 29 per cent, plus—and this is the catch—the service charge. The fact of not having an enquiry into your creditworthiness is conditional upon you agreeing to pay the service charge, so you are paying back double for your fridge or whatever. These are the kinds of people we are seeing day in and day out. There is a woman who lives right opposite our project. I got her to tot up her income and expenditure. She has got a Social Fund loan and she has got other debts. If you tot up her income and her expenditure, her income is 68p above her expenditure in a good week. If any extra item comes up she has had it. She has reached the stage now where some of her goods are being re-possessed. Given all that, what can our project do? What can a community project do? It cannot get people out of poverty. I do not pretend that. We are about alleviating poverty. It is up to you, I hope, to bring up the recommendations for dealing with poverty in the Social Fund. I do want you to consider if you will that local projects, which are basically run by local people, can help with their hardship funds. They have got these advantages. One is that our projects are run by people who know what life is like at the hard end. We know the loan sharks. We know the drug dealers. We know that there are parents in our area who are supporting teenagers who are receiving no benefits or very low benefits because they have dropped out of the system. There is a big problem here which is not recognised, that there are teenagers who are now not officially in any system. Who is supporting them? Their Mum and Dad who are drawing Income Support. It obviously leads to further family tensions. The second advantage is that we can act quickly. I mentioned in my written evidence about a drug user whom I have known for several years. She used to come to our club when she was a young girl. She has now got some children of her own. She got in debt to a dealer and he said to her, "Here you are, love. First shot free". Next week, "Have some more". But then he turns round and says, "Oh, only the first shot was free. You owe me £600" with accumulating interest. Then the drug dealer says to her, "You cannot pay me back. To put it bluntly, why don't you prostitute to make the repayments?" It was at this point that this young mother came to us and what we had to do was pay for her to leave the area and go and live with her mother in another part of Scotland. We could act quickly. We could do that within a day or two. The third advantage is that the system does not necessarily depend upon poor people approaching us. Because we are in the area we see what is happening. For instance, recently two people who are in work, a low paid couple, have taken on to look after, the baby of their son who has been sent to prison. The mother has abandoned the child. They are having difficulties in getting a guardian's allowance through, so we suggested to that couple that our hardship fund should make a grant for a cot and a pram to help them in the initial stages of looking after this baby. The last advantage I want to bring to you is simply this. Often being in debt to the Social Fund and to other debtors is not just a matter of money. It is about people who are completely demoralised because they are in debt, who are reaching the end of their tether and whose families may break up. Right next to us in a flat a couple were moved into a hard-to-let, which Archie will know about in Scotland, basically because they are £1,200 in rent arrears. Do not ask me how they accumulated that. Then they had this chip pan fire which destroyed the cooker and some of the other furniture. She had a Social Fund loan. The couple were absolutely devastated by it. What happened then was, (a) our volunteers cleaned up the kitchen, all the smoke and the debris that was there, (b) from the hardship fund we then purchased her a new cooker and our project leader went with the couple to select it, and (c) because of this we were able to draw her children into the clubs. They were new to the area and they had not been before. The woman said, "At last I am seeing some light at the end of the tunnel". We are now going to work with her towards paying off the rent arrears as our project leader is an expert in debt counselling. To conclude, what I want to say is would you as a Committee say that local community projects can help people in debt to the Social Fund and other debts, but help them in a positive way, not a charitable way, involving people. But here is the big thing: our projects are also poor. Our particular project does not get any money from the Government, it does not get any money from Glasgow City Council, which is almost bankrupt, so we are always struggling for grants. If we had more money, if we had proper funding, I have this dream that we could buy at cost cookers and washing machines so that if people had a Social Fund loan we could sell it to them much more cheaply. We have a cafe. It is not open all day. We sell cheap fruit and vegetables. That could be extended. This is the most important thing: we could employ more local people. These very people who are in debt, these very people who have Social Fund loans, we could employ them to run the food co-op, the baby co-op, at a modest but proper wage. They would come off benefit and their wages would be put back into our economy. They would not be taken out and spent in the west end of Glasgow, as happens with so many people who work in Easterhouse. That is what I want to bring to you today.

  211. I have listened to your eloquence before and that has actually more or less wiped out most of the questions we had to ask you. Your written evidence is very helpful as well; it is a very powerful statement. Let me ask you this: you say that you get no official Government or local authority funding. On what does the structure sit? You must get some support. Is it charitable money that you have been able to capture because of the uniqueness of the project?
  (Dr Holman) Yes.

  212. Supposing we say that this is a way forward, a model. Can it be translated to other areas? Is there a uniqueness to the community at Easterhouse that you have been living with for so long? Are people like you who have an academic perspective as well as a practical social work background essential to the project? Is it sui generis to you? Could you take this to Liverpool or Manchester and be confident that it would succeed in the way that it has at Easterhouse?
  (Dr Holman) People say that it depends upon me, but it does not. I am now semi-retired and I look after my grandson two or three days a week and so I do much less, but the project carries on completely. Four years ago I completely ran out of money myself and had to work in Manchester for a year. The project still carried on.

  213. But you are talking about moving into five or six hard-to-let premises and working and offering part-time jobs to people so that they can work out of poverty and that fits in with part of the Government's agenda as well, but you cannot do that on fresh air. Where does this core funding come from? What is the project budget?
  (Dr Holman) The budget is about £130,000 a year, less than the Prime Minister gets, employing six and a half people. Where does the money come from? It comes from various sources. I think I have exaggerated in saying Glasgow City Council is almost bankrupt.

Dr Naysmith

  214. Some of it comes from project money from the Government's regeneration funds.
  (Dr Holman) No. The Glasgow City Council do let us have the six flats at half rent. We are arguing for it to be free. The main source of income is from charitable bodies like Gulbenkian, Llankelly, Cadbury, and I think it is quite interesting that a couple of them have, quite unusually, entered into a long term relationship with us.


  215. That is very unusual, is it not?
  (Dr Holman) Yes, not into a three year relationship which is the usual thing.

  216. That would be an essential part of the success of any parallel project elsewhere. You need to get core funding from somewhere.
  (Dr Holman) Long term funding.

  217. Do you think it is important that this should not be institutionalised government funds or local authority funds? Is it important to have freedom, if you like, from bureaucracy?
  (Dr Holman) Can I just take you up on the number of community projects? The Community Development Foundation estimates that two and a half million people are involved in local projects. The database at Community Links has only got 1,500 but that is just the well known ones. There are thousands of community projects, most of which work modestly away and do not have me writing about them in the newspaper. The capacity is there; of that there is no doubt. I would like to see it institutionalised in the sense that I would like to see not all the money but certain amounts of money coming from government to local projects, but here you have to have a bit of a precedent because if a local project like ours ever approaches government they say, "You have got to go to your local authority". You go to your local authority and they say, "We do have a voluntary budget but now we give 90 per cent of it to Dr Barnado's or the National Children's Home because we are contracted with them to run some of our duties", so community groups are getting less now from local authorities than they did before.

Mrs Humble

  218. Are you not involved at all with the new Neighbourhood Renewal Fund investment?
  (Dr Holman) Yes.

  219. You are talking about millions of pounds there. In Blackpool, which is a lot smaller than Glasgow, we are getting £6.5 million over the next three years. The Government announced only fairly recently a doubling of the amount of money that was going into the Neighbourhood Renewal Fund. We are going to get back to the Social Fund—sorry, Chair, we are going off at a tangent but it is an important point. The Government is in the process of setting up the new local strategic partnerships where yes, the council is the leader of that strategic partnership and it is working with people who already have partnership working arrangements with them but the whole point is to allow the local community groups such as yours to have a voice and get into the system and access this new money. What I do not know is whether north of the border there is a slightly different arrangement. Have you been involved in these new initiatives?
  (Dr Holman) Indeed. There is a slightly different arrangement. It is called the Social Inclusion Network in Scotland, SIN for short. I have also read what you said about partnerships in the House. I would be critical in the sense that I think that large partnerships consult community representatives. They do not necessarily give long term funding to local community groups. Also, there is money available through the regeneration project but you have got to bid for it, so it is tied to an agenda which you do not necessarily want to follow. What I am arguing for is that local groups, community projects, should be given amounts of money but they decide the agenda, they are in control of it. I would also add that if there is anything wrong with the urban regeneration programme I take some blame as I used to be Hilary Armstrong's tutor.

  Mrs Humble: Have you recently read a speech by Bev Hughes, the Minister who has been leading on these new local strategic partnerships? From what I read in that the new money allocated is going a long way down the line of what you are advocating. That is new and all I say is, keep an eye out for it.

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