Memorandum submitted by the Local Government
Association (SF 42)
The Local Government Association was formed
by the merger of the Association of County Councils, the Association
of District Councils and the Association of Metropolitan Authorities
in April 1997. The LGA has just over 500 members and its membership
now includes every local housing and social services authority
in England and Wales. The LGA provides the national voice for
local communities in England and Wales; its members represent
over 50 million people, employ more than two million staff and
spend over £65 billion on local services.
SUMMARY
1. The Local Government Association (LGA)
welcomes the Select Committee's Inquiry into the Social Fund.
Such an enquiry is both long overdue and pressing for a number
of reasons—not least because the Fund's rationale and operation
were not addressed as part of the Government's Welfare Reform
Programme but also because the discretionary part of the Social
Fund in particular has been subject to regular and continuing
criticism by a number of welfare organisations.
2. The operation and role of the Social
Fund is of concern to the LGA. Both the NHS & Community Care
Act and the Children Act, the statutory frameworks which define
the scope of local authorities social care duties and powers for
vulnerable adults and children, have at the core of their philosophies
the notion of independence. But to make such independence a reality
often requires financial assistance for basic essentials such
as beds, cookers, clothing etc, and demands a partnership between
health and social care agencies on the one hand and the State
social security system on the other. This partnership should logically
have manifested itself most clearly in the arrangements for Community
Care Grants from the discretionary Social Fund. Unfortunately,
this has not proved to be the case given a system which is cash-limited
and not needs-led. The replacement of a clear regulatory framework
by this highly discretionary system based primarily on recoverable
loans was vigorously opposed by local government and its national
representative organisations at the time of its introduction in
1988.
3. In the LGA's view, it is the cash-limited
nature of the discretionary Social Fund that is its most significant
flaw and has produced some of its worst characteristics—a
high refusal rate; refusal to allow claims; a lack of clear advice
and guidance for potential claimants which has had the effect
of limiting demand; excluded items and greater indebtedness by
those already suffering severe hardship. This has meant that the
process of helping the most vulnerable groups in society is inevitably
inadequate and this, in turn has led to greater pressures on local
authorities—particularly social services—to make up
for the inadequacies of the Social Fund. The Fund's failure to
provide adequate financial assistance for people who wish to live
in the community exemplifies some of the tensions between the
Government's aspirations for its social care policies—which
centre on the principle of Social Inclusion—and the current
scope of social security provision.
THE RELATIONSHIP
BETWEEN THE
SOCIAL FUND
LOCAL AUTHORITY
SOCIAL CARE
DUTIES
4. Local authorities have a legitimate interest
in the overall role of the discretionary Social Fund given that
the underlying objectives of the Fund complement their community
care and general welfare functions. As part of what were known
as the "Fowler reviews" established in 1983, a Government
Green paper—The Reform of Social Security—proposed
a new "social fund" to be administered by what were
then DHSS offices on a discretionary basis. It was claimed that
the Social Fund would advance the objectives of care in the community
for mentally and physically handicapped people, the elderly and
people with mental health problems:
"at present, the social security system
can either be seen as an automatic paymaster, as in the case of
residential care, or as a barrier to the most sensible mix of
cash and services. What we should be aiming for is a more effective
and responsive system which can bring social security resources
and those of local authority personal social services and health
authorities together in a cost effective way to meet social and
financial needs."
5. This partnership between the State social
security system and local health and social care authorities is
given explicit recognition in the current Social Fund Guide in
the section dealing with Community Care Grants where it states:
"CCG's are primarily intended to help
vulnerable people live as independent a life as possible in the
community. Although LA's have the major responsibility for community
care, there are many different ways in which community care grants
can complement care provided by LA's and by other Government and
voluntary agencies" (paragraph 2000).
6. Unfortunately, in reality this relationship
has been extremely problematic, primarily because of the limitations
of the Social Fund budget. In many cases, vulnerable families
have been refused help from the Social Fund and referred to Social
Services for financial help when they had a potential entitlement
to Community Care Grants. Young care leavers have often been turned
away until they could provide evidence that they first applied
for a local authority care-leaver's grant. From October 2001,
most 16-17 year old care leavers will be ineligible for help from
the Social Fund and be specifically excluded from CCG's; the LGA
is concerned that the sum transferred from the social security
budget to local authorities under the Children (Leaving Care)
Act does not include any sum for the loss of those rights and
the assumption of responsibility by social services.
7. People with mental health problems requiring
essential household items to establish themselves in unfurnished
independent accommodation and whose income (from, for example,
incapacity benefit) may take them a few pounds above the level
of Income Support (ie the qualifying Benefit for CCG's) have been
forced to seek financial support from social services.
8. Local authorities have therefore continued
to take on an increasing income maintenance role by either topping
up inadequate awards from the Social Fund or meeting in full needs
which should be met from the Fund. This had led to increasing
pressures on local authority budgets, particularly in respect
of Section 17 monies under the 1989 Children Act. Families in
need are often pushed between the different agencies as a result
or have to rely on charities.
9. The discretionary Social Fund has also
failed to complement other Government initiatives which have similar
objectives. For example, in spite of the approval and funding
of large numbers of Sure Start projects in some of the most deprived
parts of the country there has been no specific increase in the
Community Care Grant budgets of the relevant local Benefit Agency
offices to take into account the inevitably increased demand.
Whilst the significant increases in the statutory Sure Start Maternity
Payment is very welcome, there will be many families within those
project areas who will be eligible for discretionary awards. There
are precedents for increasing the CCG budget to reflect national
government initiatives. In 1998 the Budget was increased by £1
million to contribute towards the cost of rehabilitating homeless
young people.
RESETTLEMENT WORK
10. As this memorandum has indicated, the
Social Fund has a prominent role in resettlement work, which itself
is an important aspect of community care, housing, social security
and social inclusion policies. In the period 1988 to 1998, resettlement
work was regularly undermined by inadequacies in community care
grant provisions. These meant that, in the first place, decision-making
and awards had an arbitrary quality, partly dependent on local
attitudes of Benefits Agency offices and the current state of
the local office budget. People leaving, for example, residential
care or prison, have reliably been recognised as priority groups,
but awards and refusals have varied considerably. Secondly, a
range of hostels and supported accommodation was not deemed as
"institutional care" so that grants for essential furniture
were refused for people being re-housed.
11. Homeless families, for example, have
often been disadvantaged by this interpretation. It has often
fallen on applications to be made under the headings of "easing
exceptional pressures on families" or "helping people
stay in the community" to seek grants, and these have been
subject to wide variations in practice. In 1998 a new sub-direction
allowed community care grants to be considered for those with
an unsettled way of life undergoing a planned programme of resettlement.
After a slow start, this has allowed a number of well-established
resettlement projects to support successful applications for grants,
although expenditure under this heading in 1999-2000 amounted
to just 2.8 per cent of total spending on community care grants*.
Refugees have also been subject to uneven decision-making and
case law, in spite of a recent clarification of possible coverage.
12. Current problems with the Social Fund
and resettlement work include:
(i) the directions which set out coverage
are too narrow. 66 per cent of refusals of community care grants
in 1999-2000 were because the applicants were not covered by the
directions, whilst 17 per cent of refusals were because of insufficient
priority;
(ii) a general view is that grants are again
becoming "harder to get", as the simplified budgeting
loans since April 1999 are more straightforward, prioritised and
quicker. Some applicants have been refused grants and been told
(incorrectly) that this is because access to loans is possible.
Applications for grants were down by 45 per cent in 1999-2000
compared to the previous year, whilst applications for budgeting
loans rose by 26 per cent and for crisis loans by 14 per cent.
Budgeting loans have standardised at an average of about £350-£400
in many regions, but they bring immediate indebtedness and put
new tenancies at considerable risk;
(iii) initial refusals of grants, or small
awards made, are common for some established projects. Yet the
applicants on review are often succeeding, or getting higher awards,
with no extra information provided. These refusals and delays
are frustrating, off-putting and unhelpful, delaying re-housing
and incurring extra costs and staff time. They appear as another
"gate-keeping" measure;
(iv) the level of grants for furnishing a
flat or house is commonly £200 to £800 for successful
applicants with very similar circumstances. The low awards make
it very hard to furnish a home to adequate minimum standards;
(v) several projects are finding that there
is considerable pressure on staff who lack time to provide full
supporting evidence for applications and reviews. Discretionary
decision-making often leaves applicants and staff with little
confidence in the application process;
(vi) liaison with Social Fund staff appears
to vary widely, improving at district level in some areas, but
reducing for several projects at local level;
(vii) many groups have been unable to show
that they have "an unsettled way of life", or fit with
other terminology, and accordingly are refused help;
(viii) other routes to resettlement or re-housing
have not confidently led to the award of grants;
(ix) pilot projects on deposits—currently
outside the scope of the Social Fund—also need to be speeded
up; and
(x) finally, by undermining the prospects
of successful resettlement, the objectives of welfare-to-work
and healthy communities are also compromised.
* Figures from 1999-2000 are from the Social
Fund Report 1999-2000
THE ISSUE
OF PRIORITIES
13. Central to the administration of a discretionary
social fund system is the use of priorities. In the Community
Care Grant Section of the Social Fund Guide, Social Fund Officers
are told to "consider where the applicant's needs fit"
within three broad categories of high medium and low priority.
Local offices have to determine which priority needs can be met
from the money they have been given. The Guide defines "high
priority" need as where an award "will have a significant
and substantial impact in resolving or improving the circumstances
of the applicant and be very important in fulfilling the aims
of Direction 4" (ie the eligibility criteria for CCG's).
The Guide defines "medium priority" need as where an
award will "have a substantial impact in resolving or improving
the circumstances of the applicant, but is less important in fulfilling
the aims of Direction 4". To determine between high and medium
priority need therefore requires an extremely sophisticated and
sensitive form of decision-making and involves a high degree of
subjectivity on the part of Social Fund Officers when considering
the merits or otherwise of a particular claim. Perhaps inevitably,
the degree of autonomy accorded to Social Fund Officers in this
respect has reinforced views that the Fund's administration is
not sufficiently transparent and neither does it allow for an
holistic assessment of the merits of a claim.
14. However, even if it were possible to
make fair and rational distinctions between high and medium priority
needs, that choice is rarely available, given that very few local
Benefit Agency Offices have had the budget to consider medium
priority needs.
CONTROLLING THE
BUDGET
15. Whilst distinguishing between priorities
can be useful in ensuring that the Social Fund budget is kept
under control, the experience of many local authorities suggests
that local offices use a variety of other techniques to keep demand
on the CCG Budget low. The Association has been advised that such
techniques include discouraging claimants from making an application
advising them that they will not succeed and by failing to provide
claimants with accurate information about eligibility criteria.
16. The refusal to allow claimants to even
make an application to the Fund—including applications for
Crisis Loans as well as grants has been a longstanding and continuing
problem but appears to be a recognised form of "gate-keeping"
by local offices. Social Services reception offices regularly
deal with confused and angry claimants who are under the impression
they've been turned down for a grant or a loan but, on investigation,
find that no application has ever been made and that an informal
decision has been made by BA reception staff after a brief conversation
with a Social Fund Officer on the telephone. There have been examples
of Social Services staff actually sending clients with completed
claim forms to local BA offices only to find them returning with
the same form still in their hand.
17. The Association is also concerned about
the degree to which the administration of the fund does not appear
to have given sufficient priority to providing claimants with
clear and accurate advice about the scope of its provisions and
eligibility criteria. The Association has been made aware, for
example, of clients presenting themselves to local authority social
services departments who report that they have been advised that
they cannot get a CCG because they have not been on Income Support
for 26 weeks, when in fact this is one of the eligibility criteria
for budgeting loans. This kind of "misinformation" is
very effective because it is rapidly shared by the friends and
relatives of those claimants. Feedback from the Association's
authorities also suggests that there may be significant numbers
of people in the community who are not aware of the existence
of CCG's and believe the Social Fund only awards loans.
18. The Association's member authorities
also report the failings of BA staff to make clients aware of
additional help from the Fund. This can be illustrated in respect
of what are sometimes called "crisis grants". Claimants
are unable to borrow more than £1,000 from the Social Fund
(and in most cases, a lot less) but who nevertheless run out of
money and require basic needs such as food, nappies etc. There
is specific provision in the Social Fund which places a responsibility
on Social Fund Officers to automatically consider such families
for a grant for daily living needs if they face exceptional hardship.
Very few families are made aware of this, let alone considered
for such payments and, again end up at Social Services where they
are helped with either food vouchers or tinned food donated by
the public.
19. However, since the reform of the Budgeting
Loans system nearly two years ago, there are now further incentives
to direct demand away from the CCG budget and towards loans. The
simplification of the Budgeting Loans process means that applications
can be dealt with almost as quickly as Crisis Loans. Furthermore,
given that entitlement to such loans is based on a relatively
clear set of criteria, application forms are less intrusive and
require less personal information. Vulnerable and in need clients
are inevitably inclined to make a claim for a loan which will
give them the money they need quickly rather than face having
to put together an application with sufficient evidence to be
considered as a high priority need which may take well over a
week to be considered. Evidence from local authorities suggests
that BA staff may also encourage claimants to pursue a claim for
a "budgeting" loan rather than grants. Furthermore,
there is no "second chance" under the new arrangements—separate
applications have to be made on separate forms for Budgeting Loans
and CCG's. Under the old system, a Budgeting Loan award could
always be reviewed and revised if information subsequently came
to light that a claimant should have been entitled to a CCG. Under
present arrangements, claimants have to make a difficult choice
as to which part of the Social Fund they wish to access as a loan,
once awarded, cannot be converted into a grant. In the Secretary
of State for Social Security's Annual Report on the Social Fund
1999-2000 it is claimed that the new arrangements have provided
"a clearer focus" and back this assertion up by referring
to an increase in the number of successful CCG applications (from
19 per cent in 1998-99 to 34 per cent this year). However, the
Association is greatly concerned that this has occurred within
the context of a severe drop in CCG applications (from 1,166,000
in 1998-99 to 643,000 in 1999-2000) and believes that this is
due more to claimants being "steered" by BA staff away
from CCG applications and towards Budgeting Loans rather than
claimants exercising an informed choice.
FUNERALS
20. The provision of payments for funeral
costs is of particular concern to the Local Government Association,
as its member authorities maintain municipal funeral provisions
for those unable to arrange funerals through other means. The
scope of eligible persons entitled to funeral expenses under the
regulated Social Fund was reduced in changes in 1994, 1995 and
1997. The Social Security Advisory Committee's Report in 1997**
was very critical of the way in which successive amendments had
tightened the criteria for entitlement. SSAC recommended that
many of the new proposals, for example the "immediate family
member" test, be withdrawn. In practice, these changes have
led to a considerable drop in the number of funeral payment awards.
Whilst 88 per cent of applications were successful in 1993-94,
this had fallen to 63 per cent in 1999-2000. The total number
of awards fell by 39 per cent in the same period. The complicated
rules on "absent partners" and "close relatives"
amount to an inflexible and insensitive set of exclusions which
produce trauma, despair and practical difficulties. For many who
find themselves unexpectedly and bafflingly refused a payment,
they are an unpalatable shock at the most grievous of times.
21. For example, single mothers are denied
help with the cost of a child's funeral if the father is traceable
and not claiming benefit in the UK—there are no exceptions.
This lack of flexibility fails to take proper account of the plight
of single parents. It is widely held in our society that the death
of a child is the most painful and agonising of losses. Parents
frequently express the view that this is their worst nightmare.
For parents with care whose child has had little or no personal
contact with the absent parent, the rules cause added practical
and emotional problems, and additional distress at a time when
they are least able to bear them. Effectively, they are barred
from carrying out with full dignity the last act of personal care
for their child. Similarly, the "immediate family test"
applies where all surviving parents, grown-up sons and daughters
are not living on benefit in the UK or cannot be shown to have
been estranged from the person who has died. It takes no account
of the fact that many family members are scattered, have problems
budgeting on modest incomes and have their own complicated financial
commitments and plans. Even with the best of intentions, some
of those parents, sons or daughters would be financially unable
to step in and pay for a funeral. It was unjust to introduce a
test such as this without widespread discussion and prior consensus.
** SSAC Report (1997), The Social Security (Social
Fund and Claims and Payments) (Miscellaneous Amendments) Regulations
1997 (SI 1997, No 792), Cm 3585, March 1997.
EXCLUDED ITEMS
22. Excluded items further illustrate the
failure of the Fund to meet its original objectives of complementing
the role of other agencies.
23. There are certain items which are not
available under the Social Fund however high a priority an individual's
needs may be. One of the assumptions made when drawing up a list
of such items was that these would be freely available from other
agencies. For example "medical needs" are excluded from
the Social Fund on the grounds that these can be met by health
authorities free of charge. Unfortunately, the reality is different.
One example is that of nebulisers which are frequently needed
by severely asthmatic claimants and often recommended by hospitals,
GPs etc but are not provided free of charge. No help is available
from the Social Fund and so people have to rely on local charities.
Another example is school uniforms which are excluded on the basis
that they can be provided by local education authorities. Whilst
some authorities do make limited provision available on a means-tested
basis, a recent NACAB report has highlighted that such help varies
and is totally inadequate and that some children have been excluded
from school solely because of the lack of proper school clothing.
These and other examples illustrate how the Social Fund can hinder
the Government's aims of reducing social exclusion.
CONCLUSION
24. Financial assistance for the purchase
of essential items is often a prerequisite to ensuring that vulnerable
people and those in need can continue to live in the community.
In the Association's view, the current structure and functioning
of the Social Fund can combine to deny that assistance to many
such people. This in turn can create additional burdens on local
authorities, the voluntary sector and, crucially, undermine the
ability of people in need to remain living independently, thus
further frustrating the government's social and health care policies
that are centred on the principle of social inclusion.
January 2001
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