Examination of Witnesses (Questions 360
- 379)
WEDNESDAY 7 MARCH 2001
ANGELA EAGLE,
MP, MR STEPHEN
WATSON, AND
MR CHRISTOPHER
EVANS
360. Are there any statistics available to show
how many, both in absolute numbers and percentage numbers of applications
that are categorised, lower priority applications are granted
and how many medium priority are granted? The impression we have
is that, in practice, medium priority and low priority might as
well not exist and it is only high priorities that get awarded
anyway, and now we have this category of "highest of the
high priorities" as a definition. Is it not somewhat disingenuous
to suggest that there are several different categories when, in
fact, there are not?
(Angela Eagle) I do not think we have.
(Mr Evans) We do not have statistics broken down in
those terms into those categories. There are some statistics in
the annual report, and they may have been in the memorandum you
received, showing reasons for refusal of Community Care Grants;
some of those show insufficient priority as one of the categories
for refusal. It does not subdivide that.
361. I realise that but I am trying to turn
that question the other way round to ask whether any of the lower
categories ever get any money. If they do not, I think it is a
bit misleading for claimants to think there are all these different
bands of priorities when, in fact, they are either a high priority
case or they are not. It may be misleading people into false hopes
of thinking they might get the money, when in practice there is
no hope of getting the money at all?
(Angela Eagle) The system is discretionary and, therefore,
we cannot say to anyone who wants to apply that they have no hope
of getting the money unless they do not fulfil the entitlement
qualifications—ie, they are not on the right benefit. People
have to be allowed to apply if that is what they want to do but
I think the staff do try to guide them as to which area of the
discretionary Social Fund would be the most likely to give them
some assistance. You cannot do that, however, by saying that they
are not allowed to apply to the other areas. They are allowed
to apply even if they are not eligible and, from memory, one of
the largest reasons why Community Care Grants are refused is because
the people that apply for them are not eligible because they are
not receiving the benefits you need to be on in order to qualify.[3]
362. I am certainly not saying that but what
I am saying is that if, in fact, the only grants that ever get
awarded are those that are high priority, to suggest that there
are other categories of priority really is a bit misleading. Either
you are a high priority case, in which case you have a chance
of getting the money—albeit it is discretionary so you may
or may not—or you are just not going to get the money. What
I am concerned about is that people may be given a false hope
that, because they are medium priority, if they apply at the beginning
of the next financial year they might actually get something when
in practice that is not what is happening.
(Angela Eagle) We try to plan over the financial year
so there are not great big lumpy amounts of money available in
May, for instance, so if you are applying in May there will be
a colossal amount of money but if you are applying this month
it will all be gone. There are attempts to budget on a monthly
basis so that you do not get those big swings. Our staff do their
best to guide people as to which bit of the discretionary fund
it would be best for them to apply for. Whether you have high,
low or medium priorities, there is a way of sifting or putting
into a priority order the applications that have been made. There
are always going to be some people at the bottom of that list,
however you choose to describe it, and there are going to be some
at the top and some in the middle. Whether you call it all high,
or some of it low, or some of it medium, we can pay—and
we have to pay—from the top down in priority order. That
is how the system works.
363. I think we have explored that as far as
we are able. Can we move on to the way the Community Care Grant
is supposed to help people set up home, avoid institutional care,
or ease exceptional pressure on families. Again, we have had quite
a lot of evidence that grants are being refused to people in dire
need, for example, for those coming out of prison or being rehoused
after domestic violence or people lacking basic amenities like
cookers, fridges and essential clothing. Do you accept that the
Community Care Grant has a role in trying to help people in those
circumstances and, if so, how do you square that with the evidence
we have been given?
(Angela Eagle) That is its purpose. It was created
in order to dispense grants in the circumstances that are listed
in Direction 4 but, at the same time, there is a cap on the resources
that can be spent. I think the system does the best it can to
stay within the expenditure levels that are set and to fulfil
the priorities in the way in which the Secretary of State's guidelines
and directions tell them they should. The IRS can then have another
look and substitute decisions if it thinks decisions have been
wrong, and that is how the system works. Coming back to your question
whether we are meeting all the need, we are not and, as I said
before, I do not think the old system met all the need either.
You can always put more money in and hope to meet more need. I
am not sure in this area of the welfare system what the correct
amount of money to spend would be because the rules sometimes
influence behaviour and, if you look at the old Supplementary
Benefit Grant system, that is certainly the case. In that system,
80 per cent of the money that was spent went to 17 per cent of
the eligible benefit recipients who could claim and the budget
doubled every two years. Now, that also presents other problems
and, in looking at this very difficult area, we have to see how
best we can get a balance between loans and grants, and meet as
much need as possible.
364. You mentioned previously that you see the
whole fund in relation to poverty as something of a side issue,
but the point I am particularly putting to you is that here we
have people particularly stressed, for example, people coming
out of prison, and if we are genuinely trying to have some joined-up
thinking about, for example, dealing with the behaviour of prisoners
who have come out who may be at the risk of reoffending, I would
have thought they are more likely to if they lack the basic necessities
of life than if they are set up on a very basic basis to try and
make themselves independent and go straight. It seems to me that
we are potentially throwing the baby out with the bath water,
and what would be a relatively modest increase—because the
people coming out of prison are a tiny proportion of the overall
claimant population—could mean that we would be making quite
a substantial contribution to the government's overall crime strategy?
(Angela Eagle) Sure but if we put extra money into
the Community Care Grant system and said "Spend it on prisoners"
the system might not deliver that. It is a discretionary system
where decision-makers decide which the top priorities are. You
put the money in; you cannot control which category of Community
Care Grant claimant it goes to, so we have been doing, on precisely
that issue, a lot of work with the probation service, with the
Benefits Agency being able to go into prisons before people are
due to come out so we can get them on benefits faster. There is
a range of other work we are doing to try and give assistance
and support in that area. The Social Fund and the way it works
is only a very small bit of the work that we can do to assist
people in making that transition so we are doing a lot of that
other work. It is a bit like, when you distribute money through
the SSA to the local authorities, you cannot always guarantee
it is going to end up where you want it to because they quite
rightly have the discretion to spend it, unless it is ring-fenced,
on what they want to spend it on. The decision-makers in the Community
Care Grant system would decide where the priorities were and any
extra money would go to people according to those decisions—not
according to my will as a minister.
365. But it comes back to the guidance given
by the department on how it should be allocated?
(Angela Eagle) Of course, but Direction 4 contains
these different scenarios that Community Care Grants are there
to assist. I cannot say—and I would not want to—to
decision-makers, "You must prioritise prison leavers over
older people who may be able to be kept independently in their
communities by being given assistance now so they do not have
to go into institutional care".
Chairman
366. Is it all a bit of a worry if the budget
is allocated in such an opaque way? I think you have accepted
that no one knows where the unmet need is. Am I right? It may
be impossible to measure but we do not know how much genuine unmet
need there is, based on the criteria. This is not a blank cheque
but should you not know how many people are genuinely entitled
to some of these grants and loans under the specified criteria?
The department really has no way of knowing, has it?
(Angela Eagle) I am not sure there is a way of really
researching it either since somebody's need for extra assistance
to stay out of institutional care may only develop as you are
trying to do the measurements. You can only make a guess. You
know how many people are going to be coming out of prison; we
do not know how many families are going to be under exceptional
pressure at any given time. You can make guesses; you can put
more money in—
367. But does that mean that the kind of levels
are your best guess of what the need is? Is that how the budget
is fixed?
(Angela Eagle) No. The budget was one which we inherited
from the previous government that we have increased since 1994
but, as I said at the beginning, we are meeting more need but
not all of it.
368. Good for you but that is not the point
I am trying to make. You are doing very well under difficult circumstances—we
believe that! What I am trying to get at is: is there an amount
of money allocated on the basis of what was happening last year,
plus some?
(Angela Eagle) Perhaps Chris might be able to give
you some insight as to how they allocate the money.
369. Let us ask some specific questions because
I think Andrew was asking some very important questions in identifying
24 areas that the IRS said to us were district offices operating
at the very highest of the highest level of need. I have just
been looking at the redistribution that took place in December
of the budget. That £4 million distribution within the areas
in December last year—?
(Angela Eagle) That was for the Budgeting Loan system
and we are talking about the Community Care Grant money here.
We can have a much more hands-on view of what is happening with
the Budgeting Loan system than we can with the Community Care
Grant system; they are slightly different.
370. But the question still applies. According
to the lists and figures that I have showing that redistribution,
district offices like Liverpool North and North Cheshire were,
at one and the same time, allocating on the basis of the highest
of high priorities and, at the same time, taking money away from
them. Can that be right?
(Angela Eagle) They are different budgets.
(Mr Evans) I think the point is to distinguish between
the loan budget and the community care budget.
(Angela Eagle) You get a set amount for the Community
Care Grant and that is separate from the budgeting loan grant,
and they are distributed separately. I think, although I am just
guessing, that you are mixing up the redistribution that happened
with the Budgeting Loan system last December with the Community
Care Grant system. I think that is what you have done.
371. I see. Please talk to us, then, about the
process that allocates the global budgets.
(Mr Evans) We are talking about the discretionary
fund here and distinguishing between the loans budget and the
Community Care Grants budget. Each of those budgets is distributed
amongst the various districts to take account of a number of different
factors. Basically it is intended to reflect likely demand and,
to an extent, an assessment of likely need. In the case of the
Community Care Grants budget—and the formula has been explained
in the appendix to successive annual reports if you want further
detail[4]—essentially
it has been based on one factor being the case load of the people
on benefits—giving different weightings to different client
groups, pensioners and others—and also on an indication
of the number of people who have received grants from the fund
in the previous year. Taking those into account, the distribution
between districts was set and that has then been moved forward
from year to year using broadly the same approach over the last
few years. In the case of loans, the focus is particularly on
expected demand and, given the emphasis of trying to get a bit
more consistency between applicants between districts, the aim
has been to look at where the applications were coming in, what
the case load of loans was the previous year, and then to carry
that through to the next year. So that is how it is done at the
beginning of each year. Each year, it is also possible to make
some adjustments if necessary if it is found that there are some
loans budgets which appear to be under-spending and others in
difficulties, and I think that is what you were referring to just
then.
372. If the individual local staff are operating
to very tight caps on some of these budgets, are you confident
that you are getting a full measure of what the need is if people
are saying, "Well, because the budget is exhausted, or beginning
to be, or going to be, then you cannot have what you may otherwise
be entitled to"?
(Angela Eagle) We have to look at why. If there is
flooding or unexpected demand, then there is a contingency budget
and we can refinance some areas and give extra money to top up
budgets. If there has been flooding, for instance, then I can
allocate extra cash to a particular district. In the Community
Care Grant element of it in that budget, since 1997 we have targeted
increases at those districts which we have noticed are meeting
the lowest levels of demand.
373. So you do get that information?
(Angela Eagle) I do not think we get it in big statistics
that we could print—
374. That was the next question!
(Angela Eagle) I do not think we get it in that kind
of form, but we do keep in touch with all of the districts and
they report back to their managers and we know anecdotally where
the pressure is.
375. You are really confident about that?
(Angela Eagle) Well, it is not a system that our analytical
services division would say was robust but we do know if there
have been particular problems in particular areas. For example,
sometimes the sudden closure of a nursing home can have a big
effect on a local budget. If something like that has happened
and there is pressure, I will get a report about it; there will
be an explanation why there has been unexpected issues going on
there or the expenditure is over profile, and we then have the
capacity with our contingency budget to put more money in and
to smooth over some of these difficulties.
376. That is more understandable but what I
am really trying to ask about is whether you can really be confident
at the policy level that the system you have is sensitive enough
to be able to indicate not essential efforts like flood or storms
or closures but that year on year, if there is pressure that has
been capped by the budget, you really understand what that is;
that last year's allocation plus X, whatever it is, really is
not measuring up to the year-on-year upwards pressure that might
be suppressed by the guidelines and the caps that you do not know
about?
(Angela Eagle) I said earlier that I do not think
we do meet all the pressure, and the system did not start off
with an objective measurement of need.
Chairman: I am sorry, I am getting drawn into
issues.
Mr Dismore
377. Following that up, you said that some districts
have money taken away. Is that not an incentive for those districts
who have had a bit of a spending spree to think that is what is
likely to happen to them?
(Mr Evans) Are you talking about Community Care Grants?
378. Yes.
(Angela Eagle) We have allocated much more in the
last year or so in year for budgeting loans and we have changed
the system and the demand patterns were new. It therefore takes
time for you to see a pattern of demand and what is likely to
happen. In order to try to preserve, therefore, a band of consistency
across what the maximum and minimum loans are likely to be, we
have allocated money in year in the Budgeting Loan system and
some districts that have not been spending have had money taken
off them, if you want to put it that way. We have not noticed
any sudden changes of behaviour as a result of the in year reallocations.
379. Do you think you would notice if a certain
Chilterns Home Counties operations manager thought, "This
is a good wheeze; we can get some more money out of the system
doing this"?
(Angela Eagle) I think we probably would notice because
we know what the profile of their expenditure is over time and
if there were sudden peaks or troughs we could investigate why.
If there is an explanation that is plausible then fine and if
it is a sudden spending spree we would know about it, but I have
to say our staff do not tend to behave like that.
(Mr Watson) From a district perspective, could I confirm
what the Minister was saying there? In terms of having a budget
allocated—and I am particularly talking about the Community
Care Grant budget—it is incumbent upon the district manager
known as the area decision-maker to sit down and reflect on what
the likely pressures will be on the budget over the forthcoming
year, and they will do that typically by looking at the historical
experience of where pressures of successful demand are met. That
then has to be profiled and issued not only up the management
line but to people like IRS and other professionals—the
Social Services Department and welfare rights groups. Over a calendar
year, therefore, segmented month by month is a profile of anticipated
expenditure. If expenditure against that profile exceeds a tolerance,
that automatically triggers management action to start probing
along the lines the Minister has mentioned, so there is a systematic
means by which, if someone did suddenly start spending very considerably,
that would be picked up and addressed.
3 Note by Witness: 1999-2000 10.7 per cent of
Community Care Grants failed because the applicant was not in
receipt of a qualifying benefit. Back
4
Note by Witness: Details of social fund budget allocations
can be found in the following sections of the Social Security
Annual Reports by The Secretary of State: 1988/89 Paras 3.6, 3.7
& Annex 3; 1989/90 Paras 3.7, 3.8 & Annex 3; 1990/91 Paras
3.11 to 3.13 & Annex 3; 1991/92 Paras 3.13 to 3.20 & Annex
3; 1992/93 Section 2 & Annex 19; 1993/94 Para 3.34 & Annex
19; 1994/95 Annex 2, 1995/96 Paras 6.3 to 6.4; 1996/97 Paras 6.2
to 6.4; 1997/98 Paras 5.2, 5.3; 1998/99 Paras 6.4 to 6.6; 1999/00
Paras 5.7 to 5.9. Back
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