APPENDIX 7
Memorandum submitted by Trevor Buck, University
of Leicester (SF 15)
SUMMARY
1. This memorandum sets out some brief biographical
details of the author, a brief description of the regulated and
discretionary Social Fund schemes and their origin. My submission
mainly addresses issues relating to the discretionary scheme.
2. It highlights a number of key developments
and practice features of the discretionary Social Fund that have
occurred in the last 12 years.
3. It concludes with a framework for strategic
thinking about the future of the Social Fund. This includes the
identification of a number of options for reform ranging from
minimalist changes to a fundamental re-assessment of policy in
this area.
Biographical Details
4. I am a Senior Lecturer in Law at the
University of Leicester and the author of The Social Fund:
Law and Practice (2nd ed) Sweet & Maxwell, (2000). (A
copy of my book accompanies this submission).[9]
8 I have taught and researched social security law and policy
issues for the past 15 years. I was the consultant Legal Adviser
to the Social Fund Commissioner and Inspectors from 1993 to 1996
on secondment from the University. I am currently leading a research
project funded by the Nuffield Foundation on the work and role
of the Social Security and Child Support Commissioners.[10]
Description and Provenance of the Social Fund
5. The "Social Fund" can be described
as two schemes. First, there is the "discretionary"
Social Fund which makes provision for Community Care Grants (CCGs),
Budgeting Loans (BLs) and Crisis Loans (CLs). Secondly, there
is the "regulated" Social Fund that makes provision
for maternity, funeral and heating expenses.
6. The use of discretion in social security
law has a lengthy history. There have been a number of policy
shifts in the post-Beveridge era between providing for exceptional
needs and circumstances through discretion and entitlement respectively.[11]
10
7. Both the regulated and discretionary
schemes are derived from the Social Security Act 1986. Maternity
and funeral expenses and cold weather payments came into effect
in April 1987; the discretionary scheme came into effect in April
1988. The concept of the Social Fund arose from the "Fowler"
reviews of social security undertaken in the mid-1980s. The Government's
proposal to establish a Social Fund, and the way in which the
legislation was introduced, is outlined in my book.[12]
8. The introduction of the discretionary
Social Fund was contentious as the scheme incorporated elements
which had not appeared before or were not thought appropriate
for inclusion in the social security system. These elements were:
— the discretionary form of
the scheme;
— the introduction of loans;
— the introduction of a budgetary or
cash-limiting principle;
— the provision for "community
care" needs;
— the remedy of a "review"
rather than an "appeal";
— the choice of subordinate legislation—"directions"
issued by the Secretary of State and not laid before Parliament,
rather than regulations made by way of statutory instrument.
9. One principal pressure for reform had
been the perception that the previous "single payments"
scheme available for claimants of supplementary benefit had spiralled
out of control.
THE DEVELOPMENT
AND PRACTICE
OF THE
DISCRETIONARY SOCIAL
FUND
Discretion
10. Although the structure of the legislation
is such that decision making is discretionary in form, the practice
has been that the majority of Social Fund payments are in fact
made in much the same way as the mainstream social security benefit—i.e.
by the application of rules. The Table below shows that a failure
to meet the eligibility condition (i.e. "not in receipt of
a qualifying benefit") accounted for 10.7 per cent of all
refusals in 1999-2000 and a failure to meet the qualifying condition
(i.e. Direction 4) accounted for 66.1 per cent. The genuine discretionary
element of decision-making is represented by the category "insufficient
priority" which only accounted for 17.3 per cent in that
year (and much less in previous years).
Table: Reasons for refusal of applications
for community care grants: 1994-1999
| 1994-95 | 1995-96
| 1996-97 | 1997-98
| 1998-99 | 1999-2000
|
| Savings > £500 | 0.2%
| 0.2% | 0.2% | 0.2%
| 0.2% | 0.4% |
| Not in receipt of qualifying benefit | 5.8%
| 5.6% | 6.8% | 7.3%
| 8.1% | 10.7% |
| Excluded items | 1.3% | 1.4%
| 1.5% | 1.6% | 1.0%
| 1.9% |
| Amount <£30 (not travel expenses) |
0.1% | 0.1% | 0.1%
| 0.1% | 0.0% | 0.1%
|
| Direction 4 not met | 83.1% |
84.4% | 82.6% | 80.7%
| 79.2% | 66.1% |
| Repeat application | 1.3% |
1.2% | 1.5% | 1.8%
| 1.3% | 2.6% |
| Insufficient priority | 5.8% |
6.5% | 6.8% | 7.8%
| 9.7% | 17.3% |
| Other | 2.4% | 0.6%
| 0.6% | 0.5% | 0.5%
| 0.9% |
| | |
| | | |
Source: Secretary of State for Social Security's Annual
Reports on the Social Fund, 1994-1999.
11. It is therefore arguable that the eligibility and
qualification rules for CCGs (Directions 25 and 4 respectively)
provide much stronger filters on applications than section 140(1)
of the Social Security Contributions and Benefits Act 1992 (the
"priority stage" of decision-making) which, in law,
require a truly discretionary decision involving the balancing
of "the nature, extent and urgency of the need" along
with other factors, such as the "existence of resources from
which the need may be met" contained in that subsection.
The comparable figures for CLs provide a more extreme illustration
of this point.[13]
12. Furthermore, the reforms made to BLs introduced by
the Social Security Act 1998 squeezes the discretionary "priority"
stage of decision making in relation to BLs further by omitting
the consideration of "the nature, extent and urgency of the
need" in relation to BL applications. Although there is a
residual discretion which remains, BL payment, like CCGs and CLs,
are heavily reliant upon the application of the eligibility and
qualification rules which behave in much the same way as the more
familiar "conditions of entitlement" to be found in
the mainstream benefits.
Loans
13. It would appear that the public has generally accepted
the loans principle. Loans are interest-free.[14]
13 However, the way in which BLs are calculated under the revised
scheme ensures that those who have any existing debt are frequently
factored out of qualification for this payment. I believe one
important consequence of the revised BL scheme has been increased
pressure on applicants to apply for CLs. It is possible that local
offices under increased pressure are relaxing the rules relating
to this payment in order to mop up such displaced need.
Cash-limits
14. The way in which cash limits for grants and loans
were set nationally, and then translated into local limits by
means of national and local guidance took some years to settle
in. There does not seem much doubt that this has provided an effective
means by which the Government can control budgets. The
fears expressed in the mid-1980s in this respect have been met.
The budgetary arrangements have been refined over the years in
order to provide a more uniform and consistent provision in any
one area and to prevent obvious occurrence of territorial injustice.
However, the point of principle remains. Is it right that certain
needs are dependant upon the state of the budget at any one time?
Community Care
15. Grant provision under the Social Fund was originally
envisaged as part of the wider reforms in "community care"
and the text of Direction 4 still reflects the overall object
to "promote" community care. There has been some minor
widening in the scope of CCGs in the last decade. However, in
my view, the objective of providing a more interactive and responsive
mix of "cash and care" has not been realised. The liaison
envisaged between Social Fund officers and local authority social
services and health services has not occurred. A failure perhaps
in an early attempt at "joined-up policy"? When one
examines the detailed provision offered in Direction 4 it is now
difficult to ascertain any real policy coherence. There would
seem to be a strong case here for at least a review of the policy
underlying CCGs.
Review
16. Part of the explanation for having a review rather
than an appeal system was founded on the discretionary
nature of the scheme. However, if one accepts the argument (above)
that discretion has in reality been largely squeezed out of the
Social Fund scheme it is no longer justifiable on this basis.
Were it not for the intervention of a Special Report by the Council
on Tribunals in 1986 and other pressure the scheme would have
proceeded with an internal review only.[15]
The existence of an external review undertaken by the Social
Fund inspectors at the Independent Review Service (IRS) has upheld
some of the expected process values in social security adjudication.
The model of review is quite unique in administrative law and
the IRS has had some success in establishing a reputation for
independent decision-making and the setting of appropriate "quality"
standards. There have only been 27 applications for judicial review
that have reached a substantive hearing in the High Court/Court
of Session. The Social Fund inspector has an additional power
to review his or her own decision or that of another Social Fund
inspector.[16] Some
would argue that this power has been used to manage the flow of
cases reaching the courts.[17]
The review system is certainly cheaper to administer than the
tribunal system and probably provides a quicker and more accessible
remedy. However, independence is a relative concept and I have
some concerns whether the structural and organisational features
of IRS will stand up to the new legal environment where article
6 standards will receive additional focus.
Directions
17. Some early judicial review[18]
challenges involved an examination of the status and scope of
certain directions and the relationship between directions and
"guidance".[19]
In essence, it is now settled that directions are binding in the
same way as regulations made by statutory instrument and that
guidance must be taken into account. The courts considered that
"directions" were a "constitutional novelty"
but nevertheless upheld the Secretary of State's power to issue
directions that excluded whole areas of need.[20]
The argument for having directions rather than a statutory instrument
is that the Secretary of State has much more flexibility in issuing
new directions or minor revisions of existing directions. Furthermore,
the counterweight to the consequent lack of Parliamentary accountability
is the argument that there are two statutory reporting duties
which provide this: the duty on the Secretary of State to provide
an Annual Report to Parliament and the duty on the Social Fund
Commissioner to provide an Annual Report to the Secretary of State.
[21] However, it may
be questioned whether the presentation of such reports in fact
provides the required level of accountability.
THE FUTURE
OF THE
SOCIAL FUND—OPTIONS
FOR REFORM
Status Quo
18. The discretionary Social Fund reflects some kind
of safety net available for social security claimants (and in
the case of crisis loan applicants there is no prior requirement
to be on any benefit at all). The scheme, or any replacement of
it, will continue to be a significant and sensitive part of the
wider social security system. It is likely that there will be
a continued need for some such scheme to plug some of the gaps
in the more general provision made. However, leaving the scheme
as it is would not, in my view, be a prudent option—precisely
because the policy focus and the shape of the mainstream benefit
system has changed. Furthermore, there is still no convincing
research evidence to confirm one of the basic, original objectives
of the Social Fund scheme, which was to target more effectively
resources to match needs.[22]
There is still a remaining perception that the Social Fund is
a "lottery". It is likely that there will be continued
pressure on the loan scheme to raise the £1,000 limit which
has not been uprated since 1988. It is possible that the new legal
environment will provide new challenges to the review system.
Minor adjustments
19. There are likely to be a number of minor adjustments
to the scheme that could be made without the need for primary
legislation. Much could be achieved by amending existing directions
and/or guidance.
20. For example, the current definition of a "qualifying
benefit" could be extended to include persons on contributory-based
Jobseeker's Allowance thus making such applicants eligible to
be considered for BL and CCG payments.[23]
Similarly, the loans limit of £1,000 could be uprated via
the directions. The existing structure of the revised BL scheme
could be easily enhanced by greater resourcing along with the
consequent resetting of the "maximum amount" specified
in local guidance by the area decision makers. [24]
21. It might be of assistance to the Committee to identify
such possible adjustments as they arise in the course of the evidence
submitted which can be easily achieved by simple amendments to
directions and/or guidance.
Major adjustments
22. There are likely to be a number of major adjustments
that could be achieved by a combination of changes in the primary
legislation and consequent changes in the directions and guidance.
23. For example, one flaw in the review system, in my
view, is that it is difficult to develop a body of authoritative
case law. An inspector's review decision is only binding on the
parties: it does not set any precedent. There are not sufficient
cases reaching the High Court on judicial review challenge to
fulfil this function and arguably this would not be an ideal forum
in this context. Alternatively, an appeal could be made available
to the Social Security Commissioners from an inspector's decision
on an application for leave to the inspector or directly to the
Social Security Commissioner. The Social Security Commissioners
are highly regarded and their decisions are capable of building
up a body of case law in this specialist area. It is unlikely
that the provision of a new appeal right from the Social Fund
inspectors would present any insuperable addition to their existing
caseload.
Fundamental change
24.If the view is taken that the existing structure of the
discretionary Social Fund has served its purpose for its time
but is now in need of a radical re-think there are some useful
starting points that may inform thinking. There have been a number
of research studies and reports on the Social Fund.[25]
For example, the recommendations of the Social Security Advisory
Committee (SSAC) might be worth revisiting. It proposed in 1987[26]
the consideration of five elements:
— an adequate and flexibly operated budget;
— legal entitlement to core grants in a limited
list of cases;
— greater provision for discretionary grants;
— a limited role for loans; and
— a more independent system of appeal rights.
25. However, it acknowledged in its 1992 report[27]
that increasing the budget would not provide a complete solution.
The structure of the scheme should be reviewed. Building upon
its earlier report it suggested the creation of a mandatory grant
linked to defined circumstances. SSAC identified "three major
events" which gave rise to large expenditure and ought to
qualify for a grant:
— moving from institutional care; and
— domestic emergencies—fire, flood or travel
costs associated with illness or death.
It also recommended that consideration be given to the provision
of grants for starting work in certain circumstances and the provision
of a grant towards a bed for a child at 18 months. Apart from
these grants there should only be a residual category of "discretionary
grants" dealing only with "residual circumstances which
cannot be predicted in advance."
26. It is my view that a fundamental reform would require
the establishment of a review team, which should consult widely
before settling upon an entirely different structure.
January 2001
9
Not Printed. Back
10
Bonner D., Buck T. and Sainsbury R., "Researching the Role
and Work of the Social Security and Child Support Commissioners"
[2000] Journal of Social Security Law (forthcoming). Back
11
See Buck, T., The Social Fund: Law and Practice (2nd edition)
Sweet & Maxwell, (2000), pp. 7-20. Hereafter, "Buck (2000)." Back
12
Buck (2000), pp. 21-34. Back
13
Ibid, Table 8 at p. 57. Back
14
There is some recent research evidence indicating some public
support for a social security loans facility. See Whyley C. Collard
S. and Kempson E., Savings and Borrowing: Use of the Social
Fund Budgeting Loan Scheme and Community Credit Unions, Research
Report No. 125, DSS (2000). Back
15
See Buck (2000), at pp. 29-32. Back
16
Section 38(5), Social Security Act 1998. Back
17
See Buck (2000), paras. 4.80-4.85. Back
18
See generally, Buck (2000), chap. 4 ("Judicial Review"). Back
19
See generally, Buck (2000), pp. 122-125. Back
20
See Directions 23 and 29, annotated in Buck (2000), pp. 443-445,
450-453. The exclusions no longer apply to BL payments since the
introduction of the revised BL scheme in April 1999. Back
21
Section 167(5) of the Social Security Administration Act 1992
and s. 37(6) of the Social Security Act 1998 respectively. These
subsections are annotated in Buck (2000), at pp. 312-313 and 294. Back
22
See Buck (2000), chap. 7 for a review of the research on the
Social Fund. Back
23
See Directions 8 (Bls) and 25 (CCGs). Back
24
See Buck (2000), pp. 49-55 for the steps to be taken in calculating
a BL. Back
25
See generally, Buck (2000), chap. 7 ("Research, Reform and
Future Development"). Back
26
SSAC, Report on the Draft Social Fund Manual (June 1987),
HMSO. Back
27
SSAC, The Social Fund: A New Structure (1992), HMSO. Back
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