Select Committee on Social Security Appendices to the Minutes of Evidence


Memorandum submitted by the London Advice Services Alliance (Lasa) (SF 30)

  London Advice Services Alliance (Lasa) provides training to a wide range of workers who advise on, and help applicants with, the Social Fund.


General issues

  1.  The overall budget is inadequate.

    —  Recent dramatic increases to selected, ie Maternity and Winter Fuel, payments should be applied across the board.

    —  It is impossible for people to afford relevant large items out of their weekly means-tested benefits. Most of these are now considered basics in our society.

    —  Disproportionate amounts are spent on the administration.

  2.  Loans force poor people into greater poverty.

  3.  Discretion is iniquitous, obscure and unworkable. It is impossible for people to understand what is needed to qualify. The interaction of low budgets and discretion mean that discretion only operates within a very rigid band.

Specific payments

  1.   Funeral payment amounts should be increased and the rules on "religious" costs eased. By definition they are claimed by the very poorest in our society where neither the deceased nor bereaved have adequate savings. There is nothing inherent in funerals to make this a benefit issue: it is time for some "joined up thinking" across relevant departments to help people on low incomes.

  2.   Budgeting Loan amounts are much too low.

  3.   Community Care Grant criteria are too obscure and the procedure demeaning. Most people are refused as they do not realise the extreme circumstances they must write in the application form.

  4.   Crisis Loans suffer from all the above, but also from prospective applicants being barred from applying.


  London Advice Services Alliance (Lasa) is a development and resource voluntary organisation, which provides information, training and support to advice giving agencies primarily across London.

Trainees include social, health, resettlement, advice and housing workers and those working with homeless people, disabled people, pensioners and families. This submission is based on issues and cases raised during training sessions and on enquiries which come to our advisers' advice line. We outline some general concerns as well as problems with specific payments.

General issues

  What is most striking perhaps is that 12 years after its introduction the Social Fund is still iniquitous, problematic and clouded in obscurity.

1.   Inadequate budget

  i.  The overall budget for the Social Fund is inadequate and is arguably the root cause for most of its problems. Recently we have seen this budget used as a political issue, with the fanfare of publicity for a dramatic increase in funding—but in selected areas only, notably winter fuel payments and maternity payments. The poorest pensioners and families might equally like to see a similar 300% increase for funeral payments and Community Care Grants.

  ii.  To qualify for most Social Fund payments you must be in receipt of a means tested benefit whose levels are arguably based on subsistence level budgets. On the whole it is intended therefore for the poorest in the country. When introduced the Social Fund hinged on the premise that people on means-tested benefits should and could put money aside for future large items of expenditure such as washing machines, fridges, beds and even it seems funerals. This is just not possible on current levels of benefit. Above all, this is not a problem with budgeting, but a problem of poverty.

  iii.  The Poverty and Social Exclusion Survey of Britain 1999 identified a range of items that the majority of people in the UK consider as necessities. By emphasising "social relations and social participation, the survey differs from most analysis'" The data shows that 95% consider adequate beds and bedding for everyone in the house to be essential; 89% a refrigerator; 85% the ability to replace or repair broken electrical goods; 82% decent home decoration; and 76% a washing machine[30]. In line with the Government's objectives to combat social exclusion, they must take on board that items covered by the Social Fund are a necessity, not an optional luxury. It is time that these essential items were either allowed for by increasing weekly rates of means-tested benefits, or by making access to Social Fund payments easier and the amounts more generous.

  iv.  From a different angle the disproportionate amounts spent on administering the discretionary arm of the Social Fund—relative to the amount spent on actual payments to people—is a waste of public finances. At one stage this was roughly 50:50. A more transparent and less discretionary system would be a better use of tax-payers' money.

2.   Loans

  The emphasis on loans in the discretionary Social Fund is still not acceptable. Repaying loans forces people to live on less than their subsistence level, applicable amounts for long periods of time. This in turn forces people into other forms of debt to cover their basic living needs. Indeed many are initially refused as they are too poor to make the repayments—usually because of existing deductions from their weekly benefit.

3.   Discretion

  i.  For Community Care Grant and the Crisis Loan applications Social Fund Officers must follow the Social Fund Directions, which although legally binding are quite vague. The subsidiary Guidance is not legally binding, which it even restates itself. Nonetheless, Social Fund officers follow it as if it was law. Similarly local guidance is often treated as gospel. So, the notion of discretion and treating each applicant as an individual is undermined by the creation of rigid rules by the decision makers. At the same time how these notional rules are applied varies from one area to another.

  ii.  There is no transparency in the discretionary system. It seems virtually impossible for unassisted applicants to know how to qualify, or what to write in their application, especially for Community Care Grants. From our experience most need a skilled adviser to help complete what should be a simple form. For instance, to satisfy Direction 4(a)(ii) for a Community Care Grant to "remain in the community" applicants need to say that without it they are likely to go into an institution such as hospital, or residential care, or indeed that their children will go into care, if they do not get a bed. This may well be the eventual consequence. But it is much too drastic and frightening for most people to say about themselves or their children. The majority of Community Care Grant refusals stem from this difficulty in completing the form and demonstrating that you qualify, in such dramatic terms. As, for instance, beds and cookers are considered basic necessities, most people will simply say they don't have and need this item.

  iii.  It should not be necessary for people to degrade themselves to the extent currently necessary for Community Care Grants. We welcome the recent change to Budgeting Loans whereby applicants no longer need to explain in turgid details how their need developed nor how deserving they are.

  iv.  The interaction of the low budgets and discretion means that in practice only cases considered as "high priority" ever have a chance of getting a payment. So "discretion" if any is limited to a very rigid range. To put this in context, a person moving out of hospital and setting up home may get a payment for essential furniture and household equipment, but a pensioner needing extra or replacement warm bedding is likely to be refused. So this makes a nonsense of the other ranges of priority. Why not either publicise a national list of the people, extreme circumstances and items which are likely to qualify, or increase the funding so that other non-emergency needs can also be met.


1.   Funeral payments

  i.  The amount available from the Social Fund has decreased. But restricting the amount available through Social Fund funeral payments has had no impact on the market price of funerals. Instead the cost of funerals has increased. Bereaved families and friends are placed in an invidious position. Unfortunately at time of a death, the bereaved are unlikely to be able to engage in negotiating the cheapest cut price deals with undertakers and likely to just agree to a standard funeral that they recommend. Obviously at such a time people are oblivious to the existence, let alone rules, of funeral payment limits. Commonly these are only realised after everything is arranged and the undertaker's bill arrives.

  ii.  By definition funeral payments are intended for the very poorest in society, as neither the deceased nor the bereaved have adequate savings or assets. There is no justification for not funding the standard cost at least. Many bereaved people get into serious debt as a result.

  iii.  The Social Fund definition of "religious costs" is applied too tightly. Many people in London want to have their remains in a certain cemetery—eg Greek Cypriot, for social and cultural regions. This should not be treated as a religious cost. Unfortunately these are usually more expensive than the local authority burial grounds.

  iv.  It is time that the Government used its notion of "joined-up" thinking and working, and took the initiative to solve the problems of funeral costs for people on low income. There is nothing inherent to funerals to make it solely a benefit issue. The Departments of Health, Environment and Social Security should collaborate. Potential policies could include:

    —  regulating the price of funerals, regionally; or

    —  introducing a modestly priced, affordable funeral service, perhaps directly or indirectly run by health or local authorities—but which is more acceptable than the "pauper's funeral".

2.   Budgeting Loans

  i.  The new weighting system for assessing applications seems better than the total arbitrary discretion that it replaced, in that at least applicants and advisers can now gauge the likelihood and amount of payment when applying. It is also welcome that claimants are no longer forced to write galling, degrading accounts of how desperate they are. It is also welcome that Community Care Grants are no longer routinely treated as applications for loans instead.

  ii.  However the low amounts allowed for payments remains a problem. For instance in the Leaside District office in London the maximum amount for a single person on benefit for 6 months is currently £210; or if on benefit for 3 years £315. Regardless of whether an applicant needs a cooker, or to furnish an empty flat, that is their limit.

  iii.  A lone parent with one child is limited to a maximum amount of £349.86 they have been on benefit for 6 months; or £525 if they have been on benefit for 3 years—again regardless of whether they need children's clothing or furniture.

  iv.  Moreover these limits are usually revised downwards over the year depending on the demand on the district's budgets.

3.   Community Care Grants

  i.  As stated earlier, the criteria are too obscure and harsh for individuals to negotiate unassisted. The form itself aggravates this. It should not be essential to have an adviser. This in turn causes another waste of public funds—albeit coming out of local or health authorities' purses—by creating extra work for their staff.

  ii.  As it works, you do not qualify on the merit of your needs, but on your ability to say degrading and humiliating things about yourself. People with quite genuine and eligible needs are commonly refused, as they do not know the key phrases to use in their forms.

  iii.  From a holistic point of view people living in poverty with children or in poor health will in the long-term suffer deterioration in their health from the lack of adequate clothing, bedding or household equipment. The cost of their increased morbidity falls on those on low income and on the health service.

  iv.  Whilst legally all parts of Direction 4 have equal legal merit, most advisers find that applications made on the grounds of "families under pressure" rarely succeed.

  v.  Furthermore, the high success rates at the review stage is a reflection of a poor standard of decision making at the frontline.

4.   Crisis Loans

  A major problem facing potential applicants is that Benefit Agency receptionists tell them they do not qualify, Obviously if you don't apply you do not get any decision, therefore you have no valid refusal to challenge. Another common line is to tell people that they must apply at a different office. Given that by virtue of it being a Crisis Loan, people are likely to be stranded and penniless. Despite innumerable DSS promises that this practice would end, it persists. It seems that all staff members use their discretion to take the power of discretion to its ultimate meaning within the Benefit Agency.


  It seems that the Social Fund 12 years on is still as unworkable and unfair as ever. Beyond that the budgets are much too low. Grant giving charities are feeling some of this strain, but people on low income feel it most. There needs to be greater state responsibility to assist low income people to afford funerals and large items of expenditure, especially those considered basic essentials by society. It is not possible to budget for these out of means-tested benefits, especially income support or income based Jobseeker's Allowance.

Berni Graham

January 2001

30   Gordan D, Adelman L, Ashworth K, Bradshaw J, Levitas R, Middleton S, Pantanziz C, Patsios D, Payne S, Townsend P, & Williams J: "Poverty and Social Exclusion in Britain"; 2000; Joseph Rowntree Foundation. Back

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