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Social Fund

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): I am pleased to announce that the gross discretionary social fund budget for 2006–07 will be £842 million.

This includes an increase in net treasury funding of £120 million. The increase is the first of three annual increases which in total comprise a substantial £210 million boost to support changes to the discretionary loans scheme announced in pre-Budget reports of 2004 and 2005.

With the investment of the extra net funding of £120 million, I have been able to allocate a gross national loans budget of £700 million from 1 April 2006.

I have also decided to increase the national community care grant budget by £3 million to £141 million. This is the seventh consecutive annual increase and means that the national community care grant budget is now almost 44 per cent. higher than in 1999–2000. £1 million will be retained centrally as a contingency reserve. For example to provide additional help to districts facing unexpected and unplanned expenditure.

Details of individual district budget allocations will be placed in the Library.

The discretionary social fund budget is cash limited. Budgets are allocated to districts on 1 April each year.

The gross discretionary SF budget allocated for 2006–07 is £842 million made up of:

If the forecast for loan recoveries proves to be an underestimate, any additional recoveries can be allocated to districts during the year.

The contingency reserve is held centrally and allocations made from it reimburse districts for expenditure resulting from a local accident or disaster— for example, floods.