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The Secretary of State for International Development (Hilary Benn): I regret that in an answer to a question from the hon. Member for Richmond Park during development questions on 29 March 2006, I stated incorrectly that $13.5 million had been given towards the crisis in East Africa from the new United Nations Central Emergency Response Fund (CERF). In fact, $13.5 million was the figure that the CERF secretariat was expecting in initial applications to the fund from UN agencies in the region. On 31 March, $1.7 million of that $13.5 million was approved and disbursed to the World Health Organisation. The remaining applications are in the process of being approved for disbursal to other agencies. Under the current CERF operating rules, there is an in-principle maximum ceiling of $30 million available per crisis.

As hon. Members will appreciate, in a crisis like this, levels of humanitarian funding will be constantly changing as circumstances change.


Discretionary Social Fund

The Minister of State, Northern Ireland Office (Mr. David Hanson): On 3 April I announced that the Northern Ireland discretionary budget for 2006–07 will be £74.69 million; £13.62 million will be allocated to grants; £60.97 million to loans and £0.1 million will be held as a contingency reserve. The new allocations represent an increase of £15.1 million over the initial gross budget set at April 2005. This increase will be funded through higher loan recoveries, plus an increase in net treasury funding of £10.8 million for this year. This £10.8 million is the first instalment of the increases to the discretionary announced in the autumn 2004 pre-budget report to deal with new policy changes to the social fund loans scheme (see below). These measures, which amount to an increase in funding for the social fund of £18.9 million over the three years to 2008–09, will enable the social fund to play a more effective role in helping those families most vulnerable to over-indebtedness.

The community care grant budget has been increased by £0.3 million to £13.62 million. This will provide more help to customers, in particular families with children and the disabled.

The loans budget has been increased to £60.97 million, an increase of £14.8 million on the initial 2005–06 loans budget. To improve the fairness of the scheme, budgets will be allocated in a way that will over time achieve greater consistency of outcome for customers wherever they live.
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Details of the budget allocations; together with a note explaining the basis on which they have been made, have been placed in the Libraries of the House.

Changes to the loans scheme

We have greatly simplified the rules for determining the size of the maximum budgeting loan amount that can be offered to eligible applicants. And there are now only three rates that can be offered:

The complex double debt rule is abolished so that those applicants with existing budgeting loan debt have more help available to them. This, and the simpler rules
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for determining size of the maximum budgeting loan, means that applicants will understand better the help that is available and when they can access it.

We have increased the overall limit on loan amounts that any applicant can borrow from the social fund. At the same time we are reducing the highest loan repayment rates and giving applicants longer to repay their loan debt.

Also from 3 April 2006, budgeting loan applicants will benefit from being able to have more savings before any budgeting loan award is affected. The capital limit is doubled to £1,000 (under pension age) and £2,000 (pension age).

Overall this is a significant package of changes. Also, in making loans more affordable and easier to access, we aim to help people avoid alternative high cost lenders.