Conclusions and recommendations
1. The complex nature of the Social Fund increases
the risk that those most in need of support may not benefit. The
Fund was introduced to provide a flexible and quick way of making
one-off or emergency payments to help the most vulnerable in society.
The complex decision making procedures that have since evolved
have undermined the original objective of the Fund. The Department
needs to reassert the original vision, and design out complex
eligibility criteria or processes which discourage vulnerable
people from seeking assistance and delay decisions on eligibility.
2. Only around 50% of potential users are
aware of the Social Fund. The Department
is cautious in advertising Social Fund awards too strongly because
of the risk that it will raise expectations which cannot be met.
Under half of those potentially eligible have heard that loans
and grants are available, and there is no evidence that those
who do know about it are those most in need. Staff should draw
attention routinely to the existence of the Fund when dealing
with new benefit claimants from groups which have tended to make
less use of it (eg pensioners and ethnic minorities) to increase
the chances that those most in need are aware of it.
3. Some customers may be receiving inappropriate
advice from the Department because many staff, especially those
who joined from the former Employment Service, are not aware of
it. The Department should improve Social
Fund training given to staff in order to raise awareness, or appoint
a Social Fund 'expert' in each jobcentre office who can be consulted.
4. Over 50% of Budgeting Loan applications
refused in 2003-04 were from those with too much existing Social
Fund debt. Many customers do not know
how much Social Fund debt they have and are often unable to assess
their remaining credit limit. The Department should make it easier
for customers to find out their debt position before applying
for a further loan, for example by enabling customers to check
their balances via on-line access to information in jobcentres.
5. There are errors in nearly 50% of Crisis
Loans and Funeral Payment decisions. The
quality of decision-making varies by award and district. Although
some of the decision-making errors do not affect the amount paid
out, getting decisions right first time is important for efficient
administration and good quality of service. The Department should
focus on better evidence gathering at the outset, where possible
through telephone contact, so as to reduce the proportion of decisions
overturned where new evidence arises.
6. The processing of customers' applications
is affected by the limitations in the Social Fund computer system.
All districts handle some cases off-system because of lack of
space, whilst some staff do not have full access to all benefit
records to allow efficient evidence gathering. As a result, they
have to request information, adding to the time taken to process
applications. The Department advised us that upgrading the capacity
of the system has slipped from April to September 2006 but once
implemented the increased capacity should improve the efficiency
of processing.
7. Crisis Loans are usually for people in
emergencies, but performance against clearance time targets for
Crisis Loans is poor in some districts, with an average of 3.5
days in the poorest performing districts.
The target has been increased from 1 to 2 days and we expect all
Crisis Loan applications to be dealt with within this new target
time through, for example, effective evidence gathering by phone
and more careful completion of applications in Jobcentres.
8. Very large local variations in decision
making practices and costs raise doubts about fairness and effectiveness
across the country. Some of the variation
appears to be inconsistency in decision-making which should be
reduced by better training, whilst variations in costs will be
addressed by greater standardisation in practices. The Department
was uncertain whether the new standard operating model would be
rolled out further. Assuming the pilots are successful, the Department
should implement standardised practices quickly to reduce variations
and increase efficiency.
9. The Department is unable to find a significant
proportion of customer files easily. The
Department has experienced problems with the storage and retrieval
of case papers, sufficient for the Comptroller and Auditor General
to qualify the 2003-04 accounts of the Social Fund. The Department
should use the new storage contract to secure improved file retrieval
through computer logging of files so that this particular aspect
of the qualification is removed for the 2004-05 accounts.
10. The proportion of debt less than a year
old has fallen from 75% to 59% over the last five years and there
is a risk it will become harder to collect.
The Department should give greater attention to recovering outstanding
debt from all customers as soon as they return to benefits by
making better use of its new MIDAS software; giving Social Fund
staff access to all benefit computer systems to arrange repayments
through benefit deductions; pursuing with HM Revenue and Customs
the possibility of recovering Social Fund debt from tax credits;
and pursuing debt owed by customers whose benefit payments are
insufficient to cover agreed repayments.
11. Social Fund debt amongst those not on
benefit increased from £90 million in 1999 to £181 million
in 2004. Debt cannot be recovered automatically
from these people and around half of Social Fund districts said
they did not have the resources to pursue this debt. With the
centralisation of responsibility for recovering off-benefit debt,
the Department should aim to reverse this increase and halve the
amount outstanding.
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