House of Commons - Public Accounts

Select Committee on Public Accounts Twelfth Report

1 Raising awareness of the Social Fund

1. Around one-fifth of people in the United Kingdom live in low income households, and a quarter of households have no savings. As a result, many find it hard to pay for important items or cope with emergencies from regular income. The Social Fund provides an important safety net for some of the most vulnerable people in society. It was introduced in 1988 as a flexible way to allow exceptional, one-off or emergency payments to be made without affecting the efficiency of the main Income Support scheme. There are seven types of Social Fund award, which address different needs. The Committee considered five: Budgeting Loans, Crisis Loans, Community Care Grants, Funeral Payments and Sure Start Maternity Grants[1] (Figure 2).Figure 2: Details of the Social Fund awards covered in this Report

Award What is the award for? Who is eligible? How is the award made?

Budgeting Loan To help pay for
furniture, household goods, clothes, travel costs, advance rent, removal costs, items to help find or start work, home improvements, maintenance and security, and some debt repayments.
The applicant must have been receiving Income Support, Jobseekers Allowance (income-based), or Pension Credit, or payments on account of such a benefit, for at least the last 26 weeks. Interest-free loan (generally repaid, where possible, through at-source benefit deductions).

Crisis Loan To help meet expenses in an emergency or disaster, to prevent serious risk to the applicant's (or their family's) health and safety). Most people who require assistance with immediate and short-term needs. The applicant does not have to be receiving any social security benefit or tax credit. Interest-free loan (generally repaid, where possible, through at-source benefit deductions).

Community Care Grant To help applicant move out of institutional or residential care or prevent them going into care; to help families under exceptional pressures; to help care for a prisoner on temporary release; to help people with an unsettled way of life set up home; to help with certain travel costs. The applicant must receive Income Support, Jobseekers Allowance (income-based), or Pension Credit, or payments on account of such a benefit, or be likely to be receiving one of them within 6 weeks of leaving care. Grant.

Funeral Payment To help pay for a modest funeral or cremation. The claimant (or their partner) must receive Income Support, Jobseekers Allowance (income-based), Pension Credit, Housing Benefit, Council Tax Benefit, Working Tax Credit with a disability element or Child Tax Credit (higher rate). Grant (unless can be repaid from deceased's estate).

Sure Start Maternity Grant To help buy things for a new or expected baby. The claimant (or their partner) must receive Income Support, Jobseekers Allowance (income-based), Pension Credit, Working Tax Credit with a disability element or Child Tax Credit (higher rate). Grant.

Source: National Audit Office

2. To be eligible for all but Crisis Loans, applicants must be on certain benefits or tax credits. All loans are interest-free and are generally re-paid by reducing benefit payments.[2] In 2003-04, almost 3 million payments were made, amounting to £854 million of gross expenditure. More than half of this was in Budgeting Loans. Around 93% of gross loans expenditure of £569 million was funded by loan recoveries of £530 million.[3] Figure 1 summarises the expenditure for each award in 2003-04.

3. Although it has existed for 17 years, awareness of the Fund is low. According to the National Audit Office's survey only half of people on low incomes were aware that jobcentres and benefit offices paid grants and loans for emergency or important items.[4] Different groups of people use the various awards to differing degrees, with pensioners, for example, less likely than others to use the Fund. The Department said that some awards were better known among their specific target groups, for example, Sure Start Maternity Grants among pregnant women, but accepted that awareness of Crisis Loans amongst those potentially eligible (a wider group) was lower. However, given the limitations on the budget, the Department considered it had to be careful not to raise expectations.[5]

4. The Department is nevertheless taking steps to raise awareness among target groups, especially through leaflets for benefit claimants. The Department proposes to rationalise and improve leaflets in 2005-06 by introducing new client group products and new benefit specific information sheets, including on the Social Fund. In the Department's view one of the difficulties in publicising the scheme effectively is its complexity and a lack of transparency in some of the eligibility rules. The discretionary nature of some awards and the complex decision-making procedures make it hard for the Department to explain simply the circumstances in which applicants are likely to be successful. Consequently, it is hard for some customers to identify when they might qualify for help or what might be the most appropriate award for them.[6] Evidence that the Fund is seen as complex by customers and their advisers is of concern since it was originally introduced because Supplementary Benefit was itself considered too complex and rigid.

5. The National Audit Office reported that some customer groups used the Fund less than others. Jobcentre Plus is working with the Pension Service to ensure that the latter's contact centre staff are more aware of the Fund,[7] but the Department also recognised that many pensioners did not want to take out loans. To improve awareness amongst pensioners, the Department is distributing new leaflets to Pension Service local service staff to use in their work with partner organisations. It has also developed a Social Fund awareness programme, which is being piloted in Wales. Subject to satisfactory evaluation, the programme will be rolled out across the country in 2005-06.[8]

6. There was evidence of a low level of awareness of the Social Fund among Jobcentre front-line staff, particularly among those who joined from the former Employment Service. Personal Advisers did not as a matter of course tell customers about the Fund, and lack of knowledge also meant some did not always advise customers appropriately, for example, suggesting applications for loans when grants might be more suitable. There was also evidence of some staff advising customers not to apply as they would not succeed, despite promises made to the Social Security Select Committee in 2001 about improving aspects of customer service.[9] The Department acknowledged the need to improve.[10] In early 2004, 'mystery shopping' was carried out to test customers' experience of accessing the Fund, and this was being repeated. Errors and failures would be highlighted in guidance to staff.[11]

7. Some aspects of the handling of the Fund suggest it is not accorded high priority by Jobcentre Plus. Although localised training exists, the Department does not provide training centrally for Social Fund staff (including decision-makers). In addition, training material is out of date and optional for use by districts. In the absence of central training, the Independent Review Service (the body which carries out independent reviews for dissatisfied customers of the Social Fund), provides self-instruction computer packages and workshops for staff on request.[12] In 2003-04, the Service delivered 522 workshops, of which 136 were for Jobcentre Plus staff (including 71 awareness sessions for frontline advisers). Others were provided for interest groups and advisor organisations.[13] Training had increased since the merger of the Employment Service and Benefits Agency to create Jobcentre Plus, but provision for the Social Fund had to compete with other demands.[14]

8. To concentrate attention on improving performance of the Fund, the Department had introduced new key management indicators to monitor all parts of the programme.[15] Currently, however, quality checking is limited at a national level, and the results are not sufficiently detailed at a regional or district level, so there can be only limited local feedback to decision-makers on the quality of decision-making. The Department is redefining its internal checking criteria to concentrate more on the quality of decision-making, rather than process.[16]

1 C&AG's Report, Helping those in financial hardship : the running of the Social Fund (HC 179, Session 2004-05), paras 1.1-1.3, Figure 5. The other awards - Winter Fuel Payments and Cold Weather Payments - are paid automatically, and so were excluded from the C&AG's work. Back

2 C&AG's Report, Figure 2 Back

3 ibid, para 1.4 Back

4 ibid, paras 2.16-2.17; Q3 Back

5 C&AG's Report, para 2.4; Qq 3, 89-90 Back

6 Qq 3-4; 53 Back

7 C&AG's Report, para 2.4; Qq 3, 48-51 Back

8 Qq 4, 48-53 Back

9 C&AG's Report, paras 2.18-2.20; Qq 11, 20, 27, 60-61; 3^rd Report from the Social Security Committee, The Social Fund (HC 232, Session 2000-01) Back