Conclusions and Recommendations
1. The Community Care Grant is an important
source of emergency financial support for vulnerable people, but
we have significant concerns about the fairness and efficiency
of the scheme's administration.
The scheme awards £141 million in grants per year, but funding
has been frozen since 2006-07 and is likely to remain frozen for
the rest of the current Spending Review period. Tight funding
makes it even more imperative that the scheme is fair and reaches
as many of the people in the greatest need as possible. There
are clear problems with the way the scheme is currently managed,
however, which result in an unfair allocation of funds, poor controls
over money awarded, and high management costs. Subsequent to our
hearing the Government's White Paper on welfare reform announced
plans to devolve the administration of the scheme to local authorities.
The proposed reforms provide an opportunity to address many of
our concerns, but we recommend that the Department quantifies
the costs and benefits of transferring responsibility to local
authorities so that it can be confident it leads to better value
for money. We also need assurances that in the current financial
climate local authorities will be properly resourced to do the
job. We would expect an update from the Department on how any
revised arrangements will replace the current system and over
what timeframe. In the meantime, the onus is on the Department
and Jobcentre Plus to make real and urgent efforts to tackle the
serious problems with the existing scheme arrangements. The recommendations
below outline how this should be done.
2. The distribution of funds between regions
is unfair and means that the chances of getting a grant depend
in part on where the applicant lives.
Budgets are set on a historic basis and do not reflect current
need in each region. This means some regions are less able than
others to meet legitimate demand for grants. In 2009-10, the Springburn
district office was able to meet 37.1% of legitimate demand whereas
Essex was only able to meet 26.3% of demand. This Committee raised
similar concerns about regional inequalities in 2005, but the
Department has not managed to persuade Ministers to change the
system for deciding funding allocations. We remain extremely dissatisfied
with the existing approach. We recommend the Department present
clear and well-evidenced proposals to Ministers to reform the
funding distribution formula so that budgets are allocated more
fairly across the country.
3. The Agency does not forecast demand for
the Grant and there is only minor adjustment of regional budgets
in year to redistribute funds to high priority cases.
The Department concedes more could be done to even out regional
funding inequalities by moving money around the country. The Agency
should immediately start to prepare forecasts of future demand
for the Grant in each region, update these regularly, and use
these forecasts to recommend changes to the budget allocations
in year so that regions can meet expected need on a more equitable
basis.
4. Awareness of the scheme is low among key
target groups such as pensioners and ethnic minorities, and the
Department does not know whether grants are going to those most
in need. The Agency does not routinely
monitor levels of awareness of the scheme among vulnerable people
to determine if money is being targeted effectively. A trial in
Gateshead found that only 14% of pensioners were aware of the
Grant, while the take-up rate among pensioners (9% of funds awarded)
is lower than for other groups. This scheme exists to ensure that
vulnerable people can remain in the community, so pensioners should
be a target group. The Agency should regularly monitor awareness
and take-up levels across the population and work to raise awareness
amongst under-represented groups.
5. Applicants rejected for grants are not
consistently referred to other available sources of support.
The Agency could not tell us whether people failing to get a grant
are made aware of other sources of financial help to which they
may be entitled, such as Budgeting Loans. The Agency's procedures
should be modified so that vulnerable people are routinely referred
to alternative sources of support if they are deemed ineligible
for a Community Care Grant.
6. The Agency has failed to institute basic
measures, such as physical spot checks on claims, to prevent customer
fraud. Without any spot checks, the Agency
does not know whether the money it awards is used by those with
the greatest need to buy the items intended. Grant recipients
are not required to provide receipts for goods purchased. The
Agency has now introduced a pilot exercise of home visits to claimants
before awards are made to check on their eligibility and will
change the application form to ask them to keep receipts. We welcome
these initial steps, but proper action is needed to correct current
weaknesses. We believe there is a strong case for introducing
a nationwide programme of spot checks as soon as possible, and
recommend the Agency decide and report to us by the end of the
year whether it intends to implement such checks nationally.
7. The effectiveness of the scheme is reduced
by high levels of administrative error and poor quality decision
making. The Department's Social Fund accounts
have been repeatedly qualified because of high error levels, and
£17.1 million of this is attributable to the Community Care
Grant arising from missing case files and incomplete documentation.
In addition, the Agency's administrative 'Decision Makers' frequently
fail to assess and challenge applications properly, such as by
verifying information by telephone or in person. As a result,
around 50% of appeals against decisions succeed. The Agency has
proposed better training, quality assurance and record keeping
measures. However, given the proposals to transfer responsibility
to local authorities we need assurances that the training and
quality measures will not now be cut. Moreover, the problems we
highlight are long-standing ones and we need further assurances
on the adequacy of the changes being made. The Agency's senior
management must take greater responsibility for reducing error
and improving decision making, and as part of this, outline to
us the full range of measures they propose to improve performance
in this area.
8. The £19 million cost of administering
the Grant is too high. Administration
costs are equivalent to 13% of the £141 million paid out
in grants. This seems disproportionately high for what the Department
claims is a light touch administration scheme. The Agency has
undertaken to review the end to end process for administering
grants in January 2011 to identify where costs could be reduced.
We expect the Agency to report back to us on the outcome of that
review, and how it will implement potential cost savings, before
the start of the 2011-12 financial year.
9. The Agency has not fully explored options
which could make Grant funds go further such as providing goods
to customers directly or replacing cash awards with cards.
Introducing store cards or central contracts to supply frequently
requested items, such as beds and refrigerators, could reduce
fraud and generate significant financial savings: an estimated
£14 million a year could be saved by negotiating contracts
for goods centrally and thus gaining bulk discounts from suppliers.
The Agency has said it will work with the Family Fund to learn
from their use of payment cards. The Agency should investigate
other promising initiatives and their potential for cost savings.
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