Social Fund (Hansard, 8 June 1992)

§ 5. Mr. Cox
To ask the Secretary of State for Social Security what plans he has to review the present working of the social fund; and if he will make a statement.

§ 6. Mrs. Ewing
To ask the Secretary of State for Social Security what was the total amount made available by his Department in the current financial year for (a) social fund loan payments and (b) community care grants; and if he will make a statement.

§ 7. Mr. Tom Clarke
To ask the Secretary of State for Social Security when he next expects to meet the Child Poverty Action Group to discuss the social fund.

§ Mr. Scott
In 1989, we commissioned a major study from the university of York's social policy research unit into the social fund. When considering its report, which will be published shortly, we shall also take into account the recent report of the Social Security Advisory Committee and the views of other bodies, including the Child Poverty Action Group, which is due to meet the Under-Secretary of State for Social Security, my hon. Friend the Member for Bury, North (Mr. Burt) on 7 July. We all welcome him to the Dispatch Box today.
We routinely monitor the fund. We have made a number of improvements and have injected significant additional resources. This year, we have substantially increased the discretionary budget. We have provided £211 million for loans and £91 million for community care grants. The total discretionary budget of £302 million is almost £75 million higher than the April 1991 figure.

§ Mr. Cox
I thank the Minister for that reply. However, is he aware of the comments that have already been made by the Campaign for the Homeless and Roofless—CHAR—to which many hon. Members belong? It has said that the present funding and the way in which the scheme works are totally inadequate for people coming out of institutional care or bed-and-breakfast accommodation and trying to build a new life in suitable accommodation. The fund as it now works does not meet their needs. Will the Minister assure the House that those views will be taken into account?

§ Mr. Scott
Indeed, there is little doubt that they will be taken into account, as I was a founder member of the parliamentary panel for CHAR and last week attended an important seminar close to the House, where the campaign's views were expressed vehemently. Of course I shall take its views into account, but the more dispassionate views of the social policy research unit will also play a part in our thinking.

§ Mrs. Ewing
In announcing the increase in the discretionary element of that budget, what estimate has the Minister made of the reduction in the number of people who are refused a loan? For example, last year 19,000 people were refused a loan because they were too poor to repay the debt. If we want to target money to the poorest sections of society, we should ensure that those who are most in need are guaranteed some form of assistance. In addition to the reports that the Minister has already mentioned, will he take account of the effective reports by the Convention of Scottish Local Authorites?

§ Mr. Scott
Of course I shall take account of that. The number of people who are refused because of inability to pay is a mere fraction of the overall number refused. The majority are refused because they do not meet the basic criteria for the fund.

§ Mr. Tom Clarke
Will the Minister encourage his hon. Friend to take the Secretary of State with him when he meets the Child Poverty Action Group? When he meets it, he will hear that the number of rejections for loans has doubled since 1988 and that the number of rejected community care applications—which are important—now exceeds 70 per cent. Precisely how do the Government intend to respond to the various reports, including that of their advisory committee? In particular, how can the Government justify any social security system that excludes the right of appeal?

§ Mr. Scott
First, there is a review system within the scheme, which is a speedier and more effective way of handling first-level requests for reconsidering cases. In the longer run, there is the social fund inspectorate. The Social Security Advisory Committee paid tribute to the independence of the social fund inspectorate in its consideration of appeals. We have responded to the increased demands on the social fund by providing the extra resources that I announced earlier. The hon. Gentleman will know that the fund for his local office was increased by nearly 16 per cent. for the current year, so we are responding to pressures on the fund. However, in response to a variety of reports that either have been or will be produced, we shall look again at its future.

§ Mr. Bowden
Is my right hon. Friend aware that there is an element of lottery and luck in whether an application is accepted? If there are pressures on the local social security budget, it depends at what time of year an application is made, and that can vary from one area to another. Will he look at that problem and ensure that it is levelled out between social security areas?

§ Mr. Scott
In any scheme that depends on discretion there are bound to be differences between offices about apparently similar cases. They may not always be exactly the same. Obviously we are anxious to ensure that pressures on local budgets are dealt with, sometimes within the year, but, more generally, as we deal with the balance between demand and need in our year-on-year allocations.

§ Mr. Pickles
Given the sort of claims made on the social fund, it is extremely important that decisions are made quickly. Will my right hon. Friend give an undertaking that the present arrangements whereby most decisions are made within a few days will continue? Will he ensure that 8 the position is monitored and that decisions are normally made within a few days, particularly those related to reviews?

§ Mr. Scott
We are conscious that the social fund meets exceptional needs and circumstances outwith the normal provisions of the social security system. Therefore, we want speedy decisions—those on crisis loans are normally made within 24 hours.

§ Mr. Kirkwood
Does the Minister accept that the York university study provides a valuable opportunity to have a fundamental review of how the social fund works? From what he said earlier, am I to understand that that report will be produced before the summer recess and that the Government will give their response to it within that time? Will he consider the recent work done by the Policy Studies Institute that clearly shows that when the social fund was orginally introduced in 1985–86, about 2 million families were dependent on long-term benefits over a substantial period, whereas the most recent figures for 1988 show 4.5 million families in that position?

§ Mr. Scott
As the hon. Gentleman says, there have been and will be a number of reports and representations on the future of the social fund and the Government want to consider all those once they have been produced. Yes, I would expect the York university report to be available before the summer recess.

§ Mr. Bradley
Will the Minister be more positive today? I am sure that he is aware that the vast numbers of applications to the social fund are from young and homeless people seeking to set up their first homes and are for household items. Many of those people cannot afford to repay the cost of such items from the meagre income support that the Government give them. Does he support the recommendation of the Social Security Advisory Committee to change the scheme to ensure that non-repayable start-up grants are given to such people? They could then buy essential items such as beds and cookers and would not have to stay in inadequate accommodation. They could set up their first home without the burden of debt that they would incur if they had to use their benefit to buy such items.

§ Mr. Scott
At the risk of repeating myself, we want to look at all the reports and the various recommendations that they contain. In 44,000 cases people who applied for loans were given community care grants instead.