§ 10. Mr. PikeTo ask the Secretary of State for Social Security what is the latest assessment in percentage terms of the cost of administration of the social fund. [39693]
§ Mr. Roger EvansThe cost of operating the social fund in 1993–94 was 41 per cent. of the amount of money paid out and recovered. Since the start of the scheme we have paid loans to the value of £1.5 billion for an outlay of just over one fifth of that amount—£329 million.
§ Mr. PikeWould it not be common sense to reduce administration costs from that appalling level of 41 per 588 cent. and give grants to the people most in need, as those on income support who qualify for assistance from the social fund are the most desperately poor people in this country?
§ Mr. EvansOn a number of occasions, the hon. Gentleman has raised the argument—I understand why he does so—for a system of grants more similar to the old system that the social fund replaced. The difficulty with the old system was that the cost doubled every two years between 1980 and 1986 and that it proved to be inequitable, as 80 per cent. of expenditure was going to 17 per cent. of eligible claimants. The social fund is a real improvement in terms of giving more help by way of loans to more people. The multiplier effect, if I may describe it as such, is about fivefold. It does not follow that the administration costs of a grant scheme, if it is to be administered firmly, need be any less.
§ Mr. BradleyDoes the Minister not realise that, with half the costs of the social fund being swallowed up in administration, it is the poorest who are not receiving any help at all? Did he read the Family Welfare Association report, which was reported in The Guardian last week and which said that 116,000 items of urgent need were turned down last year because people were unable to repay as their benefits were low? Many more people did not even bother to claim because they knew that they could not afford to repay as their benefits were low. Will he urgently review that position to ensure that the poorest in our society are not further punished because of the social fund's administration costs?
§ Mr. EvansThe figure of half which the hon. Gentleman put to me is wrong; I have given the correct figure. Yes, of course we read and studied the report to which he alluded, but he gave a misleading impression. Only a small proportion of applicants are refused social fund loans on the ground of inability to pay. About half a per cent. of loan decisions were refusals on that ground—that is fewer people. Most of those who were refused on such a ground were already paying back one or more loans from the fund. There must be a reasonable limit to the amount advanced.