HL Deb 28 March 1991 vol 527 cc1215-6

2.42 p.m.

Lord Stallard asked Her Majesty's Government:

Whether, in their view, the Social Fund is providing value for money when £61 million was spent administering benefit expenditure of £198 million in 1988–89.

The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley)

My Lords, yes, although we are always seeking ways of providing greater value for money. However, I must add that it is misleading to make direct comparisons between the administrative costs of specific benefits without considering the individual nature of each benefit.

Lord Stallard

My Lords, I thank the noble Lord for that Answer, although I doubt whether it is factually correct. Is he aware that the Social Fund is the most expensive benefit administered by the DSS? It is estimated that in 1988–89 the cost of administering the Social Fund was £61 million—about one-third of the total expenditure—yet at the same time, according to the report of the National Audit Office, the people who needed the benefit most were not getting it, as the fund was £40 million under-spent in that same year. Is the noble Lord further aware that there is a growing indebtedness to the fund by people who have been unable to repay their loans? How much is that costing at present? How much is owed and what will be the cost of recovery?

Lord Henley

My Lords, I accept the figure given by the noble Lord that in 1988–89 administration cost some 31 per cent. of the fund. In 1989-90, the last year for which I have records, the figure was some 32 per cent. However, its predecessor, the single payments scheme, cost a similar percentage to administer. The noble Lord must remember that any discretionary scheme is bound to be more expensive to administer than other benefits. It is important to remember that the fund deals with a wide variety of people in many different circumstances and with very diverse needs. The fund therefore has to be staffed at a level which enables it to respond quickly and flexibly to the wide variety of demands that may be made upon it.

Lord Carter

My Lords, can the Minister explain why a scheme which costs 31p in every pound of benefit to administer can reject nearly 800,000 applications from the poorest people in society? On many occasions the reason for rejection is that the applicants are too poor. Is it a question of targeting and more target practice?

Lord Henley

My Lords, there are occasions when loans are rejected on the grounds that the applicants will find it difficult to repay the loan. But that happens only on rare occasions.

Lord Carter

My Lords, 23,000 applications represents a substantial number of very poor people who cannot get help from the fund.

Lord Henley

My Lords, as I said, it is a discretionary scheme. It would not be right if someone who could not afford to repay the loan could then embark on further debt.

Lord Stallard

My Lords, if the noble Lord reads the report, reads between the lines of the report and visits one or two offices, he will see that, in this age when consultation is fashionable, there is almost an argument for consulting someone about the wisdom of going back to the system of grants instead of loans.

Lord Henley

My Lords, the Social Fund has both grants and loans. I am sure that the noble Lord would not suggest that we go back to the old single payments which had grown completely out of control. It would not be right to spend taxpayers' money in that way.