HC Deb 09 December 1977 vol 940 cc920-1W
Mr. Ashley

asked the Secretary of State for Social Services whether the cost of the administration of the Family Fund expressed as a percentage of the money paid out in grants has risen from 6 per cent. in its first year of operation to 10.8 per cent. in the year ended 30th September 1977; if he expects the proportion spent on administration to rise; how this proportion compares with the administrative costs of, respectively, child benefit and attendance allowance; and if he will make a statement.

Mr. Alfred Morris,

pursuant to his reply [Official Report, 2nd December 1977; Vol. 940, c. 434], gave the following information

I regret that, owing to a clerical error, the information I gave in my reply to my hon. Friend on 22nd November—[Vol. 939, c. 678–80]—was incorrect in one respect. The total cost of administration of the Family Fund in the period 1st October 1976–30th September 1977 was £169,529. Thus expressed as a percentage of grants paid, it has risen from 6 per cent. in the first 17 months of its operation to 7.7 per cent. in the year ending 30th September 1977. A small rise such as this is to be expected because, while the proportion of second and subsequent grants—the amounts paid for which are, on average, lower than those for first grants—is increasing, the actual number of payments remains almost constant. I would expect this trend to continue.

The administration costs of the social security benefits specified as a percentage of benefits paid are as follows:

1973–74
per cent.
Family Allowances* 3.7
Attendance allowance† 3.3
1976–77
per cent.
Family allowances and child interim benefit 4.9
Attendance allowance 3.0
* Child benefit was payable from April 1977. In 1976–77, however, the administration costs include take-on work in readiness for child benefit.
† During 1973–74 work was proceeding on the take-on claims for the lower-rate benefit.

The administration of these two benefits, once the initial claim has been approved, comprises mainly the maintenance of payments by order books over a number of years. Therefore, the costs involved are not comparable with those for the Family Fund whose procedure involves detailed examination of each individual application.