§ The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond)I am pleased to announce that the gross discretionary social fund budget for 2004–05 will be £689 million. This includes a further increase in net treasury funding of £10 million, which is additional to last year's extra £20 million. This means that net funding is now £30 million higher than in 2002–03, and is the second of three annual increases from a £90 million boost for the discretionary social fund announced in the autumn 2002 pre-budget report.
80WS After careful consideration, we have decided to allocate all the extra net funding to community care grant needs. We have therefore increased the community care grant (CCG) budget by £10 million. This is a further significant increase that will help the most vulnerable. It has been distributed so that every district benefits by an increase in their CCG budget and districts move closer to meeting the same proportion of demand nationally.
The gross loans budget for 2004–05 will be £560 million, which represents an increase of £2 million over the April 2003 allocation. The increase is owing to higher loan recoveries and setting a lower contingency reserve than 2003–04. To maintain fairness within the scheme, the loans budget will continue to be allocated to districts to support consistency of outcome for applicants wherever they live.
The sum of £1 million will be retained centrally as a contingency reserve, which, for example will provide additional help to districts facing unexpected and unplanned expenditure.
Details of individual district budget allocations have been placed in the Library.
The discretionary social fund budget is cash limited. Budgets are allocated to districts on 1 April each year.
The gross discretionary SF budget allocated for 2004–05 is £689 million made up of:
New money (AME) £168.2 million Forecast loan recovery £520.8 million This was allocated as follows:
Loans £560 million Grants £128 million Contingency reserve £1 million If the forecast for loan recoveries proves to be an underestimate, any additional recoveries can be allocated to districts during the year.
The contingency reserve is held centrally and allocations made from it reimburse districts for expenditure resulting from a local accident or disaster (eg, flooding).
Since April 1997, the gross discretionary social fund budget has increased by £221.5 million from £467.5 million to £689 million, an increase of more than 47 per cent.
Since April 1997, the community care grant budget has increased by £31 million from £97 million to £128 million, an increase of nearly 32 per cent.
My right hon. Friend the Secretary of State will be making a number of minor changes to the discretionary social fund, with effect from 5 April 2004. The changes to the fund are minor clarifications of guidance and directions, and, in the main, are consequential to legislative changes being made in respect of other social security benefits.
Details of the changes have been placed in the Library.