CPAG Guest post: The death of the social fund?

Guest post by Rys Farthing

One of the many welfare reforms currently underway is the localisation of the social fund. Currently administered by the DWP, the discretionary elements of the social fund are being devolved to local authorities, who will each need to develop and implement their own localised replacement schemes by April 2013.

 However, the funding made available to each local authority to develop a localised replacement scheme represents a significant reduction in the funding that was previously provided to households in each region. Based on a sample of 12 Local Authorities who shared the details of their settlement with CPAG, the average reduction in funding for the social fund replacement schemes in 2013/14 compared to the funding for the nationally administered Social Fund in 2011/12 is 13.9%, rising to 15.6% in 2014/15.(1) However there was significant variation across regions, with some regions indicative settlements being 5.8% lower in 2011/12 than 2013/14, spanning up to a massive 20.4% lower.

The percentage reduction in “social fund scheme” spends between 2011/12 and 2013/14 and 2014/15 across 11 different Local Authorities.

These reductions continue a recent trend in reducing support available for the social fund. Reforms introduced in 2011 meant that Crisis Loans were no longer available for items such as beds and cookers (exceptions were allowable for disasters such as after a flood); the rate of living expenses was reduced from 75% to 60%, and a cap of three loans per year was introduced. These were significant changes in themselves and already represent a reduction in the support that was available to households for many years previous. If you compared the reductions indicated in the settlement letters with the amount of help available in each region in 2010/11 (before this first round of reforms were introduced), the localisation of the scheme represents an even more significant cut. For example in one local authority, comparing the indicative settlement for 2013/14 with the actual 2010/11 spend highlighted a 41.6% reduction (2). The social fund was already under pressure before its localisation.

 While Local Authorities received around 20% on top for administration (which simply reflected the costs of administering the scheme at a national level), many authorities CPAG spoke to were worried that this amount, combined with start up grants as low as £4,000, would not adequately cover the costs of developing and implementing an entirely new scheme by April 2013. Some felt that they would need to dip into programme funding during the first year to cover these costs – further increasing pressure on the funding available to develop a localised scheme.

 On top of these pressures on the scheme, settlements to authorities are not ring-fenced. At a time when councils are feeling the strain of overall budget cuts and attempting to localise council tax benefit cuts fairly, pressure on any localised scheme is going to be intense. So intense that many authorities we spoke to are worried that even referring to their schemes as “social fund replacement schemes” will set claimants expectations too high. One of the core messages authorities wanted to send to central government was to stop saying the social fund was localising and to start saying it was being abolished to help them manage expectations. As one local authority officer recently said to us, ‘The social fund is not being localised, the social fund is dead’.

 CPAG is opposed to the government’s plans to abolish the social fund and leave councils to fill the gap with fewer funds. The death of the social fund is risking the wellbeing of children and families and could potentially leave them with nowhere to go to meet exceptional needs, for example when they have no cooker to feed their children or bed for them to sleep in. Ministers will need to be ready to intervene in the eventuality that local authorities are unable to meet the need.

Rys Farthing

Senior Policy Officer, CPAG 

CPAG has produced two reports about the social fund:

How the social fund can be delivered at a local level in London and the Localisation of the social fund – and note for and from practitioners (England)

(1). Calculated by comparing the indicative settlement figures provided to Local Authorities by DWP to data about Social Fund spends in regions for April-Sept 2011/12 which have been doubled out, to estimate a full year spend. OBR CPI predictions used to keep calculations real to 2011/12 value.

(2). Compared to a 13.6% reduction between 2011/12 and 2013/14 in the same Local Authority.

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