Poorest claimants are refused help

Almost a quarter of a million applications for a loan to the Social Fund have been turned down because those seeking help were judged too poor to be able to repay, according to official figures

The fund, set up in 1986, provides the emergency safety net for people on income support who take the interest-free loans to buy furniture, cookers or other capital items, with the repayments deducted from their benefit. However, those with existing loans or who already have direct deductions to meet fuel or other debts can be refused a loan on the grounds that they have too little benefit left to make the repayments.

Refusals on the ground of inability to pay have more than doubled since 1992-93, up from 44,890 to 116,095 last year, according to figures provided by Ian Magee, chief executive of the Benefits Agency, to Alan Milburn, Labour MP for Darlington. Precise comparisons are difficult due to a switch from counting applications for loans to counting the number of items refused. But refusals on one count or the other now total almost 250,000 over the past three years.

Mr Milburn said the figures showed that Peter Lilley, Secretary of State for Social Security, was betraying his pledge to target help on the most needy. "The very people that the Social Fund was designed to help now find they are too poor to qualify," he said. "Even before ministers take the axe to social security spending again, thousands of vulnerable people are being left without a vital lifeline."