First, as a discretionary scheme with restrictions on the total budget for each benefits agency district, the system ensures that only the most urgent applications are met. This creates a hierarchy of poverty and leaves many applicants without sufficient resources to meet their needs for furniture, clothing etc.
Second, the budgeting loans offered by the scheme are restricted by the ability to repay. A maximum of 78 weeks' repayments are normally allowed at a rate of up to 25 per cent of the applicant's usual benefit level. Claimants with higher needs can quickly exhaust their 'available credit' and then be excluded from the scheme on the grounds of their poverty.
One alternative to the failure of the Social Fund would be to reinstate non-discretionary lump sum payments - with strictly defined entitlement criteria. These payments could be either grants or loans, according to the situation and needs of the claimant. The community care model of the current Social Fund could be built into the entitlement legislation, as could provision for the necessary level of budgetary control.
Nottingham Hostels Liaison Group
2 AugustReuse content