Lilley rejects advice on Social Fund changes

First Edition

PETER LILLEY, the Secretary of State for Social Security, has rejected the conclusions of his advisers and government-commissioned research by refusing to reform the Social Fund.

Mr Lilley said in the preface to the fund's annual report on Tuesday: 'We have seen no evidence to alter our belief that the basic principles of the discretionary scheme are right - indeed, there is much evidence to confirm the fund is working very effectively, as intended.' The Social Fund was introduced in 1988 to provide loans and grants for benefit claimants in urgent need of items such as beds, cookers and clothing. The cash-limited budget is administered through 474 social security offices and replaced an open-ended system of grants.

But, last July, an in-depth examination of the fund, commissioned by the Department of Social Security from the University of York, reported: 'After careful examination of the evidence available, we cannot say that people who receive Social Fund awards are in greater general need than those who are refused. . . nor can we conclude that the Social Fund is meeting its objective 'to concentrate attention and help on those applicants facing greatest difficulties in managing on their income'.'

This followed a report in March by the department's Social Security Advisory Committee, which described the fund as an 'appalling lottery'. The committee explained that because the fund was cash limited, each area office had to operate within its allocation. Consequently, an application refused in one area might be granted in another, or refused in one month but accepted during another.

Ministerial indications were that a review would be considered, but in the report Mr Lilley added only that he would continue to evaluate the scheme and 'introduce operational improvements as required'.

Donald Dewar, Labour's spokesman on the social services, accused the Government of complacency: 'The Social Fund . . . is flawed in concept and arbitrary in its impact.'