Welfare Reform Bill

My Lords, the current discretionary Social Fund is clearly in need of reform, as several noble Lords agreed today. From 2006 to 2011, the number of crisis loan awards tripled. The evidence does not suggest, however, that this increase reflected an underlying increase in genuine need, as it was largely independent of the recession. Analysis of the increased demand showed that it was driven by young single people on jobseeker’s allowance, many of them still living at home, rather than reflecting a more general trend across all benefit client groups. Strong action has already been taken to get spending under control, and demand has already reduced markedly. Analysis of the current community care grants scheme shows that the remote operation of a highly discretionary scheme may not deliver the best use of a limited resource. The scheme is often poorly targeted due to the lack of integration with the wider social care agenda. Local authorities and the devolved Administrations are better placed to determine and support the needs of local vulnerable people than the current centralised system. Clause 69 paves the way for reform of the discretionary Social Fund. Community care grants and crisis loans for general living expenses will be replaced by new local provision designed and delivered by local authorities in England and the devolved Administrations in Scotland and Wales. Budgeting loans and crisis loans for alignment to benefit or wages will be replaced by a national system of advances of benefit through the payments-on-account provisions set out in Clause 98. So the majority of the discretionary element of the Social Fund money will still be administered at national level because it is closely aligned to the ongoing benefit system: that is the most efficient way to do it. That discretionary loan fund pot at national level, which revolves, is currently standing, I believe, at £1.2 billion. I compare that with the £178 million going locally which is divided into grants, currently at £141 million, and general living expenses at £36 million. That does not add up to the full £178 million because there is another £1 million of transition funding.