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Local support to replace Community Care Grants and Crisis Loans for living expenses – a call for evidence - closes 15/04/2011

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kevin
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This call for evidence sets out the Government’s proposals on local delivery of assistance to replace Community Care Grants and Crisis Loans for general living expenses.

It sets out our plans for delivery by local authorities in England in more detail and invites involvement in discussions about how the locally-based service could be designed and administered. We would value your contribution.

This call for evidence will close on 15 April 2011. The Government will respond to feedback following these discussions in the form of a published summary document of ideas and contributions later in the spring.

This call for evidence is specifically aimed at:

  • local authorities and
  • organisations representing vulnerable customer groups.

How to respond

If you wish to contribute to the discussion please send your comments and ideas to:

Email: social.fund@dwp.gsi.gov.uk<

Social Fund Reform Team
Department for Work and Pensions
Caxton House
6-12 Tothill Street
London
SW1H 9NA

Please ensure your response reaches us by 15 April 2011.

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kevin
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Urgent restrictions on Crisis Loans have been announced today in order to protect the discretionary Social Fund budget, which could run out before Christmas if current spending levels continue.

Crisis Loans were set up to meet immediate short-term needs in an emergency. Yet in the last seven years there have been over seven million claims from 400,000 regular users applying for 10 or more crisis loans. Since telephone claims were introduced in 2006 daily spend on the loans has tripled to £1million a day.

From April, the Department for Work and Pensions will no longer pay Crisis Loans for items such as cookers and beds, will limit the amount paid for living expenses and will set a cap of  three Crisis Loans for general living expenses in a rolling year.

Minister for Pensions, Steve Webb said:

"It is clear that the system is acting as a sticking plaster that isn’t addressing the real problems that people are facing. We need to ensure that crisis loan support is correctly targeted at those who need it most and ensure we can still afford to pay Budgeting Loans. That’s why we’ve taken urgent action today to protect the budget.

"We don’t want to leave people on low incomes without the safety net of interest-free Budgeting Loans and then turning to loan sharks for help."

Budgeting Loans are intended to help long-term income-related benefit recipients cope with the cost of essential items like furniture and household equipment. If spending continued, money for them would run out by Christmas.

Notes to Editors:

The planned changes to the Crisis Loan system from April 2011 are:

  • No longer paying Crisis Loans for items such as cookers and beds. There will be some residual support for people following a disaster such as flooding.
  • We will reduce the rate paid for living expenses from 75 per cent down to 60 per cent of benefit rate. This will align with the position for Jobseekers Allowance cases paid at the hardship rate.
  • We will implement a cap of three Crisis Loan awards for general living expenses in a rolling twelve month period. This policy was tested by Jobcentre Plus in 2009-10.

Social Fund: the current scheme

The Social Fund currently consists of a discretionary and a regulated scheme.

Discretionary Scheme: Community Care Grants, Budgeting Loans and Crisis Loans.

Regulated Scheme: Cold Weather Payments, Funeral Payments, Sure Start Maternity Grants and Winter Fuel Payments.

Social Fund: reform

We have already announced as part of wider welfare reform that the discretionary elements will be reformed from 2013.

  • The Welfare Reform White Paper announced that local authorities in England will deliver reformed support to replace Community Care Grants and Crisis Loans for general living expense.
  • Crisis Loan alignment payments, interim payments of benefit and Budgeting Loans will be replaced by a system of payments on account integrated into benefits.
  • Replacing Community Care Grants and Crisis Loans with provision tailored to local services and integrated with wider support will ensure support properly targeted at those in the greatest need.

http://www.dwp.gov.uk/newsroom/press-releases/2011/mar-2011/dwp024-11.shtml<

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kevin
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Steve Webb< (Minister of State (Pensions), Work and Pensions; Thornbury and Yate, Liberal Democrat)

To meet genuine need, and in addition to continually recycling from the £1.3 billion fund, this Government are committed to maintaining core funding of £178 million a year for the discretionary social fund scheme over the spending review period.

However, since the introduction of remote telephone applications in 2006, there has been an unjustifiable growth in the use of crisis loans. The number of awards made has increased from around 1 million to 2.7 million while spending has almost tripled, reaching £233 million in 2009-10. In the last 12 months alone, over 17,000 people received 10 or more crisis loans.

On current forecasts, the resources for 2011-12 will only satisfy two-thirds of expected demand. Without corrective action to bring spending back under control the shortfall would need to be met from the budgeting loan scheme.

The situation is unsustainable, so I am announcing the introduction of three changes to the crisis loan system, to rebalance supply with affordable resources, to ensure funding for community care grants is protected, and to ensure we can continue to make budgeting loans throughout the year.

From 4 April 2011:

we will no longer pay crisis loans for items such as cookers and beds. There will be residual support for people following a disaster such as flooding;

we will reduce the rate paid for living expenses from 75% down to 60% of benefit rate. This will align with the position for jobseekers allowance cases paid at the hardship rate; and

we will implement a cap of three crisis loan awards for general living expenses in a rolling 12-month period.

Without these measures budgeting loans would need to be withdrawn before Christmas. This would leave significant numbers of people on low incomes with little alternative but to turn to high cost or illegal lending.

http://www.theyworkforyou.com/wms/?id=2011-03-03a.45WS.0<

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kevin
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The government has been accused of a "mean-spirited attack" on vulnerable people after deciding to restrict poor families' access to interest-free loans to see them through crises.

Crisis loans issued under the Social Fund will be restricted from April to stem rising costs, the Department for Work and Pensions said today<.

The DWP said that since 2006 there had been a tripling in the costs of the loans, which are designed to cover loss of money, damage to property or emergency travel expenses, or to help people waiting for benefit payments. Many people had made multiple claims, it said.

From April, claimants will be restricted to three loans to cover general living expenses within a 12-month period and loans will no longer cover items such as cookers and beds. The level of loans will be capped at 60% of claimants' main benefit - usually jobseeker's allowance - down from 75%.

Pensions minister Steve Webb said crisis loans were acting as a "sticking plaster" and warned that action was needed to protect other parts of the Social Fund, such as budgeting loans, which helps poorer families fund the cost of essential items.

However, today's move was attacked by campaigners.

"These changes will hurt those who need it most. Far from being the sticking plaster the minister proclaims, these loans are a vital part of the welfare system for those in desperate situations," said Helen Dent, chief executive of Family Action.

"They are a smart intervention - crisis loans help prevent places in hospitals, refuges and hostels being blocked; funding cookers means families do not resort to takeaways or handouts from food banks. This is a dismal decision and the cost will be more misery for families close to breaking."

"This is a mean-spirited attack on people in desperate need of help," said Brendan Barber<, general secretary of the TUC. "These reductions will not save great sums of money and are therefore more about punishing vulnerable people than balancing the books."

The news follows the government's much-criticised decision to scrap the national delivery of crisis loans and community care grants - a non-refundable form of support for vulnerable families - and give councils the power - though not a duty - to deliver equivalent forms of support.

This will deepen poverty and potentially worsen relationships between social workers and their clients<, warn welfare rights experts.

http://www.communitycare.co.uk/Articles/2011/03/03/116390/ministers-accu...<

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John
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3 March 2011 – Changes to Crisis Loans – protecting the vulnerable<

Urgent restrictions on Crisis Loans have been announced today in order to protect the discretionary Social Fund budget, which could run out before Christmas if current spending levels continue.<

Crisis Loans were set up to meet immediate short-term needs in an emergency. Yet in the last seven years there have been over seven million claims from 400,000 regular users applying for 10 or more crisis loans. Since telephone claims were introduced in 2006 daily spend on the loans has tripled to £1million a day.<

From April, the Department for Work and Pensions will no longer pay Crisis Loans for items such as cookers and beds, will limit the amount paid for living expenses and will set a cap of  three Crisis Loans for general living expenses in a rolling year.<

Minister for Pensions, Steve Webb said:<

"It is clear that the system is acting as a sticking plaster that isn’t addressing the real problems that people are facing. We need to ensure that crisis loan support is correctly targeted at those who need it most and ensure we can still afford to pay Budgeting Loans. That’s why we’ve taken urgent action today to protect the budget.<

"We don’t want to leave people on low incomes without the safety net of interest-free Budgeting Loans and then turning to loan sharks for help."<

Budgeting Loans are intended to help long-term income-related benefit recipients cope with the cost of essential items like furniture and household equipment. If spending continued, money for them would run out by Christmas.<

Notes to Editors:<

The planned changes to the Crisis Loan system from April 2011 are:<

Social Fund: the current scheme<

The Social Fund currently consists of a discretionary and a regulated scheme.<

Discretionary Scheme: Community Care Grants, Budgeting Loans and Crisis Loans.<

Regulated Scheme: Cold Weather Payments, Funeral Payments, Sure Start Maternity Grants and Winter Fuel Payments.<

Social Fund: reform<

We have already announced as part of wider welfare reform that the discretionary elements will be reformed from 2013.<

Media Enquiries: 0203 267 5110
Out of hours: 07659 108 883
Website: www.dwp.gov.uk
<

kevin
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Fifteen charities have slammed the government's consultation on scrapping national poverty payments<, accusing it of containing "no analysis" of the needs of vulnerable recipients who stand to be driven deeper into poverty.

The coalition, which includes Homeless Link, Family Action and the National Housing Federation, has written to Department for Work and Pensions minister Steve Webb calling for him to justify his plans to abolish parts of the Social Fund.

<

The Welfare Reform Bill would scrap community care grants and crisis loans, which are paid to families in emergencies, and give councils the power - but not the duty - to set up similar schemes locally. The Independent Review Service, which reviews Jobcentre Plus decisions, will also be scrapped without any replacement.

The changes have proved very unpopular with anti-poverty groups and welfare rights experts, who warn that social workers' relationships with their clients could be adversely affected if they had to make decisions about financial payments.

In February, the DWP launched a consultation on the proposals, which closes today.<

However, in the letter to Webb, the charities said: "The department has issued a call for evidence which has less than four pages of discussion of the government's proposals, and contains practically no analysis of the needs and circumstances of people who currently receive community care grants and crisis loans. The vision of how local authorities and the devolved administrations will respond to the change is extremely sketchy, and gives no reassurance that an adequate service will be provided. We do not consider that the department has made the case for the proposed changes and - in the context of current spending pressures on local authorities – it seems to us that these proposals will result in radical reduction or abolition of such provision on a wide scale."

A DWP spokesperson said: "The radical reform and simplification of the benefit system through universal credit presents an opportunity to overhaul the outdated Social Fund system. The administration of community care grants and crisis loans is complex, expensive, poorly targeted and open to abuse. These services can be more effectively designed and run locally, benefiting from local knowledge and wider support services."

http://www.communitycare.co.uk/Articles/2011/04/15/116690/charities-slam...<

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kevin
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Community Care Grants and Crisis Loans: DWP call for evidence

18 April 2011

Click to view response and other information.

http://www.disabilityalliance.org/r70.htm<

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anonymous (not verified)
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Local support to replace Community Care Grants and Crisis Loans for living expenses in England

Summary: 

This is the government's response to the call for evidence on proposals on local delivery of assistance to replace community care grants and crisis loans for general living expenses.

http://www.dwp.gov.uk/docs/social-fund-localisation-response.pdf<

anonymous (not verified)
anonymous's picture

Local communities will be at the heart of re-designing local welfare services, according to evidence published by the Government today.

As part of the Welfare Reform Bill, funds for Community Care Grants and Crisis Loans for general living expenses will be transferred to Local Authorities and devolved administrations by April 2013.

Today, the Department for Work and Pensions’ response to a Call for Evidence on how to deliver and design new local services revealed huge scope for innovation and creativity.

Minister for Pensions Steve Webb said:

"For too long people have been let down by a disconnected welfare service and this is the first step in empowering local communities to design and deliver local services tailored to meet the needs of their most vulnerable members.

"This evidence will assist the development of the new services and demonstrates the potential for local innovation, strengthening and developing partnerships between local government and community based organisations."

The report also contains new information about the current scheme that will help local authorities in developing their plans, including for the first time local authority level social fund data.

Notes to Editors:

A copy of the response is available here: http://www.dwp.gov.uk/consultations/2011/local-support-replace-ccg-cl.shtml<

Social Fund: reform

The Social Fund currently consists of a discretionary and a regulated scheme.

  • Discretionary Scheme: Community Care Grants, Budgeting Loans and Crisis Loans.
  • Regulated Scheme: Cold Weather Payments, Funeral Payments, Sure Start Maternity Grants and Winter Fuel Payments.

We have already announced as part of wider welfare reform that the discretionary elements will be reformed from 2013.

  • The Welfare Reform White Paper announced that local authorities in England and devolved administrations will deliver reformed support to replace Community Care Grants and Crisis Loans for general living expenses.
  • Crisis Loan alignment payments, interim payments of benefit and Budgeting Loans will be replaced by a system of payments on account integrated into benefits.
  • Replacing Community Care Grants and Crisis Loans with provision tailored to local services and integrated with wider support will ensure support properly targeted at those in the greatest need.

http://www.dwp.gov.uk/newsroom/press-releases/2011/jun-2011/dwp070-11.shtml<

anonymous (not verified)
anonymous's picture

The C&AG has qualified the Social Fund Account for the eighth consecutive year. The account has been qualified because of material levels of error in discretionary awards, which include Budgeting Loans, Crisis Loans and Community Care Grants, and in Funeral Expense Payments. He has also qualified, for the first time, his opinion on Cold Weather Payments.

"Jobcentre Plus has made good progress in a number of areas about which I have expressed concern in the past; but there are still problems and the level of error in these payments is still material. This has led me to qualify my opinion. Jobcentre Plus should continue work to address my concerns and I will continue to monitor progress."

Amyas Morse, head of the National Audit Office, 11 July 2011

The Comptroller and Auditor General, Amyas Morse, has qualified the Social Fund White Paper Account for the eighth consecutive year. The account has been qualified because of material levels of error in discretionary awards, which include Budgeting Loans, Crisis Loans and Community Care Grants, and in Funeral Expense Payments. He has also qualified his opinion on Cold Weather Payments, for the first time, because of the level of error found in these payments.

The C&AG has for the second consecutive year, also limited the scope of his opinion on the level of debt within the account, owing to the absence of sufficient appropriate evidence to support the breakdown of the customer debt balance.

The NAO estimates that the most likely level of error in discretionary awards, Funeral Expense Payments and Cold Weather Payments in 2010-11 is £98.3 million, approximately 2.4 per cent of total payments. The estimated level of error in Cold Weather Payments during 2010-11 totalled £21.5 million, some 5 per cent of payments (no error was found in 2009-10). The C&AG has, however, removed his qualification of Sure Start Maternity Grants, as the NAO found no errors in 2010-11 payments.

The NAO's work shows that the main causes of 'irregularity' are Jobcentre Plus's inability to provide the documentation needed to support cases selected for audit and a failure to comply with regulations when making awards. Jobcentre Plus believes that the continued high instance of error is due to the ongoing reorganisation of its process centre network, and that the inability to locate all documentation results from the large amounts of paperwork that have been moved between JCP offices during the year.

In an attempt to resolve the issues that the C&AG reported on in 2009-10, Jobcentre Plus set up the Social Fund Task Force. However, while Jobcentre Plus has made progress in a number of areas, the sheer number of records and the complexities of the computer systems involved have meant that work on some areas has not progressed as quickly as Jobcentre Plus had hoped. The Task Force's plans provide a solid foundation on which Jobcentre Plus should build in future to resolve the issues.

http://www.nao.org.uk/publications/1012/social_fund_2010-11.aspx

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