Briefing for Lord Kirkwood of Hope for QSD on reform of the Social Fund
Citizens Advice is the national body for Citizens Advice Bureaux (CABx) in England, Wales and Northern Ireland. The CAB service is the largest independent network of free advice centres in Europe, with 430 main bureaux in England, Wales and Northern Ireland. Bureaux provide advice from over 3,300 outlets, including bureaux in the high street, community centres, health settings, courts and prisons. All CABx are registered charities.
The CAB service has twin aims: to ensure that individuals do not suffer through a lack of information about their rights; and equally to exercise a responsible influence on the development of policies and practices, both at a local and national level.
In 2006/07 bureaux in England and Wales advised around 2 million people with new or ongoing problems. Of these, 60,965 client enquiries related to the Social Fund (crisis loans, budgeting loans, grants and debts relating to the Social Fund).
Key points:
- Serious and urgent consideration should be given to introducing advance payments of benefit to claimants who are deemed to be likely to be eligible for what they are applying for. This would reduce the number of 'alignment payments' made under the Social Fund to people who need money to tide them over while their benefit application is processed thereby freeing up resources for others in need.
- There is a strong case for extending eligibility for the Social Fund to all those on low incomes and also for increasing the Social Fund's overall budget. People on limited incomes are not always in receipt of a means-tested benefit which would allow them to apply for help from the Social Fund. Currently, many people in need face a postcode lottery when approaching the Social Fund due to priority criteria which vary depending on local budgets.
- The time taken to process Community Care Grant (CCG) applications and decision reviews has risen at a worrying rate in recent month. This would seem to be largely the result of Jobcentre Plus staff being redeployed to handle crisis loans following the introduction of a telephone-based claims system in April 2006. Jobcentre Plus has recently announced measures to deal with the backlog of CCG cases but these are only intended to be temporary.
The Social Fund
The government is considering what a social fund for the future might look like, and wants to explore ways in which the social fund could do more, both in the context of improving financial inclusion and promoting independence. The social fund has a key role to play in extending access to affordable credit.
Key issues
- Introduction of ‘advance payments’
Jobcentre Plus has only been able to deal with the high demand brought on by the move to the telephone system by moving staff around. This has then affected the performance in these other areas. There is no expectation that Jobcentre Plus will be able to meet the demand in the longer term and provide a good quality service unless something changes. Crisis loans are often paid to people who are entitled to Income Support and other benefits, while waiting for those benefits to be processed. Thirty three per cent of crisis loan spend went on ‘alignment payments’ in 2005-06, to people without money who have made a claim for benefits. Our evidence suggests that this will have increased further, as a result of extensive delays to benefit payments following the introduction of Jobcentre Plus’ new system for claiming benefits. This money is therefore not available for other people in need of an emergency loan.
Benefit applications should not be subject to (often lengthy) delays, but we recommend that there should be a fast-track scheme to provide ‘advance payments’ to people who appear to have a valid claim for benefit. This would be repayable in the event of a claimant not being entitled to benefit, and could see demand for crisis loans drop by one-third.
- Eligibility criteria / overall budget
Citizens Advice would like to see much wider eligibility for social fund loans and grants. Budgeting loans and community care grants are currently restricted to people in receipt of income support, income-based jobseekers allowance or pension credit. Yet people getting incapacity benefit, who may have been ill for a long time and whose incomes may be the same as people on income support, cannot apply for a loan or a grant. The introduction of child tax credit resulted in reducing eligibility for budgeting loans as incapacity benefits would have previously been entitled on the basis of income support received for their children. Now this help is provided via child tax credit which is not a qualifying benefit. There is a case for reviewing whether anyone on a low income should have access to loans and grants from the social fund.
A Surrey CAB saw a client who is married with two young children. He was made bankrupt and as a result he lost his house and sold most of his possessions to clear his debts. He is currently being housed along with his family in temporary council accommodation. Meanwhile, he, his wife and two children all sleep in the same bed. He would like to apply for a community care grant so that he can buy beds for his children. He is reluctant to apply for a crisis loan as he is worried about getting into debt again. However, he is on incapacity benefit which is not a qualifying benefit.
A Somerset CAB saw a young woman with a two year old child who had just been offered a house after many months living in a women’s refuge. She had had to flee her home quickly and was advised by the police that it was unsafe for her to return. The client left her abusive situation with debt and was loathe to take on more by applying for a crisis loan. She needed money to furnish her flat but because she was working, part-time and for a low wage, she was considered ineligible for a community care grant.
We are concerned that the size of social fund budgets is too small to meet the needs it sets out to deal with. Many people in genuine need are refused help purely because of priority criteria which can vary depending on the amount remaining in local budgets. The formula for allocating Community Care Grants should be reviewed and additional funds made available to meet all high priority needs.
- Community Care Grant delays
There has been a disturbing rise in the time take to process Community Care Grants, and reviews of CCG decisions. This has, to a large extent, been caused by Jobcentre Plus redirecting Social Fund staff to work on Crisis Loans, to deal with demand that has doubled since the introduction of the telephone claim system in April 06. This has resulted in CAB clients experiencing long delays and considerable hardship. The following cases are from Autumn 2007.
A client visited the bureau to request help with a review for his application for a community care grant. He was HIV positive, on Income Support and needed essential items for health reasons. A request for review was made in August and at the end of October he still hadn’t heard. The client’s state of health has been deteriorating because he has no money for essential items.
A client contacted a CAB because he was going to be released from prison in two days, but had heard nothing about his community care grant application for clothing. It is not possible to apply for a grant until six weeks before release. The bureau adviser called their local Jobcentre Benefit Delivery Centre to be told that they were taking six weeks plus to process forms. There was no way he would get it before release. The client had no clothing except what he is wearing, which could impact on his health and lead to re-offending.
A lone parent – an Iraqi asylum seeker given indefinite leave to remain, with four children aged 13, six, three and one – was told that the expected processing time for CCG reviews in her area was 16 weeks. The family had been homeless and living in a hostel, and were being re-housed by a registered social landlord. The client had no furniture, and no means of buying any, and so applied for a community care grant to purchase beds, a cot for her baby, a cooker, curtains and curtain rails, bedding and kitchen items. The client and her family had been sleeping on the floor since August. They had no privacy and had been using a one ring stove to heat meals so cannot eat together. The situation was very difficult and stressful for the client, who had recently been admitted to hospital with blood pressure problems and black outs.
A CAB was told that a review of their client’s CCG claim would take approximately two months to process. The client and his family had been allocated a permanent home after living in temporary accommodation. He had no money to purchase much needed furniture and furnishings and applied for a CCG but was turned down at the end of July. He returned to the bureau in November because he had still not heard anything, and they were told that it would be at least another two months before a decision was made. The client and his family were greatly distressed by this uncertainty, and the hardship that it caused.
Social Fund Guidance states that reviews should be dealt with within ten days of receipt.
Jobcentre Plus has recognised that this situation is not acceptable and has just announced temporary measures to clear backlogs in reviews (letter 7 Jan 08). Claimants can wait many weeks for a review and the number of cases flowing through to the Independent Review Service has slowed. The temporary easements to Jobcentre Plus administrative systems will mean that Jobcentre Plus only attempts to contact people who have asked for a review once in person. Every claimant who requests a review will receive a letter signposting them to the service offered by the IRS and information about how to seek an independent review, recording the decision on their case and their right to an independent review.
This will, we hope, help to clear the immediate backlog in CCG reviews. However, we are not convinced that these measures can in fact be temporary. There is no expectation that the demand for crisis loans will ease as problems with benefit processing continue.
Other concerns
Crisis loans and telephone problems
The roll-out of the telephone model for claiming crisis loans has been followed by an increase in claimants seeking help from a CAB. Almost all bureaux in two surveys conducted for our report, Not getting though (July 2007), said that their clients experienced problems with claiming crisis loans. The two biggest problems reported were being unable to get through and the cost of telephone calls. Ninety seven per cent of bureaux with the crisis loan telephone model operating in their area reported that they had serious problems getting though.
The scale of the problem is reflected in the volume of case evidence sent to us by bureaux. We received approximately 900 reports about problems clients have experienced in accessing a crisis loan in the months from September 2006 to May 2007. The following cases show that many clients are going without food and shelter as a result of being unable to get through to Crisis Loans Direct. Bureaux advisers are also finding it extremely inaccessible:
A disabled man went without food for six days because he had no money and was unable to get a reply from the crisis loans phone number.
A client and her disabled son had no money and were homeless. The adviser phoned the crisis loans number but continually got the engaged tone. She then tried to get through on five direct line numbers that had just been given to the bureaux by the social fund manager bat the benefit delivery centre. The adviser left messages on voicemails but no-one responded that day or since. The client and her son had to sleep rough outside that night as the bureau was unable to find them any emergency accommodation.
A man looking after his week-old baby was told by his Jobcentre Plus office he would have to apply for his crisis loan over the phone. He didn’t have a landline, was not offered a paper form and was told to use a phone box. He was unhappy about this as he had to leave his baby outside in her pram. He could not get through and, after several attempts, sought help from a CAB. They could not get through either and the man was left with no money to support his partner, baby and three other children.
A man was left with no money over the Christmas period because bank charges following unauthorised direct debits by his gas supplier ate up all his JSA. He tried to apply for a crisis loan but was unable to get through, despite trying for two hours in a freezing public phone box.
A bureau reported how the introduction of telephone claiming in their area had resulted in a dramatic increase in requests for help:
“If people can’t get through to crisis loans on the phone, they will accept a letter from CAB requesting help to apply. Most of the referrals come from security guards at the Jobcentre. In March 2006, telephone became the main method for applying for applying for a crisis loan. Between April and August we’ve dealt with 159 cases, compared with 14 cases in the same period in 2005.” A Berkshire CAB, Autumn 2006.
Improving access to crisis loans - recommendations from our recent briefing 'Not getting through':
- We recommend that Jobcentre Plus undertake an analysis of crisis loan applications to assess whether telephone claiming disadvantages claimants who find using a telephone difficult or impossible.
- Jobcentre Plus should continue to work to improve the capacity of it’s’ telephone system to cope with demand.
- Given the urgency with which crisis loans are needed, there must be a clear process for dealing with crisis loan applications at all local offices. Jobcentre Plus must be able to demonstrate that local offices are helping claimants make crisis loan claims in person.
- Jobcentre Plus must review the number and spread of locations at which crisis loan decisions and payments can be made. Claimants in rural areas can find themselves having to travel long distances on public transport and at significant cost to access crisis loan payments. Plans to extend the opening times to 4.30pm will help claimants having to make long journeys, but this will not help with the cost. Better use of travel warrants or systems for enabling claimants to collect payments from other locations, such as Post Offices, must be considered.
What Jobcentre Plus have done
In August Jobcentre Plus implemented a six point action plan to improve telephone access to crisis loans. These plans have involved moving staff from other areas of social fund work to deal with crisis loans and moving away from the goal of taking a claim and making the decision in freephone call. Instead they have enlisted the help of contact centres staff to take crisis loan applications. They then email the claim to decision makers in benefit delivery centres who call the claimant back with a decision.
For further information contact: Bethan Collins, Parliamentary Officer - Parliamentary
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