Press Release - Helping Those in Financial Hardship: The
Running of the Social Fund
13 January 2005
Sir John Bourn, head of the National Audit Office, reported
today that the Social Fund plays an important role in helping
people in financial hardship, and is reaching many of those in
greatest need. But there is a risk that potentially eligible people
are not aware of the Social Fund and that some Jobcentre Plus staff
may not give appropriate advice because their own awareness of the
Social Fund is limited. For those who do apply to the Social Fund,
the quality of decision-making varies.
Around one-fifth of people in the United Kingdom live in low
income households and over a quarter of households have no savings.
However, only 47 per cent of people on low incomes responding to an
NAO survey were aware of the Social Fund. Lone parent families and
disabled people benefit most from the Social Fund, while take-up is
low amongst pensioners and some ethnic minorities. Even when
customers know about the Social Fund, they are not well informed
about the different types of award or how much money they may
receive. The Department needs to increase awareness of the Social
Fund among its own staff and ensure that potential beneficiaries
are better informed, for example, by staff automatically mentioning
the Fund to new benefit claimants.
The quality of decision-making is a concern for some types of
Social Fund award. In 2003-04, the Department made decisions on 4
million applications to the Social Fund. Speed in handling
applications is important and most Jobcentre Plus districts meet
their target for making decisions. Getting them right first time
depends on staff knowledge and experience as well as obtaining the
relevant evidence, but internal checks indicate that high numbers
of initial decisions on some awards contain errors.
Customers are entitled to a review if dissatisfied with the
decision, firstly by an internal decision-maker and then externally
by the Independent Review Service. In 2003-04, the Internal Review
Service overturned over 50 per cent of Community Care Grant
decisions and 41 per cent of Crisis Loan decisions it received. The
National Audit Office considers that the Department should take
steps to improve its decision-making by introducing up-to-date,
centrally co-ordinated Social Fund training.
The number of staff working on the Social Fund has fallen since
2001-02 while application volumes have increased. According to
departmental data, staff cost per application is lower for the
Social Fund than for some major benefits. But there are significant
differences in staff cost per application across the 90 Jobcentre
Plus districts. The Department is taking steps to reduce these
variations by standardising working practices across the districts.
Longer term efficiencies will require more fundamental change,
including greater use of specialist teams and IT improvements.
The Department recovers a high proportion of loans paid out,
mainly through automatic deduction from customers’ benefit
payments. It is improving its debt recovery procedures for
customers not on benefits, amongst whom debt has risen from £90
million to £180 million in the last 5 years. But more could be done
to improve recovery from people with outstanding debt who return to
benefits. Under present arrangements, the Department cannot recover
Social Fund debt from tax credits, which an increasing number of
customers are receiving in place of benefits.
Sir John Bourn, the head of the National Audit Office,
said today:
"The Social Fund provides an important safety net for
some of the most vulnerable in society, many of whom will have
limited or no access to affordable credit and mainstream financial
services. The Social Fund is reaching many people in need. But the
Department needs to raise awareness of it both with potentially
eligible customers and its own staff.
"I am pleased that the Department is improving its debt
recovery procedures and standardising the process for dealing with
Social Fund applications across the country. But I am concerned
about the standard of decision-making on Social Fund applications,
as evidenced by the high number of errors on certain
awards."
Notes for Editors:
- The Social Fund is administered by Jobcentre Plus and provides
loans and grants to people to meet important or emergency expenses
they cannot pay out of their regular income, for example for
household appliances or to buy food if their benefit money is
stolen. Discretionary awards (Budgeting Loans, Crisis Loans and
Community Care Grants) are paid from a cash-limited budget while
regulated awards (Cold Weather Payments, Funeral Payments, Sure
Start Maternity Grants and Winter Fuel Payments) are paid to all
entitled claimants.
- This report covers five types of Social Fund award: Budgeting
Loans, Crisis Loans, Community Care Grants, Funeral Payments and
Sure Start Maternity Grants. The two further types of award – Cold
Weather Payments and Winter Fuel Payments – are excluded because
they are usually paid automatically to entitled customers, ie no
application is required. For the five types of award covered in
this report, 3 million payments with a total value of £850 million
were made in 2003-04, and £530 million (in loans) recovered.
- Press notices and reports are available from the date of
publication on the NAO website, which is now at www.nao.org.uk.
Hard copies can be obtained from The Stationery Office on 0845 702
3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office which employs some 800 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 03/05
All enquiries to Bill Schaper, NAO Press Office:
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