Concern over crisis payments to help the poorest in Wales

Tens of thousands of people in Wales could find themselves destitute unless the Welsh Government comes up with new plans to help them, according to an influential Labour AM.

In a jointly written pamphlet published by the Bevan Foundation, Cardiff West AM Mark Drakeford and researcher Kirrin Davidson say the UK Government’s unilateral decision to devolve responsibility for helping the very poorest people to the Welsh Government poses a potential threat to the well-being of many.

Since the 1980s, the Social Fund has been the “safety net” that offers loans or grants to provide basic necessities to those in most need, many of whom have experienced a traumatic crisis.

In England, responsibility for the Community Care Grant and Crisis Loan elements of the Social Fund is set to be transferred from the Department for Work and Pensions to local authorities. In Wales and Scotland it is being left to the devolved national administrations to decide how the money should be distributed in future.

In 2009-10, more than 93,000 out of nearly 135,000 applicants were awarded a Community Care Grant or Crisis Loan in Wales, with the total paid out reaching more than £12m. The payments and loans are made in exceptional circumstances, where claimants need extra money to cover unexpected and one-off costs that cannot be budgeted for out of regular benefit income.

Mr Drakeford, a former professor of social policy who was senior special adviser to Rhodri Morgan when he was First Minister, and Ms Davidson call in their report for an urgent debate on the Social Fund’s future in Wales, looking for ways in which these new responsibilities might best be discharged here.

There are concerns that in England local authorities may seek to get social workers to take responsibility for giving grants and loans.

But the report’s authors are opposed to such an outcome in Wales, stating: “[It] would be wholly undesirable that people whose needs arise from a simple lack of money should have to transform themselves into welfare cases in order to obtain the help they need.

“In particular, therefore, we reject the assumption that social services departments should be expected to take on Social Fund responsibilities. The role of social workers needs to continue to be one of advocacy and advice, rather than cash rationers.”

Instead it is proposed that other bodies could become responsible for distributing grants and loans.

Mr Drakeford said: “We have an opportunity to take a different approach to that in England. We can develop arrangements that are in line with Welsh policy principles. For example we could work alongside credit unions, and combine the administration of the Social Fund with other services such as provision of advice on benefits and finance.”

The report also traces the history of the Social Fund, noting how it has been troubled from its introduction in 1988. Many critics have taken the view that the discretionary elements involved in grants and loans represented a departure from the principle of universal benefit entitlement.

“There has been a great deal of criticism of the fund over the years,” said Mr Drakeford, “We have the chance to learn from past mistakes and put a system in place that meets people’s immediate needs and also helps to prevent future crises.”

The report concludes: “Because the choice today is not between the fund and something better, but between the fund and no help at all, we have argued here that a debate is urgently needed, here in Wales, about the new responsibilities which are coming the way of the National Assembly and Welsh ministers.

“Simply to pass the policy parcel down the line to local authorities is not necessarily an answer which serves the best interests of those who most need help.

“Rather, a range of more imaginative and effective possibilities might be capable of being mobilised which could rescue something worthwhile for those who will be directly affected in Wales. Whatever the outcome, a debate is urgently needed and we hope that this paper might help to spark one over the weeks ahead.”