Skip to main content

Social Fund

Volume 751: debated on Tuesday 28 January 2014


Asked by

To ask Her Majesty’s Government what arrangements will be made from April 2015 for the payment to local authorities of the moneys devolved from the Social Fund.

My Lords, the nationally run community care grants and crisis loans were not working as intended. For two years from April 2013, funding was provided by the Department for Work and Pensions to local authorities to help them provide support to local people in moments of crisis, as they are better placed to assess local need. From April 2015, local authorities can continue to do this from their general fund, in line with local priorities.

My Lords, in opposing the ring-fencing of Social Fund moneys, the Minister assured your Lordships’ House that,

“we are equally committed to ensuring that this money is targeted on and reaches the most vulnerable people”—[Official Report, 11/1/12; col. 214.]

by clearly identifying it. Now this assurance looks to be worthless, because it seems that the money is being lost in the 2015 settlement, if it is there at all. Will the Minister give a clear commitment that central government will continue to provide local authorities with a specific revenue grant in order to protect those most vulnerable people?

My Lords, local authorities are doing a good job in providing the kind of support that is available in their local areas, which previously would have been provided through the discretionary Social Fund. From the evidence that we have seen so far, local authorities are able to do this without drawing on the full amount that has been provided until now from DWP, and which was committed to only until the end of the next financial year.

My Lords, these moneys were given to local authorities in England in order to provide support for the most needy and those in the most difficult circumstances. I find it difficult to understand why Her Majesty’s Opposition are in favour of no ring-fencing in Scotland or Wales but are in favour of ring-fencing in England. Will my noble friend tell the House whether there are any indications of where local authorities are not meeting the expectations of helping those in the most distressed circumstances? Should we not trust local authorities to deliver to their local communities to meet local needs?

My noble friend makes a very important point. Indeed, there is no evidence to suggest that local authorities are not fulfilling their responsibilities. Indeed, there is evidence of new approaches from local authorities to provide support, which is having a wider and more positive effect because the way in which they are doing it also is helping to provide employment through working with the third sector.

My Lords, some councils which have no statutory duty to provide local welfare might decide to close these schemes altogether. With the significant reduction in local authority funding, that is not unlikely. How will the Minister ensure that we do not end up with a postcode lottery for this lifeline support for the most vulnerable people in our society? They will not get the screaming headlines such as those about the threatened 50p tax rise.

The statutory obligations on local authorities have not changed. They remain the same and are not linked to the provision of funding that came from the DWP. As I said, from the evidence that we have seen so far, local authorities are doing a good job of supporting people in times of crisis and are doing it without using all the funding that has been provided so far from DWP.

My Lords, in view of what the Minister has said, will she assure the House that there will be a proper assessment of the take-up of government funds by local authorities in 2013-14 to inform future consideration of the success or otherwise of these changes? How will the Government ensure that future consideration is linked to the wider impact of the Government’s welfare reforms?

The Department for Work and Pensions is committed to reviewing how local authorities have been providing this support until now, and it will continue to do so during the course of 2014. What I hope we will see from that is that the very best practice which is being carried out in some local authorities will be used to inform other local authorities, and that the best practice is spread widely.

My Lords, the amount of funding for local councils to replace the DWP crisis loan scheme was set for some reason at 2005 levels. In Newcastle, 1,800 awards have been made so far this year, covering issues such as free meals during school holidays, people fleeing violence, fire, and a range of other emergencies. As my noble friend Lady Lister said, the local government finance settlement makes clear that government funding will end in 2015-16. Will the Government now heed the plea of Newcastle Council’s revenue officer, echoed by others up and down the country, for,

“this money not to be cut”—

and, if not, why not?

As the noble Lord knows, the process of deciding the amount of funding that is made available through the local government finance settlement is very much considered on the basis of a range of issues, including pressures and demands that may be greater in some parts of the country than others. That is why we provide a higher rate of funding in some areas as opposed to others, as we do in Newcastle. Certainly, what we are also expecting all local authorities to do is to carry out measures that allow them to realise their own savings so that they can continue to provide the services that are needed by local people.

My Lords, the Minister confirmed earlier that the funding stream is to be subsumed into the general funding stream for local authorities. May I remind the Minister that the stream is going to be cut by some 13% in 2015-16, following the 9% cut in the year that we are just about to enter? We know that the basis for the distribution of the funding will continue to cut spending power for the most deprived councils, while increasing spending power for the wealthiest councils. I ask the Minister: how is that fair to the vulnerable?

As the noble Lord knows from the debates that we have had on the local government finance settlement, we look at the total spending power available to local authorities in terms of their spending revenue, and in 2015-16 the reduction of their spending power will be 1.8%. I also make the point to the noble Lord that in the course of our discussions with local authorities in looking at streams of funding, we have clearly understood where they are facing big pressures. That has led us, for example, to ensure that there is significant new funding for social care.