1. Social Fund Reform and the introduction of local provision in Scotland, Wales and England andrew.jennings@dwp.gsi.gov.uk

2. 2 Social Fund Overview Diverse set of payments, grants and loans with differing eligibility criteria Introduced in 1987-88 to replace Single Payments scheme Designed to help people on low incomes manage large items of expenditure and cope with emergencies Delivered in-house by DWP delivery businesses Hasn’t been subject of a fundamental review since its introduction

3. 3 Challenges facing current scheme Expectations within welfare state on people to find work have changed – no adaptation of the Social Fund to reflect this Grants scheme has not evolved to reflect wider social care agenda Introduction of Universal Credit

4. 4 Welfare Reform Successive governments have ignored the need for fundamental welfare reform, not because they didn’t think that reform was needed but because they thought it too difficult to achieve. Instead of grasping the nettle, they watched as economic growth bypassed the worst off and welfare dependency took root in communities up and down the country, breeding hopelessness and intergenerational poverty. The Government has spent vast sums of money but the poor have become relatively poorer and the rungs on the ladder to prosperity have moved further apart. We need reform that tackles the underlying problem of welfare dependency.

5. 5 Social Justice We can no longer sustain a strategy based on maintenance alone, more concerned with pushing people just above the poverty line than changing their lives. This Government believes that the focus on income over the last decades has ignored the root causes of poverty, and in doing so has allowed social problems to deepen and become entrenched. Early intervention, social investment, payment by results, multi- agency delivery – these should be the watchwords for every government department, local authority and private or voluntary sector provider in the coming years.

6. 6 The Government expects…. December 2010 White Paper February 2011 call for evidence June 2011 Government response to the call for evidence “support is tailored to local circumstances and targeted only at genuine need” “we do not expect local authorities to recreate CCGs and CLs locally” “develop and deliver services tailored to meet the needs of their most vulnerable members”

7. 7 The Government expects…. Local authority workshops – Met with over 140 local authorities in February & March 2012 Welfare Reform Act – Royal Assent given 8 March Social Justice Strategy – published 13 March

8. 8 Social Fund Reform The Social Fund is not closing as payments for maternity, heating and funeral expenses continue. Universal Credit will provide a better service with payments on account, supporting many people in need of short and longer term credit facilities. Some discretionary payments will be replaced by arrangements made by the Scottish and Welsh Governments and better targeted local provision in England Additionally, Government is developing a package of financial capability support to help people to manage their finances more effectively.

9. 9 Social Fund Reform DWP allocated £178 million for current spending review Scotland’s share will be approximately £25 million, based on “legitimate demand” Any New Burdens will be funded

10. 10 Communications strategy The Department is developing its approach to national and stakeholder communications and will be producing further documents and engagement plans in the next few months. Web page - http://www.dwp.gov.uk/local-authority- staff/social-fund-reform/ Next steps

11. 11 Next steps Data sharing Publication of new data – commitment to publish data every quarter until implementation in April 2013 Information on the current scheme Data sharing regulations

12. 12 Next steps Amendment to the Scotland Act 1998 Social Security is reserved to the UK Parliament Need to have a Section 30 Order in force in time for 1 April 2013, when the existing Social Fund will contract and the budgetary transfer will occur

13. 13 Delivery in England There appear to be four main design options that most English Local Authorities are considering: ­Align and combine the funding to existing services and duties ­Contract with new or existing external partners including social enterprises ­Create a new service ­Mixture of the above Within this, four main delivery options are being considered: ­Cash grants and credit unions ­Goods instead of cash ­Vouchers or coupons instead of cash ­Mixture of the above

14. 14 Provisions for implementation April 2013 – CCGs and CLs will be abolished from April 2013. The replacement local welfare provision will be implemented at the same time. Alignment payments will be replaced by new system of Short Term Advances of benefit, part of the national benefit system October 2013 – the introduction of Universal Credit. Introduction of Budgeting Advances for eligible UC customers to replace Budgeting Loans 2013 – 17 – Budgeting Loans will remain for those receiving one of the current qualifying benefits until UC is fully rolled out. The eligible group for Budgeting Loans will diminish over time from October 2013 as customers migrate across to UC. Budgeting Advances will replace Budgeting Loans for Pension Credit customers during this time.