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Social progress: from cash loans to food stamps and Asda cards

Social progress: from cash loans to food stamps and Asda cards

🕔02.Apr 2013

One of the banner ads The Chamberlain Files has been running recently is for the Japanese airline, All Nippon Airways (ANA), inviting us all to ‘Let’s Do Japan’. As it happens, my local government colleagues and I at the University of Birmingham have been ‘doing Japan’ for several years, and two of our Japanese visitors last week included among their ‘etiquette gifts’ a set of ‘Furusato or prefecture stamps’ – postage stamps produced to promote local government in, in this case, Hyogo, one of the 47 prefectures that are the equivalent of our counties.

The stamps are attractive and easy to admire, and we inevitably wondered out loud how much Birmingham – or even the West Midlands region, whose population is similar to Hyogo’s – might pay for a similar PO issue. Not out loud, I also wondered about mentioning that by odd coincidence some of our local authorities too would be launching their own stamps this very weekend. But, with these being not pretty promotional ones, but wartime-echoing food stamps, I decided against it. But I will do here.

So many welfare and tax changes are being introduced at the start of this financial year that, apart obviously from planning how to spend the 5% tax cut on our £150,000+ incomes, it’s hard for most of us to keep track of them all. Even excluding those scheduled for later in the year, like the total annual benefits cap and universal credit, there’s housing benefit and so-called bedroom under-occupancy, the 1% cap on increases to working-age benefits, the council tax support scheme, the transition from the disability living allowance to personal independence payments, and several others.

All these changes are controversial, which has meant that the abolition or localisation of much of the discretionary social fund (DSF) – an admittedly small part of the total welfare system, as well as its proverbial Cinderella – has received less, and less critical, attention than it should have done. However, in what, as Paul Dale recently reminded us, is the 9th most deprived local authority in the country – whatever provisions were made for the DSF’s replacement would be important and would need publicising. As it is, while the city council’s chosen solution will surely be debatable, the one thing it’s unlikely to lack is publicity.

The social fund was set up in the 1980s, to provide interest-free loans and grants through both a regulated scheme and a cash-limited discretionary scheme. There are four regulated fund payments: cold weather, winter fuel and funeral payments, and Sure Start maternity grants. These will continue, and the social fund itself, therefore, is not being abolished.

The discretionary scheme is intended to be the final welfare safety net, and it comprises three distinct elements. Budgeting Loans, the largest element, are interest-free loans for people on benefits who have difficulty managing intermittent expenses such as the replacement of white goods and household items, and who might otherwise turn to loan sharks.

Community Care Grants are non-repayable grants, conditional on receipt of income-related benefit, and intended to help vulnerable people – young people leaving a children’s home or foster care, women fleeing from domestic violence – to return to or remain in the community, or to ease exceptional pressure following a family breakdown or other emergency.

Crisis Loans are modest, interest-free loans available to anyone, whether on benefit or not. Applicants must show that, following an unforeseen emergency or disaster, they or their family cannot meet immediate short-term needs and would otherwise face serious risk to their health or safety. Loans, already being ‘managed back’ to pre-2006 levels, before telephone claims were introduced, are restricted to what are defined as essential items.

All three of these elements will now change, but in different ways. Budgeting loans will be renamed budgeting advances, provided as now by the Department for Work and Pensions, and, for those eligible, will gradually be incorporated into universal credit. It’s the other two – community care grants and crisis loans – that particularly concern us here, for it is these that are actually being abolished, with funding being made available to English local authorities (and the devolved administrations in Scotland and Wales) to enable them to provide new locally-administered assistance to vulnerable groups, under existing powers.

Mark those last three words. They may sound harmless, but they’re crucial. They mean that councils have no new statutory duty to provide any specific form of support, for some of the poorest and most marginalised members of our society, out of funding that is not ‘ring-fenced’, and at a time when their diminishing resources are already under the acutest pressure.

Ministerial guidance to councils is expressed in questionable English, but in the most glowing localising terms. “The Government has decided it would not be appropriate to place a new duty on local authorities in respect of the new provision you are planning. You need to be able to flex the provision in a way that is suitable and appropriate to meet the needs of your local communities.”

Even ministers, though, acknowledge that it’s much more about savings than about ‘flexing provision’: “It will mean that individuals will have to take more responsibility in managing their own finances and plan for their future, rather than building up benefit debts they can ill afford.” Local government, in other words, must be even tougher that we in central government have been, but, apart from that stipulation, we no longer accept any responsibility for this ultimate safety net of our supposedly national welfare system.

It’s similar to what’s happening with council tax benefit: systems run till now by the Department for Work and Pensions being transferred to local authorities, but with significant reductions in funding and minimal preparation time. In both cases, localisation is a good principle which in time should provide more efficient, more responsive and more integrated services for local residents. But in Birmingham, for example, the council has been expected to devise and launch a scheme of ‘back-stop’ local welfare provision, with all its attendant criteria and considerations – eligibility rules, forms of assistance, degrees of discretion, advice to unsuccessful applicants, appeals procedures, and, of course, action if or when the money runs out – with ‘start-up’ funding of just over ₤60,000 (or well under half a cabinet minister’s salary).

Naturally, councils have been ‘flexing’ their own schemes and coming up with differing solutions. Some will issue charity food parcels; others plan to give cash grants to food banks to enable them to employ full-time staff and extend opening hours. A minority will continue the practice of cash payments for specified emergency items, or maybe low-interest (rather than interest-free) loans with local credit unions. It’s clear, though, that most have opted, more or less reluctantly, for what generically seem bound to become known as ‘food stamps’: not cash loans, but one-off vouchers redeemable for a list of approved goods, such as food and nappies.

Birmingham’s scheme is outlined in a 13-page/slide publication – Local Welfare Provision (LWP): What is happening in Birmingham from April 2013? – and on page 3 it makes clear, in extremely bold type, that one big thing that’s happening is that “There will be no cash alternative as part of the LWP scheme”. What there will be, for successful applicants moving into Independent Living and needing assistance, is the delivery and installation of basic furniture and white goods. And for successful applicants “in crisis”, pre-paid cards for Asda, enabling the purchase of emergency food and essentials – as opposed to, although they’re not actually mentioned, tobacco, alcohol, phone-related items, and other undesirables.

At present, to the best of my knowledge, Birmingham is the only authority to have gone into this kind of partnership with a single supermarket, and maybe we should be applauding its enterprise. Personally, however, I can’t help feeling that it will very quickly acquire, and find it very difficult to lose, the tag of ‘the Asda council’, and I just hope those involved will feel it was worth it – both the Asda bit, but even more the sacrificed principle.

For there is a fundamental difference between, on the one hand, even small, condition-laden cash grants or loans, and, on the other hand, cards, vouchers, stamps or whatever that can only be exchanged for what, and in this case where, the awarding authority decrees. Cards etc. are infuriating, for, as any asylum seeker will testify, not even Asda stocks all the ‘foods and essentials’ one might want, at the cheapest obtainable prices. But, worse, they are humiliating, stigmatising, socially marginalising, and ultimately infantilising. That a Labour council and cabinet should brush aside such principles without, reportedly, even a serious debate is something I find almost as depressing as the thought of the cards themselves.

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