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We’ve done voucher deal with Asda, but it’s not exclusive says council

We’ve done voucher deal with Asda, but it’s not exclusive says council

🕔02.Apr 2013

asdaCabinet member John Cotton has written to every Labour group member insisting that while the city council has brokered a deal with Asda to provide gift cards to Birmingham’s poorest families, it has not signed an exclusivity agreement with the supermarket giant.

Cllr Cotton, cabinet member for social cohesion and equalities, was forced into a swift rebuttal after an article appeared in the Guardian newspaper outlining a deal by Birmingham with Asda to provide crisis welfare payments in the form of pre-paid cards – believed to be the first arrangement of its kind anywhere in the country.

He defended the decision, claiming that other supermarkets had been approached but did not get back to the council in time to introduce the Local Welfare Provision scheme by the April 1 deadline set by the Government.

Negotiations are continuing with other retailers and there is no intention to rely solely on Asda if more supermarkets can be persuaded to come on board, Cllr Cotton added.

The row highlights growing tension in the Labour group over the way the council is responding to Government welfare reforms. A copy of the Guardian article was emailed to his Labour colleagues by Cllr John Clancy, who is believed to be prepared to challenge Sir Albert Bore for the council leadership.

In his email Cllr Clancy suggested that Asda should be required to introduce the Living Wage of £7.45 an hour for employees before being permitted to do business with the council. The council has recently stated that firms should sign up to the Living Wage if they want a contract with the local authority.

Cllr Clancy said: “There is certainly a feeling in the Labour group strongly against anything that smacks of food vouchers. The Guardian article caused a great deal of concern, but we have been assured by the cabinet member that there is no possibility of an exclusivity agreement with Asda.”

Cabinet papers setting out plans for the £6 million welfare provision scheme merely refer to supermarkets and do not specify Asda.

The cabinet report states: “Crisis grants will be made for the provision of food and heating, nappkies and other essential items such as bedding and crockery. Other forms of support will be considered in exceptional circumstances.

“Payments will be made via a system of payment cards credited to the relevant value of the award. Once authorised these cards will be distributed through the city’s homeless centres and can be spent in specific supermarkets.

In his   email to Labour councillors, Cllr Cotton said: “We are determined to avoid   stigmatising those in crisis by providing vouchers or other identifiable   tokens.”

He added: “We   are engaged in talks with a wide range of retailers in order to ensure that   those in receipt of crisis grants have choice and easy access to local   outlets.

“It is   unfortunate that a number of these retailers, unlike Asda, were unable to join the scheme in time for April 1. Negotiations are continuing with a view   to encouraging them to join the scheme as soon as possible.”






In a report setting out how the welfare scheme will work, the council says it expects award about £166,000 a month in crisis grants. A one-off Government grant of £61,000 is available for set up costs, and the council will receive £1.3 million a year to cover administration.

A council spokesman said: “Contrary to media reports, many other authorities are not providing cash grants. The other Core Cities are all making use of pre-payment cards. Several are taking a loan-based approach, which we in Birmingham have firmly ruled out.

“Some councils are imposing very stringent long-term residency tests for applicants or making explicit use of vouchers or stamps.

“Several welfare changes come into effect this week, including the new Under Occupancy Rules dubbed the ‘Bedroom Tax’. Whilst we cannot as yet fully quantify the impact of these changes, we can safely assume that they will generate much increased demand for a whole range of services of last resort, including the council’s own Local Welfare Provision.

“It is for that reason that we intend to keep the operation of the new scheme under review and will be looking to make any necessary modifications in order to protect the interests of vulnerable people.”

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