CPAG in Scotland response to the Scottish Government consultation on the Welfare Funds (Scotland) Bill

Response to the Welfare Funds (Scotland) Bill

  • Child Poverty Action Group (CPAG) in Scotland welcomes the Welfare Funds (Scotland) Bill and the fact that it will give the Scottish welfare fund legislative underpinning. As a UK wide organisation CPAG is keenly aware of the difficulties and hardship arising in England, where control over replacement social fund provision has been devolved to local level without ring fencing of resources or a national framework, resulting in muchinconsistency, fragmentation and uncertainty. By legislating for a national framework the Scottish Government has the opportunity to establish a welfare fund which is transparent, accountable and accessible to the people of Scotland.
  • CPAG also welcomes the Scottish Government’s willingness to date to work with third sector partners in the development and implementation of the Bill and existing guidance on the Scottish welfare fund. The Government’s collaborative and transparent approach will hopefully continue to contribute to the development of a Scottish welfare fund which is workable and effective in practice.
  • CPAGalso welcomes the Scottish Government’s investment in the Scottish welfare fund[i]. The fund provides an important means of mitigating some of the worst effects of ongoing changes to the UK tax and social security system. By increasing investment and ensuring that it is accessible and sufficient, the Scottish Government could prevent many vulnerable households from reaching crisis point and being forced to rely on costly public services such as residential care, homelessness services and the NHS.

Question 1: Does the bill as drafted contain the elements you would expect it to contain? Are there elements you would add or take out of the bill?
1. In order to ensure that the Scottish welfare fund (SWF) is sufficient to meet demand it is essential that funds are clearly ring-fenced. While section 1 of the Welfare Funds (Scotland) Bill will allow the funding for the Scottish welfare fund to be ring-fenced, it does not oblige the Scottish Government or COSLA to do so. Given the increasing pressure on the SWF and wider local authority resources over the coming years (largely as a result of tax and social security reforms at UK level) we do not believe this provision is strong enough.

2. CPAGalso believes that section 1 of the bill should make reference to the overall purpose of the fund. The preceding UK social fund directions, for instance, started with an explanation that, ‘The Social Fund is a scheme to help people with needs which are difficult to meet from regular income.[ii]’ Including the overarching purpose of the scheme in legislation would help to ensure that subsequent provisions, regulation and guidance are interpreted with this objective in mind by local authorities. We would therefore suggest that section 1 is amended to include a statement to the effect that the purpose of each welfare fund is to help those individuals requiring assistance to live independently or maintain a stable home or way of life.

Eligibility
3.CPAG in Scotland iskeen to ensure that the purpose of the scheme as laid out in the draft bill does not exclude individuals with a real and legitimate need for assistance from their local authority. Local authorities must be given adequate scope to react to changing circumstances and demands.

4. Several sections of the bill raise concerns in this respect. Section 2(a), for instance, relates to short term grants to meet an immediate need (‘crisis grants’). Section 2(a)(1) specifies that in order to qualify for a crisis grant, the individual’s need must arise out of ‘an exceptional event or exceptional circumstances’. This is very different from the current Scottish welfare fund guidance which makes it clear that crisis grants can be made available to those whose need arises as a result of an ‘emergency’ or a ‘disaster’[iii].
5. While the current drafting of the bill could potentially make crisis grants accessible to many applicants who are currently ineligible, it could also exclude many individuals and families. Experiencing extreme financial pressure as a result of being refused a short term benefit advance, for instance, is increasingly unexceptional, though it could easily constitute an emergency for many families. Similarly, losing a wallet or handbag is by no means exceptional but, again, could be classed as an emergency for a parent who urgently needs to buy milk or nappies for a new baby.
6. CPAG therefore propose that section 2(a)(ii) should be widened to include need that arises as a result of “an exceptional event, exceptional circumstances or an emergency or disaster”
7. There is also a need to reconsider section 2(1)(b) and 2(2) which relate to community care grants. Paragraph 3.4 of the Scottish Government’s guidance on the Scottish welfare fund currently states that, “A grant can be awarded in support of independent living…to help families facing exceptional pressures.”

8. Examples of exceptional pressures listed in the guidance include meeting the needs of a child where the need arises out of chronic illness, accident or disability or where there is a serious problem with accommodationresulting in the applicant needing to move home.

9. The draft legislation does not currently make provision for applicants in this category. CPAG therefore suggests that a third category should be added under article 2(2) to include amongst qualifying persons (currently limited to those facing or leaving prison, hospital, residential care or homelessness) those who might otherwise be ‘experiencing exceptional pressure’.

10. Furthermore, section2(1)(b) of the Bill should be extended to ensure that the fund can be accessed not only by households who need assistance to establish or maintain a settled home, but also those who need assistance to establish or maintain a settled ‘way of life’.

11. While such a provision could be qualified by subsequent regulations and guidance, it would ensure that applicants who currently qualify for community care grants are not excluded from the fund.
12. The experience of exceptional pressure is likely to become increasingly common as the cost of living continues to rise faster than household income. Research conducted by CPAG shows thatthe minimum necessary cost of raising a child rose by 4 per cent in 2013, while the minimum wage rose by only 1.8 per cent. In the same period average earnings rose by only 1.5 per cent, benefits for families and children by just 1 per cent, and child benefit did not rise at all[iv]. It is likely that an increasing proportion of families will, therefore, need help to feed and clothe their children and to maintain a stable way of life. Enabling the Scottish welfare fund to assist these families would allow it to operate more effectively, preventing many households from reaching crisis point and being forced to rely on costly public services such as social care, homelessness services and the NHS.

Provision of grants rather than loans
13.It is clear from current guidance relating to the SWF that the Scottish Government intends for assistance to be provided by way of grants instead of loans[v]. CPAG in Scotland believes that the Welfare Funds (Scotland) Bill should state clearly that where an award is made under the scheme no repayment of awards can be required.

Method of delivery of the fund
14.CPAG accept that in certain limited circumstances it may be more appropriate for assistance to be given in kind rather than by way of a cash payment. We also accept that, occasionally, it may be appropriate for that assistance to be provided by an organisation other than the local authority.We are, however extremely concerned by the broad scope whichsection 2(3) gives local authorities to pay third parties to provide goods or services ‘to or in respect of an individual’.

15. There is a need to ensure that such an arrangement is only utilised where it is appropriate for the applicant and where it allows the needs identified in their application to be met.In deciding on the appropriateness of such a referral the local authority should consider:

(a) Appropriateness of the third party
Local authorities must consider the consequences of their choice of delivery agent both in the short and long term. For example food banks are entirely inappropriate as a mechanism to deliver SWF awards. Whilst they play an important partin the emergency voluntary response to current economic hardship and UK social security policy, food banks inevitably limit the choice available to applicants, create stigma,undermine dignity and lead people to feel they are receiving hand outs rather than exercising a legitimate right to assistance .They have no place in the delivery of statutory welfare assistance, other than as a potential avenue for last resort referral if there is no eligibility for support from public funds.
(b) Practical concerns
Wherean applicant is disabled and unable to travel s/he should not be referred to a third party that is difficult or expensive to reach. Similarly s/he should not be allocated goods which may be unsuitable as a result of her/his disability or health condition.

(c) Cost involvedfor applicant
Local authoritiesmust ensure that where provision by a third party will result in additional costs for the applicant, these costs are reflected in the level of award. The costs involved in travelling to another location to pick up goods, for instance, should be covered by the award.

(d) Adequacy of award
Local authorities must be sure that the relevant third party is in a position to meet the needs identified by the local authority. Inquiries to CPAG’sadvice line have highlighted several instances in which goods or services provided by third parties have been inadequate.

‘I helped a tenant to apply for a number of items from the Scottish welfare fund. They have been awarded a small amount of money for basic household items which will be given to them in the form of Asda vouchers. I have emailed the SWF staff member back and said that the sum they have awarded for the Asda items is too little and they are unlikely to get what they need for the award.’(April 2013)

(e)Delays in delivery
Referral to third parties can also result in delays. This is clearly unacceptable in crisis situations where the award is needed urgently. This was illustrated by an inquiry to our advice line;

‘I have a tenant who was in privately rented accommodation was then offered a house with ourselves [a Registered Social Landlord] on the 15th October 2013. She applied that day for to the SWF and had a positive decision within the time limits. However, that was 3 weeks ago and she still hasn’t received the items to enable her to move in. The housing benefit team were made aware of this and said the tenant wasn’t entitled to HB because she hadn’t moved in. The Scottish welfare fund team are clearly stating that this delay is due to the suppliers and not the fault of the tenant.’(November 2013)

16. For the reasons above, CPAG in Scotland suggests that section 2(3) which currently gives local authorities wide powers to refer to a third party, be replaced with the following provisions.

“(3) Except in such circumstances as may be prescribed in regulations, a local authority must exercise its power under subsection (1) by providing financial assistance to the applicant.”

17. As is specified in more detail in paragraph 27(b) below, regulations might state that referral should only be made to a third party where it is a proportionate means of achieving one of the legitimate aim specified in the regulations. This would ensure that local authorities give full and proper consideration to how appropriate it is to make a referral.

18. A new section 2(4) should also specify that referral to food banks is prohibitedas a means of delivering Scottish welfare fund assistance in all circumstances.

Duty to accept and record applications to the Scottish welfare fund

19. The legislation should include a duty on local authorities to accept, process and record allapplications made to their welfare fund.

20. Under the current scheme many local authorities appear to be fettering their own discretion by refusing to accept, process or record certain applications. In some cases applications are not accepted because the decision maker deems them unlikely to succeed under the terms of the Scottish welfare fund guidance. In other cases local authorities appear to have developed internal practices or policies which exclude applications from certain groups. This not only prevents in-depth consideration of their situation, it also prevents the applicant from being able to request a review of the decision. Examples received through CPAG’s advice service include the following:

‘Two clients from the travelling community were refused short term benefits advance whilst awaiting the processing of their jobseeker’s allowanceclaims. They were referred to the Scottish welfare fund for a crisis grant. The local authority refused to accept the application as the individuals were 'not council tax payers, so the local authority couldn’t confirm that they live within the local authorities boundaries'(January 2014)

‘One particular local authority is insisting that some extremely vulnerable claimants go through the lengthy process of applying for a budgeting loan before they will accept an application. In one case the local authority stalled a decision for a community care grant while awaiting the outcome of a budgeting loan which they had instructed the applicant to make. This claimant is a single parent on income support with 2 small kids (aged 7 &2) this is her first tenancy as she has been supported by her parents up until now. She is very ill with various illnesses; the latest worry is a suspected brain tumour. She has no other means of income and needs everything to set up a home for herself and her 2 young daughters.’(September 2013)

Advisors have also told us about very recent cases in which applications have been rejected on the basis that the individual concerned had made an application to the fund in the preceding 28 days.The local authority did not ask whether there had been a change of circumstances in the previous 28 days, but rather rejected the application out of hand. (January 2014).

‘I had one client who was a woman with advanced HIV who didn’t want to disclose her medical history at the initial stage of application. Eventually I had to take the phone outside, away from my client’sdaughter, and explain exactly why the worker had to take the application. Up until that point he had been refusing to allow an application to be made because he didn’t think the woman met the local authority’s criteria.’(September 2013)

21. In order to ensure all applications are accepted and recorded we would urge the Scottish Government to include in the Bill a provision stating that,

“Except in such cases as may be prescribed by regulations, a local authority shall not refuse to accept, consider and record an application to its welfare fund.”

22. Such a provision will not only prevent local authorities from fettering their discretion (contrary to the legal principles governing public decision making) it will also allow the Scottish Government to collect accurate and comparable data about levels of demand for assistance across Scotland.

Communicating decisions
23.The Welfare Funds (Scotland) Bill should include a duty on local authorities to provide written decisions in response to all applications to the welfare fund (unless the applicant has requested decisions in an alternative format). The content of the decision letter might be clarified through regulations (see para 27(c) below).

24. The timely provision of such information is not only necessary to satisfy the demands of natural justice, is also essential if the applicant is to be given a meaningful opportunity to challenge either the local authority’s decision or the adequacy/appropriateness of any goods provided by a third party. Information received through CPAG’s advice line suggests that in many cases applicants are not being informed in writing about the local authority’s decision. This appears to be particularly common where the decision is positive. One inquirer to our advice service told us that:

‘There is no decision letter given if application is successful. There is only a letter if it’s a ‘No, you are not getting anything’ letter. This creates several problems; you have to then call the phone line to get the date of decision if client wants to make a review. Also,you have no list of things that were awarded etc. so again you have to call up and clarify what the person is getting. In one of my applications I asked for 30 items for a client and only 6 items have been given. Therefore, I will want to appeal but have nothing in writing.’(May 2013)

Mechanisms for appeal / review

25. CPAG are extremely concerned about section 3 of the Bill which relates of review of decisions. The sections states that ‘A local authority must make arrangements under which decisions it makes in pursuance of section 2 may be reviewed.’

26. Such a provision does not allow scope for second tier review to be performed by a body external to the local authority (such as the Scottish Public Services Ombudsman). Furthermore, it allows local authorities a great deal of discretion as to which decisions are subject to review, on what grounds and within what timescales.