Assistant Mayor for Adult Services and Services for Older People

Part 1 / ITEM NO.

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REPORT OF

Assistant Mayor for Adult Services and Services for Older People

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TO

The City Mayor

ON

15 April 2013(For Briefing)

And

22 April 2013 (For Decision)

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TITLE:Development of the Salford Discretionary Support Scheme - A Local Welfare Provision Scheme to Replace the Social Fund

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RECOMMENDATION:

For the City Mayor:

• To approve the proposal to develop the Salford Discretionary Support Scheme (SDSS), a local scheme to replace the Social Fund currently administered by Department for Work & Pensions
• To approve the proposed local scheme for Salford – the Salford Discretionary Support Scheme
• To approve the discretionary nature of the scheme with no formal right of appeal for applicants
• To note the proposed scheme design of the Support Fund for those negatively affected by recent Council Tax benefit changes and other current changes through welfare reform
• To approve further work to take place on engagement with voluntary sector partners in the management and delivery of the scheme
• To approve the scheme design for 2013/14 only, and the explicit commitment to identify commissioning options for scheme for approval by September 2013
• To approve the development of a commissioning framework to identify alternative delivery models and partners
• To approve the commissioning of an ICT support module from Northgate to support delivery and administration of the scheme

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EXECUTIVE SUMMARY:

The Welfare Reform Act 2011 proposes to transfer responsibility for delivery of the Social Fund from Department for Work & Pensions to local authorities. The Social Fund consists of a number of elements which support vulnerable people to meet their urgent and immediate needs and to enable them to be resettled in the community. In 2011/12, 13, 390 separate applications for the fund were made by Salford residents, with £1, 351, 300 being awarded to ease the hardship of poor and vulnerable households. In 2010/11, £2, 150, 000 was awarded to Salford households through 18, 670 applications to the fund.

The government has chosen to cap the amount awarded to each local authority at 2005/06 levels of expenditure, when access to the DWP scheme was extended to telephone applicants. The award for Salford will be £1, 185, 232, a reduction of 13% on the current level of expenditure, andonly 55% of the expenditure in 2010/11.

Administration of the scheme would be funded through an administrative funding grant provided to the City Council by central government. In 2013/14, this would be a fund of £250, 448, reducing to £229, 563 in 2014/15. All funding awards have been confirmed for 2 years only, with future funding allocations dependent on central government future decisions.

It is proposed to develop a replacement scheme to continue to assist vulnerable households from April 2013. In 2013/14, this would follow the general outlines of the existing scheme. However, the scheme would be as cashless as possible to protect the diminished funding stream and ensure that the fund was spent on necessary items, given increases in demand and need in the city.

The scheme would complement but not replace existing support schemes for vulnerable households such as Discretionary Housing Payments, Children’s Services s.17 payments and Homelessness Prevention funding, to ensure that responses to reduce duplication and maximise the benefit of every pound spent on relieving hardship in the city.

In 2013/14, the Scheme would be administered by a co-located single Assessment Team, based in the Community Health & Social Care Directorate to deliver a co-ordinated and systematic response to the needs of vulnerable people and to take advantage of existing facilities to make awards and supply goods and support services.

The proposed scheme is intended to operate for 1 year only. A review of the existing scheme will take place by September 2013 and will identify alternative options for the delivery of a revised scheme from 2014/15 and beyond. This will include options for delivery by partners and 3rd sector agencies.

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BACKGROUND DOCUMENTS:

(Available for public inspection)

None

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KEY DECISION:

Yes.

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DETAILS:

1.0Background and Context

1.1In March 2012, the Welfare Reform Act received Royal assent. The Act confirmed the government’s intentions to substantially reform the welfare benefits system, including the introduction of a single Universal Credit to replace a range of existing benefits. Included within the proposals was reform of the Discretionary Social Fund which is currently administered by the Department for Work and Pensions (DWP). This is to be replaced with a scheme of discretionary local provision, with some elements of the existing Social Fund administered by local authorities from April 2013.

1.2The elements of the scheme which will be administered by local authorities will be:

• Crisis Loan payments
• Community Care Grants

1.3Under the current DWP scheme, Crisis Loans are to meet immediate needs such as general living expenses or items needed following a disaster and entitlement is not dependent upon receipt of a benefit. Community Care Grants (CCG’s) are non-repayable grants to enable vulnerable customers to live in the community and are conditional upon receipt of an income related benefit.

1.4The Government has stated that it believes the service is better delivered locally and this will empower local communities to better identify and meet the needs of the most vulnerable. However, there is no requirement to replicate the design of the existing scheme.

1.5The government has fixed the funding settlement for local authorities at 2005/06 expenditure levels. With the economic downturn and continuing increases in poverty and hardship, applications to the Social Fund have increased significantly since 2005/06, as indicated in the table below:

2005/06 / 2010/11 / 2011/12 / Change
05/06-11/12
1. All Crisis Loans
Applications / 2, 930 / 14, 620 / 9, 690 / +230%
Expenditure (£) / 380, 000 / 1, 198, 200 / 444, 400 / +17%
Number of Awards / 2, 550 / 11, 210 / 7, 490 / +193%
Success Rate / 87% / 77% / 77% / -10%
2. Community Care Grants
Applications / 3, 520 / 4, 050 / 3, 700 / +5%
Expenditure (£) / 919, 000 / 951, 800 / 906, 300 / -1%
Number of Awards / 2, 040 / 1, 990 / 1, 840 / -10%
Success Rate / 58% / 44% / 50% / -8%
3. Overall Totals
Applications / 6, 980 / 18, 670 / 13, 390 / +92%
Expenditure (£) / 1, 299, 000 / 2, 150, 000 / 1, 351, 300 / +4%
Number of Awards / 4, 590 / 13, 200 / 9, 330 / +104%

1.6There has been a significant increase in applications and expenditure within the Social Fund during this period. The reduction of applications in 2011/12 is a national trend which is linked to changes in the administration of the fund by DWP, and is not expected to be a recurrent phenomenon. This overall upward trend is likely to continue given the pressure on household budgets. The significant reduction in the funding being transferred to the City Council makes the design of a local response even more difficult, with a requirement for greater targeting and the capacity for there to be greater levels of unmet need.

1.7The scheme primarily supports single, younger people. Approximately 80% of awards are made to single people, including single parents. 65% of awards are made to households without children. 58% of awards are made to people aged under-35, who may also be likely to be affected by recent changes to Local Housing Allowance.

1.8Funding levels have been confirmed for the next two years. There is no uplift for inflation in 2014/15, and no indication has been made of likely future allocations. Central government is proposing to allocate the following to Salford City Council:

Programme Funding
(£) / Administrative Funding
(£)
2013/14 / 1, 185, 232 / 250, 448
2014/15 / 1, 185, 232 / 229, 563

2.0The Current Position

2.1The current Social Fund scheme has been in place since 1988. It delivers a response to financial hardship in terms of providing a safety net for households who require emergency support.

2.2The existing scheme is also cash-limited, and the financial position of the fund can be an element in the decision-making process. This can lead to a perceived lack of consistency in decision-making, with seemingly similar claims receiving different awards depending on the remaining funding available.

2.3At present, DWP administers all elements of Social Fund provision. In addition to the elements transferring to local authorities, the following elements will continue to be delivered by DWP:

• Alignment payments (made when benefit processing delays claims being paid)
• Budgeting Loans (made for non-immediately-essential items which it is hard to budget for from low incomes)

2.4The retention by DWP of some elements of the current provision creates the potential for fragmentation of the safety net for vulnerable households and households experiencing poverty and hardship. It also raises the prospect of support for households not being aligned most efficiently. There is little scope for data sharing between DWP and the council due to data protection issues.

2.5The tables in 1.5, above, outline the levels of demand for each of the elements which will transfer to SCC in April. The greatest demand within the 13, 390 applications for assistance in 2011/12 are for short-term, crisis interventions. Allowing for speculative applications where no needs are identified, this highlights the level of day-to-day financial hardship within the city and the critical role that the existing Social Fund safety net plays in supporting household finances in Salford.

2.6It should be noted that under the current scheme, claimants can make 3 applications in a 12-month period of Crisis Loan elements. Therefore, the number of applications is not the same as the number of applicants.

2.7DWP will continue to take responsibility for its existing commitments in terms of loans, and will continue to collect payments on these from claimants. This will sit alongside the local response from local authorities.

3.0Salford’s Proposed Response

3.1To ensure the continuing delivery of financial support to vulnerable households, it is proposed to replace the existing elements of the Social Fund with a revised scheme, called the Salford Discretionary Support Scheme (SDSS). The Scheme will form part of the Council’s response to supporting people through the welfare reform changes to mitigate the effects on vulnerable people and to support those in greatest need.

3.2The proposed scheme design is detailed in Annex 1. However, the principles of the scheme and its key features are detailed below:

3.3Key delivery principles are set out below for the 2013/14 scheme. These will be revised during the scheme review:

-SDSS to be a last resort safety net in cases of extreme hardship, and may complement, but not replace existing sources of support

-Limited funding means that tighter eligibility criteria are required

-The scheme will seek to deliver both an immediate response to extreme hardship and managed support for vulnerable households to enable them to establish themselves in the community independently

-Support should be targeted and prioritised on the basis of need

-Cash payments will be limited, and awards be delivered in goods wherever possible

-The scheme should support the work of voluntary sector agencies in combatting local hardship

-Access routes into the scheme should be as wide as possible, balancing the need to manage supply and demand

-The scheme should be open to low-income households and not simply those on benefits

-The initial scheme will be an award-based scheme, but is expected to move to a loans-based scheme within the first 12 months

3.4The Salford Discretionary Support Scheme is proposed to consist of two separate Programmes, which reflect but do not replicate the current make-up of the Social Fund scheme. These are:

-Immediate Emergency Assistance Programme (IEA)

-Resettlement Grants Programme (RG)

3.5The Immediate Emergency Assistance Programme is intended to meet immediate emergency needs basedaround ‘safe, warm and well’ criteria such as lack of essential food, lack of heating or households who have experienced a recent emergency or disaster.

3.6The Resettlement Grant Programme is intended to support the longer-term resettlement of vulnerable people and enable them to establish themselves successfully in the community, promoting their independence. This Programme is likely to focus on the supply of white goods and essential items of furniture.

3.7The types of practical assistance which will be offered under each Programme are outlined in paragraph 9.5 of the Scheme Design document contained in Annex 1.

3.8Given the funding constraints within the scheme, it is highly likely that awards for assistance under either Programme will be targeted at households containing vulnerable people, including younger children, older people and people with health needs, and these households will be prioritised within the assessment process.

3.9To further ensure efficient management of the fund, and to reinforce the need for households to effective management of their finances, it will be necessary to limit the number of applications which each household can make. It is proposed that each household can make two applications for assistance from the Immediate Emergency Assistance Programme in any 12-month period. Consideration may be given to a third application, but any award would require authorisation from the scheme manager and would be subject to additional conditions, such as engagement with advice agencies. Households would be limited to a single application from the Resettlement Grant Programme in any 24-month period.

3.10All Greater Manchester authorities are adopting a scheme and Salford’s scheme is broadly in line with other proposed schemes across AGMA. All local authorities face the same proportionate reduction in resources, and all have adopted stricter eligibility and access criteria, for instance.

4.0Scheme Review

4.1The proposed scheme is intended to operate for up to 1 year, to 31 March 2014 at the latest. As the scheme is wholly new, it is accepted that changes will be required to the operation and management of the scheme. Therefore, it is proposed to explicitly commit to a scheme review by the end of September 2013.

4.2The scheme review will include explicit consideration of alternative delivery models. It is the Council’s intention to seek partners to deliver this scheme in future years, and explicit support from the voluntary sector will be sought in both designing the future scheme and in administering future delivery models.

4.3The review will be considered by Members and will include the following elements:

• Operational assessment of the existing scheme
• Options for future commissioning models, including outsourcing of the whole scheme or elements of it
• Sub-regional and cross-boundary delivery options, including AGMA-wide potential
• Recommendations as to the future delivery model
• Consideration of how the scheme can support voluntary sector partners

4.4During 2013/14, the operational elements of the scheme will be subject to regular review by a corporate officer group to ensure that it continues to meet the most pressing needs in the city for the most vulnerable people.

5.0Scheme Design

5.1The proposed scheme design is recommended for 2013/14. The detailed scheme design is contained in Annex 1. The key delivery principle of the scheme is that it supports the direction of travel of the proposed changes to the Welfare Rights and Debt Advice delivery model, as part of a whole-system approach to addressing the needs of vulnerable people and those in poverty. However, the key features of, and rationale behind, the proposed Salford Discretionary Support Scheme are outlined below.

5.1.1In recommending the scheme design, an officer group has investigated a number of delivery options, including outsourcing and has benchmarked with AGMA colleagues. At present, it is recommended that the risk to the Council of immediately outsourcing this scheme would be too great given that the scheme is wholly new, and could potentially lead to missing out on future options such as a wider AGMA solution or delivery model, which can be investigated further during 2013/14. However, the option remains to identify re-commissioning options through the scheme review process.

5.2Accessibility

5.2.1In managing increasing demand with a reduced budget, access routes into the scheme are critical. It is recognised that for the client group who would expect to access the Social Fund, access to the internet may be limited and that customer expectations tend away from web-based transactions. Therefore, from April it is proposed to maintain wide access points for the scheme in order not to further disadvantage this client group.

5.2.2Access will be enabled through telephony, web and in-person through the Salford Housing Options Point at the Opportunities Centre. However, it is proposed to review these arrangements given concerns over the potential for demand to outstrip the available budget.

5.2.3Many existing service users of the Social Fund are supported in this process by services for vulnerable people provided by the City Council. The proposed delivery framework and access routes into the scheme complement the model developed through the review of Welfare Rights & Debt Advice services, and the further integration with Housing Options services, creating a single offer for vulnerable people in need.

5.2.4A number of delivery elements for this scheme already exist within the services based at the Opportunities Centre, including Support Workers, Furnished Homes, Finance Officers and existing facilities to store and distribute goods, vouchers and cash. The ‘no wrong front door approach’ will be supported by co-location with these services of the SDSS Assessment Team to facilitate a whole-system approach to dealing with vulnerable people and a clearer and more integrated customer journey.

5.3Eligibility

5.3.1In common with all local authorities, it is intended to adopt eligibility criteria for access to the scheme in Salford. To be eligible, households must have a clear and verifiable local connection to Salford, assessed using the homelessness legislation criteria, be in need and be a low income household in crisis. The current scheme is only open to households who are in receipt of qualifying benefits, whereas the proposed scheme in Salford extends eligibility to low income working households, enabling support to be provided on the basis of need and not on benefit entitlement.Low income is defined as 60% of median earnings, which is the commonly used definition of family poverty.

5.3.2A condition of eligibility for the fund will be that applicants must not have access to savings adequate to cover their immediate need or any other sources of funding.

5.4Resources, Assessment and Decision-making

5.4.1It is essential that the Scheme is managed transparently, with consistent decision-making and prioritisation of cases of the most extreme hardship. In common with most local authorities, it is proposed to create a co-located SDSS Assessment Team to manage all applications to the scheme. This would ensure consistency in application of the scheme.

5.4.2Critical to the success and effectiveness of the scheme is the ability to manage complex assessments of the needs of vulnerable people, including issues of safeguarding. It is proposed that the Assessment Team be based within the Community, Health & Social Care Directorate. This will maintain the link with vulnerable households and also enable co-ordinatedapproaches to the Resettlement Grants Programme, where debt advice, rehousing and support are facilitated by services within this Directorate.