Johnstone’s View - Scottish welfare fund

This week saw the Welfare Funds (Scotland) Bill reach its stage one debate in the Scottish Parliament.

Although there is a lot of talk at the moment about the devolution of welfare powers, proposed in the report of the Smith Commission, this legislation covers welfare responsibilities which were devolved as part of the Welfare Reform Act 2012.

This Act abolished discretionary social fund payments and instead replaced them by locally administered assistance in England, while the devolved administrations in Scotland and Wales would decide the most appropriate arrangements.

This was to prevent abuse of the Social Fund system by giving greater power to local authorities.

It has been a key element of the UK Government’s agenda to devolve power and localise services where appropriate.

This approach is consistent with the policy requirements of the Social Fund as customers accessing the service are known to have complex needs which may well benefit from an integrated local approach.

For example, local authorities could identify local services applicants are accessing, allowing for a multi-agency approach or to combine the budgets with locally available funds.

In order for this to be achieved, the budget for the Social Fund was transferred to the devolved governments and local authorities in England.

In the case of Scotland, this transfer amounted to £23.8 million for programme funding.

The Scottish Government subsequently decided to top up the funding for financial years 2013/14 and 2014/15 to bring the total funding available in each of these years to £33 million.

The programme funding has been confirmed as continuing at £33 million per annum until the end of the current spending review period in 2015/16.

The UK Government also transferred funding for administration costs of just over £5 million in 2013/14, falling to just over £4.6 million in 2014/15.

Further, the UK Government also transferred a one-off amount of £2 million for set-up costs in 2012/13.

The Scottish Government has announced that the administration funding for 2014/15 will be £5 million. The administration budget for 2015/16 has not yet been decided, however, provision has been made for this within budget plans to maintain it at the same level.

In Scotland, the social fund was replaced by the Scottish Welfare Fund, which delivers two types of grants. Crisis Grants are designed to provide a safety net when someone experiences a disaster or health emergency situation, such as a fire or flood and there is an immediate threat to health and safety.

Community Care Grants will serve to enable independent living or continued independent living and prevent the need to go into care. A CCG may also be able to help a family facing exceptional pressure.

The interim Scottish Welfare Fund was aimed at supporting people on low incomes. Some of the main users of are: disabled people, lone parents, unemployed people, older people, homeless people, ex-offenders and carers.

The Welfare Funds (Scotland) Bill seeks to formalise these temporary arrangements. The interim arrangements, however, have been a steep learning curve for both the Scottish Government and the Local Authorities.

As a first step into the welfare arena, this has not been a good experience for the Scottish Government in particular.

While arguing from the start that the substantial devolved funding was not enough to cover their assessment of the level of demand, but knowing that they had the power to top-up the funding if required, they were still slow to act and as a result there was a perception of under-funding within the scheme, which prompted an over-cautious approach among local decision makers.

As a result of these early difficulties, there is firm evidence that many applicants in some key local authority areas, were turned away from the scheme, when they should have received help.

Some applicants received help in the later part of the year 2013/14 when identical applications in the earlier part of the year were refused. I have spoken to people who were refused help and referred on to food banks. Ironically then, while the Scottish Government blame ‘Welfare Reform’ for some of the short-comings in social policy, they themselves have been in control of key drivers for nearly two years already. With the Smith proposals for the further devolution of welfare now coming down the track, they will need to have their excuses ready.