Where next for local welfare schemes?

Reviewing previous performance

About the research

• Based on a freedom of information request to local authorities

• Focused on the out-turn for schemes in 2013/14 • Included questions concerning practice as well as

request for data on spend, numbers assisted, refused etc.

• Supplemented by desk based review of Scotland’s scheme, and four case studies

• Built on earlier findings from work conducted for the LGA

How many authorities?

• 69 sufficiently detailed responses to the FOI (46% of authorities)

• Financial out-turn figures supplemented by information published by Government in November 2014 – raises the sample concerning spend to 127

Context of local welfare schemes • Falling wage levels in real terms

• Cost of living increasing particularly for lower income households (food, fuel, housing, childcare)

• Welfare reforms – levels; conditionality; eligibility

• Increased use of credit (often high cost) to ‘make ends meet’ or purchase essential items leading to debt problems

• Increased numbers of people ‘going without’

• Negative welfare implications whichever ‘choice’ is made

Overall levels of provision

• 39% reduction in funding compared to 2010/11 spend on comparable elements of the Social Fund;

• Not distributed evenly – based on ‘legitimate demand’;

• Budgeting loan expenditure also reduced by 8.6% in 2013/14 - £44 million under spend that year;

• Short Term Budgeting Advances? Not known. £59 million spend on Crisis Loan alignment payments in 2011/12

Findings: Types of scheme

• Continued to focus on two elements: – Assistance with financial crisis; – Meeting ‘community care type’ needs

• But variations in the level of priority given to each: – Cumbria: central telephone service. Most calls

received in response to financial crisis; – Newcastle: specific funding allocations to each

element at year start. Budget to meet community care five times as large as for crisis needs.

Findings: types of scheme (2)

• Move away from loans and towards ‘grants’ (although not in cash);

• Boost funding for agencies providing ‘in kind support’ – e.g. Food banks, furniture recycling

• Fund support services (welfare rights, debt advice, credit unions)

• Some use of funding for other purposes - Council Tax Reduction and Discretionary Housing budgets

Financial out-turn 2013/14 • Just over half of the allocation was spent (52.8%)

in England; • 12 authorities reported spending 20% or less of

their allocations whilst 26 spent in excess of 80 percent. Median spend was 47.5%;

• Some inconsistency in reporting (not all the spend was in the form of ‘direct financial assistance’ to individuals);

• Under spends rolled forwards into subsequent year in many areas...

Variations in performance

• Not explained by levels of deprivation

• Scheme design more important:

– Publicity and promotion

– Access arrangements

– Eligibility criteria and refusal rates

– Levels of award

– Types of need reported and fulfilment mechanisms

– Approaches to meet underlying needs

Publicity and promotion

• Only one quarter of local authorities could identify how much they had spent on this

• Even then, the amounts were low (less than 1% of their administration budget)

• Publicity efforts focused on posters, websites, and awareness sessions for front-line workers

• Cumbria undertook ‘road shows’ in deprived areas of the county

• Almost universally accepted that more could have been done

Access arrangements • Different channels of delivery (and combinations of

channels) used • Highest numbers of applications where there is a

combination of on-line and phone access in place • Supported on-line also appeared to work well (and

plays to wider digital agenda) • Some authorities introduced ‘gate-keeping’

arrangements, with applications only from referring agencies. This limited application numbers but led to higher success rates

• On-line applications only resulted in very low numbers

Access: key findings

• No clear correlation between access arrangements and numbers of applications but:

– Referral only arrangements are heavily dependent on capacity being available in the ‘gateway’ organisations;

– Assisted on-line links well to the digital inclusion agenda

– Phone and in person arrangements appear very well suited to receive ‘crisis’ applications

Eligibility and refusal rates

• Distinction between enquiries and applications is not always clear

• Not all authorities had systems in place to retrieve information about refusal rates

• Based on 63 returns the average refusal rates was high (around 40%)

• Again, huge variation – just 0.4% in Suffolk (gate-kept scheme) to over 90% in Redcar and Cleveland

Eligibility rules • The authorities with high refusal rates tended to:

– Require receipt of qualifying benefits

– Limit the max number of awards to 1 or 2 in 12 months

– Place a heavy duty on people to exhaust all other alternatives (in some cases using credit)

– Require people to take out Budgeting loans or Short Term Advances

– Have residence conditions or other exclusions (e.g. immigration control)

Levels of award

• There is a trade off between eligibility rules and level of award – Crisis awards of under £20 in some areas (e.g.

Bournemouth), but around £100 in others (Greenwich) – median was £53

– Community care awards ranged from £55 (Bournemouth) to over £1000 (Newcastle) – median was £470

• Bournemouth received more applications per £1,000 of funding than any other authority and accepted over 75% of these. But it restricts the number of crisis awards to one in any 12 month period, and community care awards to one in any two year period.

Fulfilment mechanisms

• Move away from loans to non repayable awards

• Reduced use of cash

• Direct purchasing arrangements for goods

• ‘In kind’ support

Loan schemes

• Retained by only 15% of authorities • Used by some as a means of meeting crisis needs. Used to

meet community care needs by others. A few use loan schemes for both.

• Mainly operating through credit unions • Only two examples of interest being charged • Poor repayment levels (40% in Rotherham) • Needs a significant review of performance and impact of

using loans on – Applicants experience of credit unions – Ability to obtain future help (e.g. Lewisham)

• BUT – refocused loan schemes could offer a way of recycling available funds

Move away from cash

• May be over-stated as some provide for pre-paid cards which allow cash to be withdrawn at post offices

• ‘Voucher’ or card-based schemes which offer some choice and avoid stigma

• May have a ‘deterrent’ effect, but research needed as to reasons for this

• Discounts on the face value of some card schemes (7% with Tesco and Sainsburys)

Direct purchasing

• 43% of authorities using these for furniture and white goods

• Some using recycled goods • Savings due to VAT exemption and bulk

purchasing • Authorities working together may be able to

negotiate even better deals • Could provide access to these prices for a wider

group of people

Meeting underlying needs

• Wide range of ‘wraparound’ service support

• Signposting to these if people are refused assistance, but little evidence of ‘structured referral’ so little outcome information

• Some adopting a ‘mandatory approach’ – awards conditional on using support services

• Benefit delays and sanctions are the single biggest cause of crisis applications

Meeting underlying needs (2)

• Solihull – devolved element of funding to Children Services so that social workers could use this when putting together leaving care plans;

• Using for rent in advance in order to prevent or reduce homelessness or speed up take up of tenancies by purchasing essential household items

• Links between statutory duties concerning social services and the use of funds to prevent people entering into care

• However, not many authorities had aligned local welfare schemes with other forms of financial support (e.g. DHPs and S.17 payments)

Some pro-active uses

• Leicester eased cash flow problems for households with children during the summer months by targeting people who qualify for free school meals with additional support during the school holidays

• Newcastle has a back to work package to help those securing employment with travel, food and utility bills until their first pay is received. The typical package includes a Tyne & Wear travel pass for up to one month, an Asda food delivery and a gas and electric voucher

Recommendations

• Target the most vulnerable through a combination of structured referral arrangements for people with community care type needs but also have open access channels, including by phone, for people in a financial crisis

• Do not place undue restrictions on eligibility criteria and show flexibility with regard to repeat needs

• Be pro-active in anticipating when needs will arise and how these can be met. Links to employment support and introduction of Universal Credit particularly important

Recommendations (2)

• Bring sources of discretionary funding together in order to meet needs. This could also include working with charitable organisations

• Build on the good practice concerning fulfilment mechanisms, but work with other local authorities and extend the ‘offer’ to low income residents generally

• Devolve elements of funding to the front-line but evaluate how provision helps to deliver against statutory duties and reduce costs

• Reconsider the use of loan schemes, drawing on the experience to date. Consider focusing these on community care type needs and using part grant/ part loan awards