Ministers urged to abolish Social Fund 'lottery'

THE SOCIAL Fund was condemned yesterday as a lottery with hardly any prizes, and the Child Poverty Action Group called for its abolition after the Government published a highly-critical report on the scheme.

Peter Lilley, Secretary of State for Social Security, said in a preface to his annual report on the pounds 361m fund that it continued to provide 'valuable help' to large numbers of people. 'In the past year, both the amount and number of Social Fund payments have increased, and they have been delivered faster than before.'

But his report coincided with an in-depth examination of the four-year-old scheme, Evaluating the Social Fund, commissioned by the Department of Social Security from the University of York. That said: 'After careful examination of the available evidence, we cannot say that people who receive Social Fund awards are in greater general need than those who are refused . . . nor can we conclude that the Social Fund is meeting its objective 'to concentrate attention and help on those applicants facing greatest difficulties in managing on their income'.'

Critics were unhappy that the reports were issued on the same day as the White Paper on health and that Nicholas Scott, Minister of State for Social Security, had said yesterday that the research work would require 'careful study', even though the department had had it since March.

The report found that only 15 per cent of fund applications resulted in grants, while 45 per cent led to a loan. Almost 70 per cent of loan recipients said repayments left them with insufficient money to live on, more than a third said they had to cut back on food, clothing, or paying other bills; and a fifth were forced to borrow from other sources - including commercial moneylenders - to make up reduced benefit income.

Fran Bennett, director of the Child Poverty Action Group, said: 'We always knew the Social Fund was a lottery. This report proves it is a lottery with hardly any prizes. Recycling claimants' benefit through loans puts severe pressure on already-stretched budgets.

'What more evidence does the Government need? The Social Fund is the biggest disaster since the poll tax, and should be courageously abolished in exactly the same way, to be replaced by a scheme of grants as of right for those who need them.'

However, Mr Scott said he was pleased 'that the findings confirm the message of the Secretary of State's annual report, that the fund has provided cash assistance for exceptional needs to millions of people; and also recognises the excellent job being performed by Social Fund officers'.

The York study concluded: 'The challenge for the future is to continue to search for a realistic, manageable and fundable policy which will meet the needs of vulnerable people in a timely, efficient and just manner.'

Evaluating the Social Fund, by Meg Huby and Gill Dix. DSS Research Report 9; pounds 22. Working the Social Fund, by Robert Walker, Gill Dix and Meg Huby. DSS Research report 8; pounds 9; both HMSO.

Annual Report, Social Fund, 1991-92. Cm. 1992; pounds 9.75. Annual report of the Social Fund Commissioner, 1991-92; pounds 7.20; HMSO.