As part of the government’s overhaul of the benefit system, which came into effect at the beginning of this month, the Social Fund has been scrapped. This is a worrying development for us here at the NextDoor Project. Most of the clients for whom we find accommodation have no savings of their own and landlords invariably require one month’s rent in advance, which we have usually be able to obtain on their behalf from the Social Fund in the form of a Crisis Loan payment.
Elements of the old social fund, such as budgeting loans, will continue to be administered by the DWP, but crisis loans are now part of a bundle of responsibilities which have been devolved to local authorities. Obtaining crisis loan money from the old Social Fund was never easy, with call centers staffed by humans delivering remarkably convincing impersonations of robots. These generally pusillanimous creatures were clearly instructed to find any reason, however spurious, to reject an application. One particularly egregious example being when a rough sleeper who I had found a studio flat for was refused a loan on the grounds that “He has been sleeping rough for eight months, which means that he is coping very well with his situation, and is therefore not in a crisis ”. A piece of twisted logic worthy of the original Catch 22.
Accessing a Crisis Loan under the old system may have been difficult, but at least one was dealing with one centralised system and one set of rules, however obtuse. Over time I had become something of an expert at navigating my way through all obstacles and of late successful applications were becoming the norm, not the exception. Now we are dealing with up to thirty-two London Local Authority’s, each with its own set of criteria and some seemingly without any coherent policy at all.
Even where councils, such as Kennsington and Chelsea (in consort with Westminster and Hammersmith & Fulham under the new tri-borough administrative arrangements), have got a system in place it is embryonic and there are teething problems and delays. We have been successful in accessing a payment from Westminster, which is apparently the first under the new system, but because the payment mechanism is not in place yet Z2K has had to bridge the payment, in order for our client to be placed.
I have even been told by one London borough that they will not be giving cash payments at all but food vouchers, which at the very least shows a total misunderstanding of the needs of the people for whom this money is intended. Many other boroughs are insisting on a local connection before they will consider an application.
The only good thing that can be said about the new system is that when money is given it is in the form of a grant, unlike the old social fund, which was a loan, and over time it is to be hoped that councils will evolve better systems, and a greater understanding of the needs of their clients. At the moment however, like so much of the governments wholesale changes to the benefit system, these changes are creating confusion and anxiety, with many unintended consequences and an overall impression that they have not been properly thought through.