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Last updated November 2015

Latest News November 2015

ACO's submission to Work and Pensions Committee Local Welfare Safety Net Inquiry, with suggested recommendations on minimum standards

The Committee is considering the interaction between the national benefits system and these locally-run schemes, and variations between different areas, both in terms of the type and level of support available and the eligibility criteria applied by different local authorities.

ACO has noted the different approaches to local welfare provision and generally welcomes the opportunity to set locally determined priorities. The model has seen the growth of more cost effective schemes offering not just material support but also an opportunity to address residents’ underlying problems.

ACO concludes that the devolving of administration and funding of local welfare support to local authorities has in some cases resulted in genuine dialogue and engagement between charitable trusts and foundations and local authority managed schemes. This has been uneven however, with some evidence of over caution in making awards and in the most extreme cases complete closure of schemes despite central government funding.

ACO members currently manage a number of and provide fulfilment support to a large number of local authority schemes around the UK. These schemes have proved that out sourcing such support services to the charitable sector can be successful.

In ACO’s view the out sourcing of provision to charitable organisations that are sympathetically minded and experienced in meeting the needs of beneficiaries in need has been successful and is an excellent example of civil society collaboration.

We fear that uncertainty over funding would lead to a loss of expertise and learning among the nascent partnerships that have been developing between the considerable range of providers now involved in local schemes. As centres of local intelligence these have ensured that support has been focused where it is most appropriate and most needed. The removal of funding will stifle this innovation and deprive local welfare provision as a whole from making the significant contribution to government priorities, including deficit reduction, we believe to be possible.

ACO would welcome the opportunity to continue dialogue with local assistance schemes in the future especially to promote innovation across schemes. We fear a lot of good preparatory work will be wasted without a clear commitment to the schemes in the form of central government spending and support.

The positive outcomes of these collaborations are particularly important in a time of austerity and rising beneficiary needs.
ACO would like to strengthen the role of its members in providing such public services and public benefit. Uncertainty about funding is destabilising individual schemes (in some cases to closure) and discouraging organisations from future tendering.

The Committee is considering the extent to which local discretion and variations in provision represent "localism in action" or in fact create a "postcode lottery", and is seeking to highlight good practice; identify where gaps in provision might exist; and suggest remedies.  ACO has concerns that the localisation of welfare provision suggests a shift away from state support to needy people without sufficient transitional arrangements and funding.

ACO wishes to protect its members and the grant making sector to individuals from possible negative consequences of funding being cut to vulnerable people. Whilst our members give an estimated annual £100 million in grants and other services to individuals in need we are concerned that these funds are in the case of the majority of our members to restricted groups of beneficiaries, those eligible for assistance from occupational benevolent funds.

We are concerned that local authorities will misuse direct referrals and signposting to our members increasing the number of ineligible applications, frustrating applicants and increasing administration costs on charities to nobody’s benefit.

We are concerned that the removal of specific funding will result in either closure or severe curtailment of many local welfare schemes, and indeed there is evidence emerging that uncertainty has already caused this to happen.

We think this would be a false economy causing vulnerable people to increase in claims on the state’s resources elsewhere, such as social services as well as increasing the numbers turning to loan sharks and pay-day lenders. 

A positive outcome of the present arrangements has been increased support and acknowledgement of the contribution by community initiatives such as food banks and credit unions to proving assistance to those in an emergency as well as tackling in-work poverty.
ACO is concerned that increased demand in other parts of the welfare system will be accompanied by considerable and unmanageable growth in applications to charities and foundations.

ACO believes that in this way; adequate funding for local welfare schemes can and should form the heart of an ‘invest to save’ model. Small sums allocated to support people in crisis or those at risk of family breakdown, deteriorating health or homelessness will save far greater expenditure when those unresolved problems become emergencies. Local authorities are increasingly embracing this idea because a good deal of the responsibility for those emergencies will fall within their existing statutory duties. However, the costs will also be felt elsewhere, in the NHS, the courts, the prison estate and other parts of the welfare system.

We believe that in the current financial climate the loss of a distinct and identifiable funding stream will mean an end to local welfare provision in a large number of cases. The LGA report, ‘Delivering Local Welfare: How councils are meeting local crisis and community care needs’ (September 2014) demonstrated that three-quarters of local authorities will discontinue or severely reduce schemes without the further allocation of funds. Many local authorities will only be able to operate skeleton schemes after which, reserves will be exhausted and services will cease.

Part of the rationale for localising the discretionary elements of the Social Fund was that under the old system, resources were thought to be poorly focused and in particular, were failing to meet the need of the most vulnerable people in our society. A brief glance through the case studies now in the public domain; reports from London Councils and the LGA; and the DWP’s recent review, demonstrate a substantial focus on many of the groups relevant for this discussion. Where monitoring returns are available they consistently demonstrate a considerable overrepresentation of women, the elderly and people with disabilities for example among the users of local welfare schemes. Many schemes specifically focus support on victims of domestic violence or hate crime where there is an obvious correlation with equalities.

Minimum Standards: a recommendation

A particular set of problems were anticipated by ACO around different approaches that might be adopted by local authorities and for this reason we argue for minimum standards.

ACO would like to see basic safeguards that should be common to all local welfare assistance schemes and suggests minimum standards which would allow the development of tailored localised provision whilst mitigating the risk of a post-code lottery of provision.

The standard every local welfare assistance scheme should adopt:

  1. Clarity: A designated and identifiable budget
  2. Transparency: All local schemes should have clear criteria and provide details of grounds of refusal to unsuccessful applicants. There must be an appellate/review process
  3. Universal access: financial support should be available to residents and as a minimum should incorporate all of the qualifying benefits of current social fund scheme
  4. Flexibility: there should be a cash/voucher element to alleviate immediate hardship to replace the crisis loan system
  5. Parity: any local scheme should not contribute to debt through imposing interest charges upon essential items that would have been subject to a grant previously
  6. Connectivity: Financial assistance should be linked to other localised support and assistance.