Poor Relief or Poor Deal?

The Social Fund, Safety Nets and Social Security

Trevor Buck, Roger S. Smith, Roger S. Smith

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351910125
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Social Policy
• Index: Politics & International Relations

The social fund has been a controversial instrument of social policy in the UK since its introduction in 1988. This book brings together new research and debate on the role and effect of the social fund in relieving poverty, and introduces evidence from the wider European field to allow comparison to be made with other countries' experience of providing a 'safety net' for their poorest citizens. This book opens up for wider discussion the question of how to provide help for disadvantaged groups and individuals at times of financial crisis. Addressing practical questions about how such schemes work (or fail to work) effectively, the book also provides the basis for more general consideration of the overall objectives which they are expected to meet. This will contribute to new thinking about the policy goals of the social fund and other emergency payment schemes, and their role in meeting broader aspirations such as cohesion, inclusion and social justice.

PART I
THE HISTORICAL AND POLITICAL
CONTEXT

Chapter 1

Lump Sum and Emergency Payments:
A Brief History

Gary Craig

Historical Context

The social fund emerged in 1988 as a result of the provisions of the 1986 Social Security Act. However, prior to 1988 there had been several national one-off payments schemes in the UK managed by government and it was the consistently troubling issues raised by the operation of these schemes that the social fund was intended to address. This Chapter therefore sets the scene for the book by reviewing the experience of these earlier schemes and identifying the key issues which government hoped to solve with the introduction of the social fund. In particular, the Chapter will examine the experience of the two most recently preceding schemes, the Exceptional Needs Payments (ENP) scheme of the Supplementary Benefits Commission (SBC) (1966-1980) and the Single Payments (SP) scheme of 1980-88.

Prior to 1934, supplementary help to those who were financially destitute had been the responsibility of local authorities broadly under the provisions of the 1834 Poor Law Amendment Act, which itself had been introduced to rationalise and align a wide range of local ‘parish’ provision. The 1834 Act had been intended to limit the scope of such help and to make dependence on it as unattractive as possible, with the threat of incarceration in the gloomy and oppressive Victorian workhouses an ultimate threat against those who, government claimed, would not work or support themselves. Throughout the late nineteenth century and into the early part of the twentieth century, claimants for help were increasingly classified, by age, gender, disability and so on but the central form of classification was that of deserts: ‘deserving’ claimants such as widows might escape the workhouse, undeserving ones (such as the unemployed) were less likely to (Craig, 1992a). However, a major problem for the state was the variability with which local authorities interpreted its provisions: some left-leaning local authorities manipulated its terms to provide relatively generous levels of help to the poor; and during the 1920s, at a time of considerably widespread hardship as a result of economic depression, this led to confrontation between local government and central government and to the imprisonment of some councillors. As with the introduction of the 1834 Act itself, this action was driven by government’s determination to underpin the operation of its provisions with a clear ideological statement of the distinction between deserving and undeserving poor.

The introduction in 1934 of the first national scheme for social assistance, under the aegis of the Unemployment Assistance Board (UAB), was thus again driven largely by issues of central government control and rationalisation; this scheme, it was hoped, would reimpose a clear discipline, that access to the state’s financial help was conditional on desert, demonstrated either by a clear incapacity to work or by frequent and manifest attempts to do so. It removed the ability of maverick local authorities to undermine this discipline by (in the view of government) unwarranted generosity. The general political pressures leading to the introduction of the UAB – an arm’s length organisation supervised by government – are described in more detail elsewhere (Craig, 1992a; SBC, 1977). During the Second World War, the UAB was replaced by the Assistance Board (in 1941), an organisation noteworthy for the temporary abandonment of the strong ideology of desert. German bombs were no respecter of class and relatively wealthy people were as likely to find themselves queuing for help from the state, as were those in more obvious poverty.

Following the end of the war, and building on the publication of the Beveridge Report, the Assistance Board was replaced in 1948 by the National Assistance Board (NAB). Despite the euphoric Parliamentary rhetoric which talked of the ending of the Poor Law, the NAB’s provisions were little different from those of its predecessors and only minor amendments were made in terms of the scope and eligibility of the scheme until its abolition in 1966. Demand for one-off ‘exceptional needs’ payments (ENPs) grew irregularly but significantly throughout the life of these schemes raising one of the key structural issues facing such schemes, that of the inadequacy of basic benefits levels. If, it was argued, more and more people had to turn to additional payments for help in managing to meet their most basic needs, did this not say something about the ability of normal benefit rates to meet those needs? By 1965, the last full year of the NAB, and in a period of considerably lower levels of unemployment than in the early 1930s, the Board paid out almost one-third million ENPs, almost twenty times as many as in the early years of the UAB. Alongside this, and despite the intention that the national scheme would reduce variability in provision across the country, its reliance on the discretionary judgement of its officers and the Board members meant that decisions might be made which were out of line with the government’s dominant ideological goals.

The exceptional needs payments scheme

In 1966, the NAB was replaced by the Supplementary Benefits Commission (SBC), as part of a broader reform of social security which attempted to honour the Labour Party’s pledge of an income guarantee and deal with problems of stigma and low take-up (which had persisted and led to problems of low take-up and hardship – particularly amongst older people and the unemployed – despite the abolition of the Poor Law provisions). It also was intended to respond to ‘growing concern about the increasing reliance on discretion in the national assistance scheme which was not only administratively costly and inefficient but was increasingly recognised to be inequitable’ (SBC, 1977, p.209). The growth in discretion was however largely identified by government as being to do with the growing number of discretionary weekly additions to benefit (which were replaced by long-term additions, called Exceptional Circumstances Additions – ECAs) rather than with one-off payments which were yet to be identified as a very serious financial or political problem (Webb, 1975).

The 1966 Supplementary Benefit Act stated that people whose resources did not meet their requirements would be entitled to benefit, a move in the direction of legal entitlement and weekly benefit was clearly marked out as for ‘normal requirements’. Over and beyond this, the SBC was empowered to pay either or all of extra weekly additions for people with ongoing needs (such as for supplementary heating or dietary requirements), one-off payments (ENPs) for unusual one-off needs, and payments to people ‘in urgent need’ (for example as a result of fire or flood), a power which overrode all others and could be used regardless of whether applicants were eligible for weekly benefit. This immediately raised the issue of boundary problems; between what were normal requirements, ongoing needs and ‘unusual one-off needs. Arguments about these boundaries were to grow through the 1970s.

In the 1970s, the political and economic climate changed. Political interest generated by the ‘rediscovery of poverty’ (Townsend, 1959; Cole and Utting, 1962) and the slow but steady growth of unemployment (which reached 2.6 per cent in 1970), focused attention more sharply on the adequacy of the social assistance scale rates, and thus on the role of one-off payments. By 1970, 4 million people were wholly or partially dependent on supplementary benefit (SB), more than three times as many as when the NAB was formed. However, although the numbers of those on SB grew by 11 per cent between 1969 and 1976, in this period the number of ENP awards grew by 137 per cent. All claimant groups contributed to this growth but the number of those who were unemployed grew fastest. In 1976, the number of ENPs awarded topped one million for the first time, at a total annual cost of £25 million and growth continued until the abolition of the SBC; in 1979 1.3 million ENPs were made (a threefold increase on the 1966 levels) at a cost of £38 million, and the average value of payments rose six fold over the same period to £34 in 1979. Contemporary enquires made by the SBC showed that most expenditure went on clothing for adults and children, bedding, removal expenses, furniture, household goods and fuel. Clearly, this pattern of use provided more than adequate material for endless debate about the boundaries between normal, exceptional and urgent needs.

A report in the early 1970s (Marshall, 1972), probably the first time ENPs had had such specific attention paid to them, also analysed the receipt of ENPs by claimant group and identified several key issues. The major group in receipt of ENPs turned out perhaps surprisingly to be women with dependent children whereas Marshall’s and other studies demonstrated that, despite the intention of government to make the scheme stigma-free, there was significant under-claiming by older people. Pensioners were more likely to receive weekly additions to payment but were discouraged by the discretion still inherent in the ENP scheme, as this was perceived as likely to label them as undeserving. Within the averages for ENPs, there were significant variations; although most claimants receiving ENPs got no more than one in a year, a relatively small proportion of claimants received both more than one ENP and did so at an average award level significantly higher than the average. There were also significant intra- and interregional variations in levels of awards and some regions accounted for as much as 50 per cent higher rates of payments than others. The SBC (1976, pp. 64-5) suggested these variations might reflect not only relatively differing levels of deprivation and, thus, need but also ‘the activity of local organisations in bringing unmet needs to light’, perhaps the first official recognition of the role of welfare rights take-up campaigns in placing demands upon the social security system. By 1976, the SBC noted that a range of factors might affect variations in take-up of ENPs, including the make-up of the workload, the extent of outside pressures, the attitudes of officers and the nature and situation of the area covered (SBC, 1977). By 1976, the SBC had established a wide-ranging review of the supplementary benefits system, triggered by its own analysis in the 1975 Annual Report (SBC, 1976). This highlighted the key issues which the experience of the ENP scheme had revealed and led to further proposals for reform. These issues are briefly summarised below.

Challenging decisions

Although the supplementary benefits scheme itself was based on entitlement, the ENP scheme remained firmly set within a discretionary framework. Thus, the manner in which officers interpreted its decisions was likely to vary and their decision-making was as likely to be open to challenge, either through administrative or legal processes and there is little doubt that the discretionary nature of ENPs, and the growing reliance on them, was a major driver in the growth of what became known as the ‘welfare rights industry’ during the 1970s. This industry became formalised in the late 1970s with the appointment of welfare rights workers, particularly within some Scottish local authorities, and has since become a common feature in the landscape of local government. One of the key debates during the 1970s was thus about the relative merits of discretion and entitlement, often conducted within the vehicle of appeals tribunals.¹ In the early 1970s, less than 0.25 per cent of all SB claims reached a formal appeal tribunal hearing but this number was to grow and the significance of ENP appeals with SB appeals more generally was to be marked. The newly-established Child Poverty Action Group had suggested that the relative lack of success of claimants attending tribunals unaided compared with those who were supported by an experienced advocate such as a solicitor or welfare rights worker, illustrated both the difficulties of obtaining justice from a discretionary scheme and the growing complexity of the scheme (CPAG, 1969). Both CPAG and others argued that appeal tribunals were less a safeguard of the legal rights of claimants than a safety valve for the system, which incorporated dissent, and that they also often degenerated into a forum for discussing the personal failings of claimants. In their view, a more legalistic system would offer better protection for the rights of claimants and be likely to meet the goals of the Franks Commission (1957), established to review the role of tribunals, of openness, fairness and impartiality. However, tribunals, like officers, continued to exercise discretion and their decision-making was frequently characterised by a lack of independence from the social security system, by bias and prejudice (Adler and Bradley, 1975) and by mequitable and inconsistent outcomes.

By 1973, the first year such figures were publicly available, the proportion of appeals involving ENPs reached 28 per cent of the total of 25,000 SB appeals heard, representing about one per cent of all ENP decisions made (a pattern which remained evident following the implementation of the social fund; see Smith, Chapter 4, this volume). Of the decisions in 1973 revised by tribunals, however, almost 50 per cent concerned ENPs; thus a high proportion of tribunals concerned ENPs and for these tribunal decisions, the chance of having an ENP refusal revised was considerably higher than for any other kind of decision. This pattern suggested that tribunals’ use of discretion was indeed acting as a safety valve for dissatisfied applicants. For weekly additions to benefit, decisions revised at tribunal constituted only 16 per cent of the total of appeals heard. The SBC (1977) also noted that decisions regarding ENPs were overwhelmingly more likely to be challenged than those regarding weekly additions but its figures also suggested that the proportion of decisions reversed in the claimants’ favour varied markedly between groups, again apparently reflecting perceptions of deserts. A study the SBC commissioned also pointed to the fivefold discrepancy in success rates between those who were represented (45 per cent) and those who were not (9 per cent). The operation of the tribunal system thus raised issues about discretion, fairness, bias and complexity.

Boundary issues

A scheme based on discretion and operated alongside two other schemes (the urgent needs and weekly additions payments schemes) was always likely to generate disputes about the boundaries of eligibility. Titmuss (1968), at one time a deputy chair of the SBC, had argued that discretion was more able to respond to exceptional needs and that this was a major advantage of discretionary ENPs for claimants. However, this argument was likely to be undermined where officers operated discretion narrowly and harshly, and where judgements were made between different groups on the basis of prejudice. His argument also lost force as the numbers of those on SB and claiming for ENPs grew so that the system became increasingly unable to respond sensitively to the demands of a mass constituency. During the 1970s, the tension at the boundary between the scale rates and ENPs reflected the competing pressures of, on the one hand, a growing recognition of the inadequacy of the scale rates and, on the other, an increased concern by government to contain expenditure in an area where year-by-year increases were significant and, in the view of government, becoming out of control.

Attempts to control expenditure led to other forms of boundary dispute, notably with local government social services departments (established following the Seebohm Report in 1970), which increasingly came to feel that the impact of refusals to award ENPs was being felt on their budgets. Local authorities were empowered to make cash grants to families with children felt to be at risk but a pattern was emerging which suggested that these grants were being made for items which were properly the responsibility of the SBC (Lister...