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Gary Craig, professor of social justice, looks at the 13 year history of the social fund and finds that it fails abjectly to alleviate the problems of poverty.

In 1988, the Thatcher government introduced the social fund. The fund has provoked great hostility, which is remarkable given its minute contribution to social security expenditure.

When launched it was hated equally by those required to make it work, the poor and their representatives, and the parliamentary opposition. Shadow social security secretary Robin Cook commented that it was "a new assault on the poor ... the social fund will mean sweeping cuts in the help available to the poorest". His successor Paul Flynn noted the fund "is a lottery and the chances of winning depend on where you live ... [local] spending priorities have nothing to do with local needs". Strangely, the fund is still with us nearly five years after the Conservatives were ousted.

The recent House of Commons social security select committee inquiry¹ raised hopes of the fund's demise. But, despite compelling evidence about its disastrous record, and calling for "an urgent overhaul", the committee pulled its strongest punches. The government responded² with a bland assurance that "The Social Fund complements other measures to help the poorest and most vulnerable in our society." This is an echo of Conservative social security secretary Peter Lilley's claim in July 1993 that: "The social fund is solid evidence of the government's continuing commitment to providing help with exceptional expenses for vulnerable people."³

The "end the social fund lobby" has picked itself up from this latest setback and at a major conference organised in Leicester this week is pressing for reform. Despite occasional tinkering, the discretionary fund's structural faults remain:

- The likelihood of discrimination against unpopular claimants - unemployed young people, lone parents, minority ethnic groups.

- An overwhelming emphasis on loans.

- Annual expenditure caps, deflecting demand elsewhere, driving need "underground".

Research has shown that the fund fails abjectly at helping the most vulnerable. First, the fund drives holes in Beveridge's idea that the welfare state acts like a safety net. Loans take claimants' income 15 per cent or more below the already inadequate official poverty line. Successive governments have refused to assess the poor levels of benefits, suppressing the 1960s review that found that levels were totally inadequate. Today's benefit levels are therefore not judged in relation to objective adequacy but 1940s political expediency.

Research⁴ has also showed that the fund generated increased indebtedness among the poorest claimants. The official government evaluation⁵ found that decisions to make awards were so erratic that there was nothing to distinguish the needs of those who received them from those who did not. Perversely, Lilley claimed all this research provided "no evidence to alter our belief that the basic principles of the discretionary scheme are right."

Voluntary agencies⁶ again found that "the fund is manifestly failing to meet need and ... creating confusion and despair amongst benefit claimants". Discretion was in practice unequal, decisions being shaped often by discriminatory attitudes. Although recent changes apparently limit the discretion open to social fund officers, they still strongly influence the way in which claimants needs are "shaped" and the size of loans available.

Because cash limits require social fund managers to juggle with budgets in the face of unpredictable demand, a lottery effect is inevitable. Chances of obtaining help vary significantly between areas, from month to month, and between differing population groups in ways unrelated to need. Demand re-emerges elsewhere. The social security consortium's work⁷ and more recent reviews of the fund's impact on claimants⁸ and on small local charities and national voluntary organisations, such as the Family Welfare Association, reveal increased pressure from people rejected by the fund.

Charities have to take defensive action, requiring claimants to prove they have been refused by the fund before providing help, which leads to increased hardship. Demand is driven into the exploitative private loan sector. Research also reveals many claimants are unwilling to approach the fund either because they were uncertain of their chances of getting help, because they judged themselves unable to service even an interest-free loan from already inadequate benefit incomes, or, in the case of Muslim claimants, that loans were culturally alien.

There are ways to shorten the odds for a successful application. Social fund managers' fears about overspending, balanced by the desire to spend up to prescribed limits in order to avoid losing subsequent budgets, means that February and March are better months for applications, with spending sometimes twice the monthly average. For both grants and loans, the staple fare of exceptional items - cookers, beds and floor covering - are the best bet.

The fund's inability to meet most demand justifies its sobriquet as the "fund that likes to say no". The only change during the past 13 years has been growing pressure on budgets, and more refusals. The Department of Social Security and its successor the Department for Work and Pensions have made marginal changes that have attempted to manage pressure more effectively by, for example, limiting the scope of eligibility. Thus, although gross grants expenditure more than doubled to £98m (1998-9), a concurrent fourfold rise in applications to almost £1.2m, pushed the refusal rate from 48 per cent to 81 per cent in 1998-9. That is eight million refused grants to 1999 - 700,000 of them people refused not because they were ineligible but because of "insufficient priority"- that is there was not enough money available to meet those needs. In 1999, arrangements were introduced for filtering applicants before formal application. Significant numbers of those who might have applied for grants are now discouraged from doing so. Consequently, grants applications dropped 45 per cent in the following year.

A similar pattern emerges for crisis loans with the refusal rate climbing from 12 per cent in 1988-9 to 27 per cent 11 years later. This element is now virtually self-replenishing, income from "recoveries" funding new "awards". Government might regard this as proof that the fund manifests the virtues of careful budgeting, which it champions among poor people. The darker side of crisis loans is that about 60,000 people - of no money, homelessness and so on - have been refused help because of "insufficient priority" or because of "inability to repay". There are people too poor to service even interest-free loans.

Budgeting loans are, however, the fund's operational heart and soul, where social security's disciplinary role is clearest. By the end of 1999-2000, of 15 million budgeting loan applications, 6 million were refused, one-third because of "insufficient priority". Net expenditure fell from £68m (gross expenditure £108m) in 1987-8 to £23m in 1999-2000 (gross expenditure £396m); thus, loan recoveries have risen ninefold from £40m to £373m. Budgeting loans consequently appear not to be under pressure; refusal rates dropped slightly to 40 per cent, while gross expenditure has risen steadily.

This is a statistical sleight of hand that allows secretaries of state to present the fund as responding to demand and meeting the needs of the most vulnerable: actually, one year's applicants are meeting the next year's needs, while demands on expenditure fall. In its first year, the fund's net total spend (the net cost to the Treasury of grants and loans, less repayments)was £118m; last year it was £130m, £33m less than if spending had increased annually by a (very modest) 3 per cent.

This tight financial line is underpinned in part by the refusal to help those regarded as bad risks - the 300,000 plus claimants regarded as unable to repay a loan. The division between the loans and grants illustrates the fund's disciplinary role. The proportion of grants expenditure going to pensioners and disabled people (traditionally "deserving" claimant categories) rose from 31 per cent to 43 per cent. Meanwhile, the proportion going to lone parents and unemployed dropped from 59 per cent to 44 per cent as they were ever more strongly "directed" towards loans. The Department for Work and Pensions, shunning "open" government, has obscured these trends by changes to recent annual reports.

The fund's costs cannot be judged solely in terms of the falling annual net expenditure but through its contribution to the hidden suffering of millions, and to social division and exclusion. The Family Welfare Association reports that families whose requests for help to buy cookers were rejected were told they could buy sandwiches.⁹ And there are the fund's management costs. Social fund officers dislike the stress generated by a scheme predicated largely on refusing help and which has presented enormous financial and administrative problems. Formal accounts were referred back twice by the Auditor General amid accusations of mismanagement, other accounts qualified; administrative costs have sometimes exceeded half-actual expenditure. In 1998-9 administrative costs were £215m, considerably greater than net expenditure (£184m). Administrative resources have been absorbed coping with ineffective computer systems, managing spending on inadequate budgets, moving money between offices in response to predicted demand, and in complex formulae for calculating local eligibility. The complex management of reviews, complaints and judicial reviews, have also consumed substantial public resources.

Since 1934, the existence of one-off payments has tacitly acknowledged that social assistance is inadequate for even the most modest day-to-day living costs. Recent governments have dealt only with one recurring problem - containing expenditure - but by penalising the poorest people in society. Yet, based on detailed proposals for change,¹⁰ a grants-based scheme might have net costs of substantially less than 1 per cent of the current social security budget. The political "savings" would be considerable: recognition that Labour was indeed committed to eliminating the poverty of the poorest. As the Social Security Advisory Committee said in 1994: "We make no apology for repeating our firm conviction that the poorest... people in our society should be protected, whatever sacrifices have to be made by the rest of the community."

Gary Craig is professor of social justice at the University of Hull.

References

¹ House of Commons, The Social Fund, Third Report of the Social Security Committee, HC 232, The Stationery Office, 2001

² Department for Work and Pensions, Report on the Social Fund, Reply by the Government to the Third Report of the Social Security Committee, Cm 5327, The Stationery Office, 2001

³ Peter Lilley, Secretary of State for Social Security Annual Report on the Social Fund to Parliament, The Stationery Office, July 1993,

⁴ S Becker and R Silburn (1990), The New Poor Clients, Benefits Research Unit, 2000; and Social Security Research Consortium, Cash Limited: Limited Cash, SSRC, 1991; and R Cohen, JCoxall, GCraig and A Sadiq-Sangster, Hardship Britain, Child Poverty Action Group, 1992

⁵ M Huby, GDix, Evaluating the Social Fund, HMSO, 1992

⁶ Children's Society, Out of Pocket, Children's Society, 1996.

⁷ G. Craig (ed), Your Flexible Friend?, Social Security Consortium, 1996.

⁸ Church Action on Poverty, Debt on our Doorstep, CAP, 2000

⁹ Community Care, 24 August, 2000

¹⁰ G Craig, Replacing the Social Fund: a Structure for Reform, Joseph Rowntree Foundation 1992; and Social Security Advisory Committee, The Social Fund: a New Structure, HMSO, 1992

Background reading

The social security committee social fund report and the government's response can be found at http://www.dss.gov.uk 

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Spirited children

Children’s spiritual well-being is an integral, essential aspect of their everyday lives, writes Margaret Crompton. And a spiritual life need not mean a religious life.

Every child has the right to “a standard of living adequate for the child’s physical, mental, spiritual, moral and social development” (Article 27, United Nations Convention on the Rights of the Child 1989).

Spiritual well-being is an integral, essential aspect of everyday life. It is not an optional extra, a fairy tale, an academic exercise or a nuisance. Individuals have differing ideas about the meaning of spirituality. For many people, spiritual well-being is inseparable from religious belief and observance. Some who hold no religious belief reject any idea of spirituality. Others believe that spiritual well-being needs no connection with religious organisations.

Whatever the individual practitioner’s personal position and agency focus, good practice depends on recognition of, and attention to, the beliefs, background, experiences, responses, interests and needs of every individual child. Nurturing spiritual well-being requires skills which are essential for all effective communication with children, founded on regard for every child as a whole, unique, worthwhile person.

No special equipment or time are needed. Opportunities for communication occur in such everyday contexts as car journeys, playing, sharing housework, sitting in waiting rooms, walking. Practitioners also meet children in specific agency-focused, time-limited situations, one-to-one or in groups. Children communicate best when relaxed and involved in some unthreatening activity when they may speak about beliefs and experiences which can be described as spiritual.

Nurturing spiritual well-being is essential for the development of integrity, sound judgement, respect for the self, for other people and the world. It is also important for a sense of inner peace. People are commonly said to have “a great spirit,” to “show spirit,” to “be spirited.”

These phrases describe the efforts to overcome obstacles, recognise opportunities, make plans and achieve aims which are essential to human life. Care for the whole child implies concern to nurture and develop the ability to experience the full life of the spirit, inseparable from the body, mind and emotions. Above all, the spirit represents the will to live - even in conditions of  despair, disadvantage, discouragement, terror, and threat.

Messages about feelings and responses are constantly given and received spontaneously. This is illustrated in a description of two-year-old Edward who exhibits a “highly developed quality for delight.”¹ He can “rejoice in each new possibility, whether it is the unexpected brightness of colour, any representation of the sun, moon and stars or the rhythm of music which instinctively makes him dance”. Music offers infinite opportunities for the expression of delight.

In our busy, noisy lives, children’s need for peacefulness and privacy is easily forgotten. Department of Health guidance (1989) requires that children be allowed “special privacy in order to pray during the course of the day, or to build a small shrine somewhere in the home.”² This should extend to the secret dens and private places where children withdraw to exercise imagination, create their own worlds, find peace.

The private place often has no physical site. For 10-year-old Joanna “spiritual refreshment was found in an imaginary garden, where it was always sunny and peaceful, in contrast to the gloominess of her home life and endless chatter of her noisy sisters”.³

Children, whether or not they are articulate or religious, need and experience spiritual refreshment. Sharing stories is a universal method of communication and nurture. Storytelling and reading provide opportunities for relaxation, managing everyday problems in worlds of imagination, developing confidence and trust, exploring feelings and trying out ideas. Children communicate about feelings and experiences through responses to stories, telling their own tales and composing poems.

Sharing stories from religious traditions can encourage respect for both children and source-religion. Children for whom family and faith backgrounds are inseparable may need encouragement to feel comfortable in multi-faith settings. For example, eight-year-old Gurmail told his class that his family had gone to church and Sunday school. His sensitive teacher realised that this Sikh boy had lied because he did not want to appear different from his classmates. Her awareness and responses transformed Gurmail’s anxiety and humiliation into celebration and confidence.⁴

Numerous story books with no religious association explore aspects of spiritual well-being in contexts of, for example, bereavement, exile, facing death, fear, new relationships, threat to the environment. A young child’s enjoyment of colour and representations of the sun, moon and stars links with spiritual aspects of art, and perceptions of the world outside the self which may lead to concern for the environment. This is inherent in all children who experience their surroundings through every sense from the moment of birth (and before).

You need only watch a two year old exploring a garden to see this - discovering insects, feeling the texture of petals, moving soil, smelling flowers, placing plants in the earth. Watch her crouching there for long, concentrated, delighted minutes exploring the ground, aware only of what she feels, sees and smells, discovering the world. She is also continuing the life-long process of discovering herself in relation to that world. Learning to care for, rather than destroy, the environment is crucial as both a contribution to, and effect of, a sense of spiritual well-being.

Spiritual experience does not always involve joy and delightful discovery. Moments of delight have their counterparts in despair and awe have theirs in fear. Children’s responses are often ignored by adults whose own spiritual well-being is, perhaps, neglected and impaired. A social worker described a girl whose parents did not love her as “dis-spirited;”’ she rarely smiled and had little energy, with “no spirit, a shell, no life or verve”. He associated spiritual well-being with “positive motivation, light, involvement, emotional congruence” and “wanted to pour it in” to her. He felt frustrated because “the parents had the lock to the bottle top”.

Another social worker visualised a child whose spiritual well-being was impaired as “dragged down, slumping, exuberance crushed”. Failure to notice or respond to such signals often has disastrous consequences, probably themselves unnoticed or misinterpreted. A 21-year-old remembered her childhood from eight to 11 as “pretty agonising. I was afraid of death, and of life for that matter, and subject to severe panic attacks which nobody seemed to notice”. She had felt unable to explain these experiences but later thought that they were not “caused by any mental instability but simply by my having reached a religious crisis at a ridiculously early age and being quite unable to cope with it”.⁵

“Nobody seemed to notice” for over three years - a third of the child’s life. No special skills were needed to detect her suffering. Awareness, attention, respect and concern would have provided a firm foundation to help her grow through her crisis, gaining insight, strength and confidence. Adults’ fear, anxiety, busyness or boredom constituted neglect.

Whenever children are abused or neglected in any way all aspects of life are affected. Spiritual impairment may be expressed through, for example, chronic sadness, depression, failure to thrive, illness, offending, poor school attendance and attainment, self-harming, suicide, violence, withdrawal.

Practitioners themselves are often “dis-spirited,” crushed by heavy responsibilities and depleted resources, whether inner or material. A government minister recently described the aim of social work as transforming people’s lives. Practitioners need such transformation no less than do the children with whom they work. Approaching that work in the context of nurturing spiritual well-being can bring fresh stimulus and restore declining spirits. Every practitioner, as well as every child, is a whole, unique and worthwhile individual.

Margaret Crompton is a freelance lecturer. Her social work experience in child care spans 40 years. She has written and edited numerous texts on communicating with children.

References

¹ M McClure, “How children’s faith develops” in “The spirituality of children”, The Way, supplement, 86, 1996

² Department of Health, Guidance Notes to Children Act, DoH, 1989

³ R Nye, “Spiritual development”, Crompton, M ed Children, Spirituality and Religion - a Training Pack, Central Council for Education and Training in Social Work, 1996

⁴ L K Thomas, “Communicating with a black child: overcoming obstacles of difference”, P Milner and B Carolin, eds. Time to Listen to Children: Personal and Professional Communication, Routledge, 1999

⁵ E Robinson, The Original Vision, Religious Experience Research Unit, 1977

Background Reading

1 Crompton M, Who am I? Promoting Children’s Spiritual Well-Being in Everyday Life; a Guide for All Who Care for Children, Barnardo’s, 2001

2 Crompton M, Children, Spirituality, Religion and Social Work, Ashgate, 1998