Projects
The future of the Social Fund
The Social Fund was originally introduced as a means of saving money, replacing grants made under the previous scheme with a loans system. The present purpose is defined by the DSS as "Budgeting Loans are intended to help those in receipt of Income Support or income based Job Seekers’ Allowance to spread the cost of intermittent expenses over a longer period. They represent an interest-free credit facility for those in need of financial assistance to cope with such expenses."
There are two, not unconnected, issues which provide an impetus for the reform of the budgeting loans scheme:
- Perceived iniquities in the scheme. These include concern about large variations in the amount available because of local budget caps, lack of right to a loan, and lack of a right of appeal to an independent tribunal.
- Financial exclusion. A concern that low income households cannot easily access affordable credit as they are not an attractive group for the mainstream financial institutions.
This project analysed how the Social Fund could be reformed to address these issues. It concluded that the Fund should be reformed as a source of accessible and affordable credit for people on low incomes. To achieve this, the scheme would need to centre on ‘who you are’ rather than ‘what you want to spend the money on’, with eligibility being extended beyond those on Income Support.
View/download the discussion paper.
View/download a subsequent paper regarding the Social Fund and young people.