29 March 2004 - Cash boost for Social Fund will help most vulnerable
The Social Fund today received a significant increase, Work and Pensions Minister Chris Pond announced.
The Social Fund provides support to millions of people on low incomes who need help to pay for a variety of expenses and household goods.
The discretionary Social Fund budget provides interest free loans and grants to people on low incomes faced with an immediate financial need. This budget has been increased this financial year to a total of £689 million.
Chris Pond said:
“ The Social Fund provides a lifeline to many people on low incomes and plays an important part in tackling poverty and social exclusion. The Chancellor announced in his 2002 Pre Budget Report an additional £90 million over three years, and has given an extra £10 million this year.
“ I have decided to allocate this £10 million to Community Care Grants, which are vital for some of the most vulnerable people in society. The gross loans budget for the coming financial year will be £560m, an increase of £2 million on last year.
“ Every Jobcentre Plus district will benefit from an increase to their Community Care Grant budget enabling them to help those most in need.”
The Social Fund has both discretionary and regulated elements. The discretionary scheme, which has an overall limit to the cash available, gives flexible help with a variety of needs such as cookers and other household items and includes a system of interest free repayable loans.
The regulated scheme provides for events that are more predictable and can be more adequately provided for through defined qualifying criteria.
Notes for editors
- Written Ministerial Statement issued today
I am pleased to announce that the gross discretionary Social Fund budget for 2004/05 will be £689m. This includes a further increase in net treasury funding of £10m, which is additional to last year’s extra £20m. This means that net funding is now £30m higher than 2002/03, and is the second of three annual increases from a £90m boost for the discretionary Social Fund announced in the Autumn 2002 pre-budget Report.
After careful consideration, I have decided to allocate all the extra net funding to community care grant needs. I have therefore increased the community care grant (CCG) budget by £10m. This is a further significant increase that will help the most vulnerable. It has been distributed so that every District benefits by an increase in their CCG budget and Districts move closer to meeting the same proportion of demand nationally.
The gross loans budget for 2004/05 will be £560m, which represents an increase of £2m over the April 2003 allocation. The increase is due to higher loan recoveries and setting a lower contingency reserve than 2003/04. To maintain fairness within the scheme, the loans budget will continue to be allocated to Districts to support consistency of outcome for applicants wherever they live.
£1m will be retained centrally as a contingency reserve. For example to provide additional help to Districts facing unexpected and unplanned expenditure.
Details of individual District budget allocations will be placed in the Library.
- Background note about the discretionary social find budget
The discretionary Social Fund budget is cash limited. Budgets are allocated to Districts on 1 April each year.
The gross discretionary SF budget allocated for 2004/05 is £689m made up of:
New money (AME) £168.2m
Forecast loan recovery £520.8m
This was allocated as follows:Loans £560m
Grants £128m
Contingency reserve £1mIf the forecast for loan recoveries proves to be an underestimate, any additional recoveries can be allocated to Districts during the year.
The contingency reserve is held centrally and allocations made from it re-imburse Districts for expenditure resulting from a local accident or disaster (eg, flooding).
Since April 1997, the gross discretionary Social Fund budget has increased by £221.5m from £467.5m to £689m, an increase of over 47%.
Since April 1997, the community care grant budget has increased by £31m from £97m to £128m, an increase of nearly 32%.
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