Reports and Campaigns
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The government's latest target in its privatisation of the welfare state is the Social Fund. This fund has been in place since 1988 when it replaced single payments, which were non-repayable grants, with a mainly loans-based system. However it at least provides interest free loans to some of the poorest in society, with reasonable repayment rates out of people's benefit.
Katrine Williams, PCS DWP Wales secretary, personal capacity
The government proposes outsourcing social fund loans to the voluntary or private sector. The three-week consultation period in the run-up to Christmas is an extremely tight timescale.
The government puts forward credit unions as the type of organisation that could deliver, as a way of making privatisation seem more palatable. However very few organisations could take on the provision of something as large-scale as the social fund. The potential privatisation has been made more appetising to private companies by allowing them to charge 1-2% interest on loans with the repayments being taken from people's benefit, as is the case with 90% of the loans currently. So this could be a licence to make money out of the poorest in society.
The government argues that the proposals would simplify the social fund system by combining budgeting loans and crisis loans but this seems to be more about making it easier to privatise the work. Also access to non-repayable grants would be much more limited under these proposals.
The social fund needs to be provided by the public sector. PCS members working on the social fund in the department for work and pensions are angry that this consultation paper has come out with no regard to their views on improving the service to the public. For instance there is no reason why PCS members could not provide an increased service by giving debt and budgeting advice as was originally provided when the social fund was introduced. Hard-working public sector workers who are busting a gut to provide a good service are fed up with being constantly undermined and undervalued.
The consultation paper is on the DWP website and comments can be sent to email@example.com by 23 December.