Consultation on regulations and statutory guidance under the Welfare Funds (Scotland) Act 2015: Analysis of Responses

6 PAYMENT AND PROCESSING OF CRISIS GRANTS

6.1 The consultation document noted Parliament’s intention that CGs should be paid in cash or by cash equivalent unless it suits the applicant to have the grant paid in another manner. It also highlighted that local authorities may use different payment methods for different reasons. For example, payments by Paypoint or Allpay may be used in situations where it is too far for the applicant to travel to collect cash. Payments made by fuel card may allow the applicant to get help more quickly than if s/he has to go and buy the card first. In addition, the point was made that some local authorities no longer have cash offices as payments to local authorities are increasing made electronically. Moreover, it may cause harm to some applicants to be paid in cash (for example, where there are dependency or addiction issues).

6.2 The consultation therefore sought views about which types of payments should be considered as ‘cash equivalents’. Five choices were listed, and respondents could select as many as they wanted. They could also offer suggestions for other suitable cash equivalents. Comments were invited about how local authorities could make sure that the way they make the award is the best for the applicant.

6.3 The consultation document also set out the required timescales for processing CGs (immediately after the authority has received all information allowing a decision to be made, and in any event, no later than the end of the next work day). Furthermore, the working day was specified as between 9am and 4.45pm. Respondents were asked if they agreed with these timescales, and if not, to explain why.

6.4 Three questions were asked in relation to these issues.

Question 7: Which sorts of payments do you think are cash equivalents that local authorities should be able to use to pay SWF grants? You can choose as many as you like. (Paypoint or alternative electronic transfer / Allpay (without restrictions) or other loaded store card / Fuel cards / High street vouchers accepted at a number of outlets e.g. for clothing / Travel tickets, bought on behalf of the applicant)

If there are other forms of payments that you think would be suitable cash equivalents for local authorities to use, please tell us what they are.

Question 8: How can local authorities make sure that the way they are making the award, i.e. in cash or by a cash equivalent, is the best one for the applicant?

Question 9: Do you agree with the draft statutory guidance on timescales for processing CGs? (Yes / No)

If not please explain why.

Views on cash equivalents (Q7)

6.5 Altogether, 51 respondents (44 organisations and 7 individuals) selected one or more of the options listed in the consultation document; two-thirds (32 out of the 51) selected all five options. Table 6.1 shows that the option chosen most often was ‘Paypoint or alternative electronic transfer’.

Table 6.1: Which sorts of payments do you think are cash equivalents that local authorities should be able to use to pay SWF grants?

Cash equivalent option	Number of respondents	% of 51
Paypoint or alternative electronic transfer	46	90%
Fuel cards	42	82%
Travel tickets, bought on behalf of the applicant	42	82%
Allpay (without restrictions) or other loaded store card	40	78%
High Street vouchers accepted at a number of outlets	40	78%

6.6 Only one of the respondents to the Easy Read consultation replied to this question. This individual thought that cash, shopping vouchers, gas and electricity cards and payments to a mobile phone were all suitable payment methods for CGs, but that store cards and travel tickets were not.

Other cash equivalents suggested by respondents

6.7 The second part of this question invited respondents to suggest other forms of payment which could be suitable cash equivalents. Thirty-nine respondents made comments in response to this question. However, just eight of these suggested other cash equivalents, or made comments about how to improve the provision of cash equivalents for CG applicants. The other cash equivalents suggested by respondents were:

• Travel warrants / Bus fares
• Furniture (provided by an approved supplier)
• Electronic bank transfer (only if the applicant’s bank account is not overdrawn)
• Gift cards (distinguished from ‘vouchers’) for High Street shops
• Use of ‘fuel banks’.

6.8 In addition, one of the eight respondents suggested that the Scottish Government and local authorities should investigate the possibility of using mobile phones or other forms of new technology to make payments directly to applicants, or to allow applicants to shop online and receive deliveries to their home. Another suggested that a nationally negotiated contract with Paypoint, Allpay or fuel card suppliers could provide benefits (in terms of reduced local authority administration costs) similar to those achieved through the national procurement contract with Scottish Excel for domestic furniture.

Discussion of cash equivalents

6.9 Most respondents used the space provided by the second part of Question 7 to discuss the advantages and disadvantages of the five cash equivalent options listed, or to comment more broadly on the principle of offering cash equivalents rather than cash. In relation to this latter issue, there appeared to be different perspectives among different groups of respondents.

6.10 Among third sector respondents, a recurring theme was that applicants should have the right to choose how the grant is paid from among the options available. This group also argued that the payment of CG awards should be made in cash or by bank transfer unless the applicant prefers payment with a cash equivalent. Some called for the statutory guidance to make clear that cash (not cash equivalents) should be the default payment method, and commented that this had been the intention of Parliament during discussion of the Welfare Scotland Bill. This group generally thought that the cash equivalents listed in the consultation paper would all be suitable so long as the applicant preferred them over cash, and their use did not disadvantage or harm the applicant in any way.

6.11 Payment by cash (or bank transfer) was seen to be best because there was no stigma associated with the use of cash, and no restrictions on where and how it could be spent (thus giving people greater personal choice and control). Payment by bank transfer was also described as ‘the cheapest, most efficient, direct and convenient method of payment’. This group often focused on the disadvantages of payments made by cash equivalent.

6.12 Local authority respondents, in contrast, did not generally comment on the principle of cash payments vs payments by cash equivalent. Rather, this group often discussed the advantages of using different cash equivalents (and in some cases, the disadvantages of cash payments), and their experiences of making payments with cash equivalents. A recurring theme among this group was that it was important for local authorities to continue to have, not only a range of options, but the discretion to discuss and agree with the applicant the best payment method. Not all methods of payment were seen to be suitable in all geographic areas.

6.13 Respondents commented that cash payments are not always preferred by people, for example if their bank accounts are overdrawn, or (for those in rural areas) if they would need to travel long distances to their nearest council office to collect a cash payment. Cash payments are also not suitable for some people (i.e. because the applicant is vulnerable, or subject to financial abuse from another person, or because of a gambling or other addiction). This latter point was also made by one of the respondents to the Easy Read consultation.

6.14 The point was also made that the range of ways in which payments can be made is likely to increase and improve in future, and therefore, it would be better if the regulations were not prescriptive on this issue.

Perceived advantages and disadvantages of payments by cash and cash

6.15 As mentioned above, respondents sometimes highlighted advantages and disadvantages of different types of cash equivalents. These are briefly summarised here.

• Allpay or other loaded store card – Advantages: cannot be spent on alcohol or gambling. Disadvantages: may feel stigmatising to people.
• Paypoint – Advantages: can be useful for people who do not have bank accounts; particularly useful in rural areas where it may be difficult to get access to cash quickly; described as ‘fast and efficient’; can be issued by text message. Disadvantages: Harder for people in rural areas to use them anonymously; problems with some local services not accepting Paypoint or saying they do not have the money to fulfil requests.
• Travel tickets – Advantage: appropriate for people who are stranded away from home; can’t be sold on for cash. Disadvantages: too complex for local authorities to manage; too inflexible for applicant.
• High Street Vouchers – Advantages: ensures the payment is used as intended; appropriate for people who cannot manage cash due to vulnerability; can be used when shopping online. Disadvantages: stigmatising; inflexible (often resulting in applicant needing to purchase more expensive items); can be sold on and for less than face value.
• Providing goods instead of cash – Advantages: good quality and good value for money allowing the Fund to help more people; ensures the grant is used as intended. Disadvantages: no choice for the applicant; often fails to meet the applicant’s needs; can cause an administrative burden for local authorities.

6.16 Some respondents made a general point about high street vouchers that, if they are to be used at all, they should not identify the individual as a recipient of the SWF.

Deciding the best method of making an award (Q8)

6.17 Question 8 asked respondents for their views about how local authorities could make awards in the best way for the applicant.

6.18 The most common response to this question from third sector organisations was: by discussing the options available, and asking the applicant which s/he prefers. Some suggested that the applicant’s preferred payment method should be recorded and, if another payment method is used instead, the local authority should be required to explain and record the reasons.

6.19 Local authority respondents often described local procedures, and the complex range of issues they considered when making awards to applicants. (Many of these same issues were discussed by non-local authority respondents too.) These included not only the applicant’s specific needs and preferences, but also:

• How to get the award to the applicant in the fastest way possible
• How to ensure that the award is used to meet the applicant’s needs in the way it was intended
• How the payment can be made to stretch as far as possible.

6.20 Thus, local authority respondents sometimes acknowledged that applicants would not always be paid in their preferred manner.

6.21 Local authorities and housing organisations often suggested that decision makers might, in some situations, discuss the issue with a support worker, advocacy worker or other professional involved with the applicant, and where vulnerable individuals were concerned, they might make use of a ‘supervised spend’ arrangement.

Timescales for processing Crisis Grants (Q9)

6.22 The 2015 Act (Section 4.3) sets out a requirement for local authorities to make decisions on CG applications no later than the next working day. The draft statutory guidance provides further details, including that:

• Local authorities must consider a case and make a decision immediately they receive all the information they need to make the decision
• A working day is from 9am to 4.45pm. If an application is received after 4.45pm, it should be treated as being received on the next working day
• Even if the local authority is still waiting for a piece of information that they think is relevant to the decision, a decision must be made by close of business on the day after the application has been received. This means that a decision is made at the end of the day after the application is received, on the balance of probability, based on the information held at the time.

6.23 Respondents were asked in Question 9 if they agreed with the draft statutory guidance on timescales. Altogether, 53 respondents replied to this question. Table 6.2 below shows that nearly three-quarters (72%) agreed, and 28% disagreed.

Table 6.2: Do you agree with the draft statutory guidance on timescales for processing CGs?

	Yes		No		Total
Local government	8	47%	9	53%	17	100%
Third sector / equality organisations	16	94%	1	6%	17	100%
Housing organisations	6	86%	1	14%	7	100%
Other organisational respondents	2	50%	2	50%	4	100%
Individuals	6	75%	2	25%	8	100%
Total	38	72%	15	28%	53	100%

6.24 Local authorities and ‘Other’ organisational respondents were divided in their views on this question. Third sector, housing organisations and individual respondents generally agreed with the draft statutory guidance. One of the respondents to the Easy Read consultation answered this question and expressed satisfaction with the proposed timescales.

6.25 Respondents appeared to have different understandings about the statements made in the draft regulations and statutory guidance on timescales. Some thought the intention was that applications would only be considered once all necessary information had been received (i.e. after the application was completed) – at which point, local authorities must make a decision by no later than the following working day. However, others thought that the clock began ticking as soon the application had been received (i.e. even if it was incomplete). Some respondents called for clarification of this matter.

Agreement with the proposed timescales

6.26 Those who agreed with the draft statutory guidance on timescales emphasised the importance of avoiding delays when making decisions for people who were faced with a crisis or emergency. Some in this group specifically expressed satisfaction with the new shorter timescale, as compared with the 48-hour timescale set out in the interim guidance. The local authorities in this group often stated that the proposed new timescales were line with their own current processing timescales.

6.27 However, some respondents in this group appeared to anticipate the issues highlighted by those who disagreed with the draft statutory guidance on timescales (discussed below). While these respondents supported the principle of quick decision making, they also thought that local authorities should have the discretion to extend the timescales to allow applicants sufficient time to provide missing information or to get help in completing their application. This may be particularly important for applicants who need help from an advocate, support worker or carer (e.g. because of a disability, learning disability or cognitive impairment).

Disagreement with the proposals

6.28 Those who disagreed with the draft statutory guidance on timescales also generally supported the principle of quick decision making, and some specifically stated that it was reasonable for local authorities to make a decision on an application within 24 hours after all information was received. However, the main point made by this group was that local authorities should not be expected to make decisions before they have all the information they need to do so. Moreover, given the high volume of applications, the complexity of the decisions that are required, and the small staff teams in some local authorities, the proposed timescales were seen to be unrealistic.

6.29 Respondents in this group believed that the proposed timescales would likely result in a greater number of applications being declined, or applicants not being awarded the amounts requested, due to insufficient information. The knock on effect would be an increase in the number of reviews requested. Moreover, given the draft regulations regarding repeat applications, applicants would be unable to reapply for a CG within 28 days unless their second application was different in nature from the first. Ultimately, this would result in increased administration, decreased efficiency in processing applications and decreased applicant satisfaction.

“If an award had to be made no later than the day after a claim has been made, sometimes without all supporting evidence, it is possible that the default position for local authorities will be to not make an award because they cannot substantiate the reason for the claim. This could lead to rework or increased review requests once the evidence is available.” (Local authority)

6.30 Some respondents pointed out that the draft statutory guidance was not consistent with the interim guidance issued in April 2015, which stated that local authorities have two working days to assess CG applications and 15 working days to assess CCG applications. The respondent quoted above also noted that in February 2015, a consultation document was circulated among the SWF practitioners group which proposed a timescale for processing CGs as follows: ‘on the same working day if a completed application is received before midday or midday the following working day if it is received after midday’. This timescale was thought to be more realistic.

6.31 Related to this point, some respondents queried the use of the word ‘immediately’ in the draft regulations, and suggested that the wording should be changed to say that local authorities must make a decision ‘as soon as reasonably possible’ after all information needed to make the decision has been received.

6.32 The other main issue raised by this group concerned the times specified for a working day. Respondents thought the working day should be considered to be 9am – 4pm (not 4.45pm), with applications received after 4pm considered as being received the next day. The point was made that it may not be possible for a decision to be reached the same day if a completed application was submitted, for example, at 4.20pm. Some respondents also commented that Friday is a short day for some local authorities.

Other issues and suggestions

6.33 Other issues raised by respondents, irrespective of whether they agreed or disagreed with the proposed timescales were in relation to:

• Insufficient staff resources: Some suggested that administration of CGs in some local authorities was under-resourced for the demand. Third sector organisations reported difficulties in contacting SWF staff, and local authorities reported substantial increases in the number of applications, unpredictability in the number of applications, and a lack of capacity in staffing particularly during periods of annual leave or sick leave.
• Out-of-hours service: Respondents often highlighted the problems that can arise for people who have no access to crisis funds at weekends (and holiday weekends), and there were some calls for the provision of an out-of-hours service.

6.34 Respondents made a range of other suggestions, including:

• The impact of the new timescales should be monitored.
• Information about the new timescales should be widely publicised to applicants so they know what to expect when applying to the Fund.
• There should be a way to challenge local authorities if they are not meeting target processing times, both for CGs and CCGs.
• Consideration should be given to the implications for local authority computing systems of being expected to record timescales accurately.