This report presents findings from a review of the Scottish Welfare Fund (SWF, or 'the Fund'), led by a team of independent researchers from Ipsos. The review, which was conducted in 2022, involved:
- A review of existing evidence on the SWF and analogous schemes elsewhere in the UK
- Analysis of routine quantitative monitoring data, collected by local authorities and collated by the Scottish Government as well as secondary data sources (official statistics and survey data)
- Data from all 32 local authorities, based on completion of a proforma and follow-up interview with SWF managers
- Qualitative in-depth interviews with:
- 46 applicants to the Fund
- 19 members of local authority SWF delivery teams (drawn from six case study areas)
- 16 external local stakeholders, from organisations that support or work with applicants (again drawn from six case study areas).
The review has also been supported by an Advisory Group, comprising the Scottish Government and key stakeholders from local authorities, COSLA, Scottish Public Services Ombudsman (SPSO), Scottish Prisons Service (SPS), and the third sector.
The overarching aim of the review was to provide as clear and robust a picture as possible of the effectiveness of the SWF in meeting its aim of supporting people on low incomes who require help due to crisis or to live independently, and to identify issues which either improve or hinder the Fund in meeting this purpose.
This summary sets out the key themes emerging from the review and suggests key questions flowing from these themes that will need to be addressed in order to ensure the Fund is able to meet need effectively and sustainably in the future. While the review provides extensive evidence to inform the answers, they are deliberately posed as questions rather than recommendations. This is because the answers – particularly where the questions relate to overall purpose and funding levels – will need to be considered in the round as part of the policy development process by the Scottish Government in conjunction with key stakeholders.
Purpose under pressure
The stated purpose of the SWF is to address one-off need; it is not intended to assist with ongoing need or increasing household debt. However, recent years have seen substantial increases in repeat applications and awards for Crisis Grants in particular.
While local authority managers were clear on the intended purpose of the Fund, as a 'safety net' for those on low incomes to provide one-off help when in crisis or in need to help to move to or stay in a settled home, there was less certainty about whether it was now meeting those aims in the light of these large increases in repeat applications. A recurrent view was that the volume of repeat applications means that the SWF is no longer operating as a short-term safety net. The current context of rising prices and diminishing value of core UK-wide benefits was seen as creating a situation in which determining whether someone was in 'crisis' was more challenging, with more people running out of money for essentials on a regular basis.
There was no consensus among local authorities over how to address this. On the one hand, it was suggested that eligibility should be expanded and funding increased to allow the fund to help more of those struggling as a result of cost of living and other pressures. On the other, there was a strong view that the Fund cannot and should not act as a 'sticking plaster' for issues with the wider benefit system. Both groups, however, agreed that the Fund was coming under considerable pressure to extend beyond the original definition of 'crisis', and that local authorities need a clearer steer from the Scottish Government on this issue.
Is there a need for the Scottish Government to revisit or re-state the purpose of the Fund, in the light of changed external circumstances?
Matching up future need, demand and funding
Establishing a precise estimate of underlying need for the Fund is difficult, as there is no alternative measure that perfectly reflects the eligibility criteria for the SWF. However, analysis of foodbank use, measures of household destitution, evidence from other research, and the views of applicants, local authorities and external stakeholders all point to increasing financial pressures on households. This increase in need was already believed to have impacted demand on the Fund, with a strong expectation that both need and demand would continue to rise.
Applications for Crisis Grants were already increasing pre-pandemic. As of June 2022, applications remained at a historically high level – they had not fallen back to pre-Covid levels of demand. Demand for Community Care Grants fell during the early stages of the pandemic (reflecting restrictions on evictions and house moves). However, demand subsequently rebounded and as of mid-2022 continued to exceed pre-pandemic levels.
While changes to the wider UK welfare system were identified as the root cause of increased food poverty and destitution, the Scottish Welfare Fund is identified as providing a desperately needed and vital safety net. There was strong concern among applicants, local authorities and external stakeholders that the need and demand for the Fund was likely to continue to rise over autumn/winter 2022/23, as the impact of the cost of living crisis and higher energy bills made themselves felt on household finances.
Increased demand was already impacting on budgets pre-pandemic; expenditure on the SWF in 2019/20 was 108% of the allocated budget. While spending as a proportion of allocated budget fell in 2020/21, this reflected a large additional injection of funding from the Scottish Government in response to the Covid-19 pandemic. In 2021/22, overall spending versus budget had increased again, to 115%.
Since the inception of the Fund, there have been wide variations in levels of over- and underspending between different local authorities in Scotland. In 2021/22, 18 out of 32 local authorities overspent, with five overspending by 50% or more, but six spent 70% or less of their allocated budget. There is no consistent pattern as to which local authorities over- or under-spend on budget. However, with notable exceptions, rural local authorities have been more likely to underspend, while those with higher than expected levels of demand (based on proxy indicators of need) are more likely to overspend. There was also some evidence of a relationship between over or under-spend and having lower or higher than expected application rates, though this relationship was not consistent across all areas.
However, interviews with local authorities indicated that these historic patterns may now be breaking down – a majority of the areas identified as previously underspending in the analysis of monitoring data stated that they were predicting to overspend on their SWF budgets this year. Two thirds of local authorities stated that the current level of Scottish Government funding for the SWF in their area was 'a lot less than is required to meet local need', with half of the rest stating that it was 'a little less than needed'.
There was also a strong consensus that the amount allocated for administration of the SWF was inadequate and needed to be very substantially increased for local authorities to continue to administer the Fund in line with the guidance and current target decision times – a recurrent view was that the administrative budget would need to at least double in size to cover costs.
Overall, local authorities were very concerned about future funding for the SWF. There was a belief that, to date, they had been able to manage with a combination of previous years' under-spends, top-up funding from councils themselves, and, more recently, additional Covid-related top-up funding. However, finances were now coming under severe strain. Among the two-thirds of areas that did top up their SWF fund locally, there was concern about whether their councils would be able to continue to do so in the light of significant pressures on council budgets.
In light of increased and increasing need and demand, what level of Funding (including administrative funding) is required for long-term sustainable delivery?
Achieving consistency with discretion
Another key tension apparent across the data collected for the review is around whether and how far it is possible to deliver a discretionary fund like the SWF in a manner that is perceived as fair and consistent across different areas. The guidance on delivery allows for "extensive discretion" over how the scheme is delivered across local authorities. The evidence shows that different areas do take varying approaches to the operation of the Fund with respect to:
- Promotion of the Fund - both the amount (for example, whether it was promoted on an ongoing basis) and nature of promotion (whether it was promoted directly to potential applicants, or only via partners) varied between areas
- Application options and support – although all areas reported offering at least three application channels (as required by the guidance), there appeared to be different emphasis given to different application channels between areas
- Communicating decisions – including whether teams phoned applicants as standard, in addition to notifying them in writing, and the level of detail included in written decision letters
- Further support offered – including whether this focused primarily on unsuccessful applicants or repeat applicants, and the extent to which it involved active referrals as well as signposting.
Assessing whether these differences reflect appropriate local discretion or whether they may have implications for fairness of process and outcome for applicants is challenging. For example, analysis of monitoring data showed wide variation in the level of referrals recorded by different areas, but as those areas making fewer referrals includes some locations with higher levels of successful awards, lower referrals may be associated with a lower perceived need for alternative assistance. It is also unclear the extent to which these differences in reported referrals reflect differences in recording practices rather than actual variations in referral levels.
However, there was some evidence of differences between areas in assessment and/or recording practices which seem unlikely to reflect different priority levels (i.e. differences in threshhold for priority need at which awards are being granted) or local needs. This includes:
- variations in the level of applications rejected as 'incomplete' (combined with evidence of variation in the approach to following up on missing information with applicants)
- differences in the information local authorities require from applicants to support decision-making, and
- perceived differences in local interpretations of specific terms in the guidance, including 'exceptional circumstances' or 'exceptional pressure'.
Moreover, a key finding from the analysis of monitoring data is that local authority is the most important predictor of whether or not applicants are granted either Crisis Grants or Community Care Grants even after other factors (such as their reasons for applying, their personal characteristics, mode of application, etc.) are taken into account.
Local authority managers acknowledged that discretion could result in differences of opinion about grant decisions. They also commented that it did feel unfair that where people live and the time of year they apply might determine the support they would receive (both of which were confirmed by the analysis of monitoring data). However, in general, a degree of local authority discretion in the implementation of the SWF was viewed as necessary, both in order to respond to local need and because the Fund is a cash-limited scheme.
Neither the existing evidence nor interviews with local authority managers and external stakeholders indicated a particular desire for a more centralised model of delivery to ensure greater consistency. Greater centralisation was viewed as risking losing the benefits of local links and partnerships, both in tailoring promotion and delivery to local needs and in linking people to appropriate wider support. The review of analogous schemes elsewhere in the UK also found that more centralised schemes, such as those operating in Northern Ireland and Wales, experience many similar challenges around improving awareness, clarity around eligibility criteria, and the need to communicate decisions more clearly.
However, while there was no evidence of a strong desire for greater centralisation, it was suggested that the Scottish Government could do more to ensure consistency across areas – both by reviewing and clarifying the guidance, and by increasing funding to reduce discrepancies between local authorities in terms of priority levels (that is, to avoid some local authorities having to restrict grants to those assessed at the highest level of priority need in order to manage their available budget).
What actions are needed to enhance the delivery of the Fund to improve consistency between and within local authorities, without losing the benefits of local delivery?
Improving applicants' experiences
Another element of consistency is in how applicants experience the Fund. Interviews with applicants and external stakeholders provided many examples of good practice by local authority SWF teams in terms of communication with and support for applicants and the organisations who work with them. However, they also identified more negative views, and highlighted the need for improvements to ensure that all applicants to the Fund have a consistently more positive experience. Particular issues that may need to be addressed include:
- Promotion to potential applicants – to ensure that those who are eligible to apply do find out about the Fund, particularly where they have limited past experience of seeking state support (such as those in work or newly redundant). Older people were also believed to be under-represented among applicants.
- Communication with applicants – interviews with applicants indicated a need to improve clarity, consistency and tone of communications with applicants. As noted above, although there were examples of positive perceptions of communications with SWF teams, where applicants reported more negative experiences (for example, feeling they were being disbelieved or talked down to), this could have a significant impact in terms of future willingness to apply. Confusion about eligibility criteria and a lack of clarity around the reasons for rejection were also identified as reasons for deciding not to apply in future or not to request a review.
- Application forms – Applicants and external stakeholders both suggested that the application forms local authorities use for the Fund needed considerable improvement to shorten and simplify, reduce repetition, and remove questions that could be perceived as intrusive.
- Accessibility of application routes – Although all areas stated that they offered at least three application routes, as noted above there were variations in the emphasis given to different routes. Applicants were not always aware of all the application options open to them, and there was concern among applicants and external stakeholders that the scheme was not sufficiently accessible to those without internet access or without a smartphone.
- Timescales for decision-making – applicants and external stakeholders wanted to see shorter turnarounds for decisions for both types of grant and for delivery of Community Care Grant goods. Local authorities indicated that decision-making timescales were strongly linked with administrative funding (which, as discussed above, was viewed as too low).
How can local authorities learn from applicants, stakeholders and each other to improve applicants' experiences throughout the application process (and beyond)?
Ongoing data collection, audit and review
The quality and range of data on the SWF collected by local authorities and collated by the Scottish Government far exceeds that available publicly for analogous schemes elsewhere in the UK. However, there are known gaps and issues in this data that could be improved in the future, particularly relating to missing data and the collection of data on equalities characteristics of applicants. Improving the collection and analysis of this data would help further improve understanding of whether there are groups of people in need that may be missing out on support available from the Fund.
Interpreting findings on Tier 1 review would also be helped by improved recording practices, particularly around the reasons for Tier 1 review. However, the evidence that was available indicates that there may be scope for improving the contribution the review process makes to improving practice across Scotland. In particular, local authorities that were more likely to change their decisions at Tier 1 review had fewer decisions changed at Tier 2. This may indicate that encouraging a robust, self-critical approach to Tier 1 review results in fewer decisions being overturned by the SPSO. Raising applicants' awareness and perceptions of review might also help improve the contribution of review to improving practice – interviews with applicants indicated variable awareness of review rights, alongside some scepticism about the value of the process.
Finally, a key challenge for this review has been how to interpret the implications of variations in data between local authorities for consistency of practice. As discretion is built into the Fund, some variation between areas is to be expected. Moreover, the patterns of local variations uncovered by the analysis were often complex – there was no clear pattern as to which areas underspend, have lower success rates, or have more decisions changed at review, for example. Taken together, the qualitative and quantitative data in this report indicates that a wide range of factors are likely to be impacting on outcomes across local authorities, and that these factors are likely to interact with each other, and with budget and demand, in different ways in different areas. At the same time, the review highlights that patterns of demand and spending across local authorities are continuing to shift.
With all this in mind, both suggestions from stakeholders and the experience of the research team in conducting this review suggest that there may be merit in considering the types of ongoing monitoring, review and audit that could best help further understanding of local variations and support local and national improvements in the future. This could include monitoring of the relationships between different indicators at local authority level, which in turn could potentially inform a programme of audit to support learning and improvement.
How can the operation of the Fund be strengthened on an ongoing basis by improvements to routine data collection, audit and review?
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