2. Fund purpose and delivery model
- The stated purpose of the SWF is to address one-off need: it is not intended to assist with ongoing or increasing household debt. However, recent years have seen substantial increases in repeat applications and awards for Crisis Grants.
- Local authority managers were clear on the intended purpose of the Fund, but less certain whether it was now meeting those aims in the light of large increases in repeat applications. There was a perception that applicants no longer view grants as 'one-off' and that defining a 'crisis' had become more difficult when people were repeatedly running out of money for essentials.
- There was agreement among local authorities that the Fund is 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.
- There was considerable uncertainty among applicants and wider local stakeholders over exact eligibility criteria for the Fund. This lack of clarity had deterred people from either re-applying or requesting a review following an unsuccessful application.
- The review highlighted potential tensions between providing a fair and consistent service across Scotland and allowing for appropriate local discretion.
- Success rates do vary by local authority, even after other factors are taken into account – indicating that the local authority you apply in does impact on your chances of success.
- However, with some exceptions, there was relatively little evidence of an appetite to move to a more centralised system. The benefits of local links and partnerships in meeting people's needs and linking them to wider support were emphasised by both local authorities and other local stakeholders.
- Suggestions for increasing consistency within the current devolved model included: enhancing centralised support for decision-makers (while keeping decision-making local); more regular updates to SWF guidance; centralisation of some administrative functions; and increasing budgets to reduce discrepancy between local authorities in terms of priority levels.
As described in chapter 1, the central aim of the SWF, as set out in the statutory guidance, is "to provide a safety net to people on low incomes". The guidance clearly states that the Fund is "intended to meet occasional or short term needs and not to provide an alternative source of regular income." A key aim of the review was to explore the extent to which, in practice, the Fund is still aligned with this purpose.
The design of the Fund aims to deliver these aims via a centrally funded but locally delivered "budget limited scheme". Local authorities receive funding from the Scottish Government and central guidance on how to implement it, but this guidance explicitly allows for "extensive discretion over how the scheme is delivered in their area, from taking and processing applications to fulfilment of grants." The review also explored views on this delivery model and whether it is still fit for purpose.
This chapter explores the extent to which there is a shared understanding of the purpose of the Fund among key stakeholders (particularly local authority staff and applicants to the Fund). It examines the evidence on whether the Fund is still delivering on its original aims and views on whether these aims are still appropriate. Finally, it explores views of the delivery model and how it compares with alternatives, such as a more centralised model based on strict rules of entitlement.
Purpose of the Fund
Delivering on its stated purpose?
The Scottish Welfare Fund operates in a challenging context with Scottish Government analysis estimating a £3.7 billion reduction in benefit spending in Scotland between 2010 and by 2020/21.  As early as the interim review of the SWF, published in 2014, the impact of UK Government welfare reform on poverty was becoming evident.
The stated purpose of the SWF is to address one-off need: it is not intended to assist with ongoing or increasing household debt. The SWF guidance also states that ultimately, the scheme is aiming over time to "seek a real terms reduction in expenditure on Crisis Grants as a result of successful intervention preventing crisis reoccurring, thereby increasing funds available for preventative spend on Community Care Grants."
However, data on the level of repeat applications and awards from the Fund clearly indicates that this purpose has come under significant pressure in recent years.
- Repeat applications for Crisis Grants have increased substantially – from 56% in 2014/15, to 71% in 2020/21, and 80% in 2021/22
- Repeat awards for Crisis Grants have also increased, from 49% in 2014/15, to 62% in 2020/21, and 68% in 2021/22
This suggests that in the majority of cases that Crisis Grant awards have not been able to meet needs in a sustainable way. The high level of repeat applications and awards also indicates that the core purpose of one-off or occasional provision for exceptional needs is being stretched in a way not intended.
Community Care Grant repeat applications have also increased, although at a lower rate than Crisis Grants – 23% of Community Care Grant applications were from repeat applicants in 2014/15, a figure that remained similar until 2018/19, but had increased to 26% in 2019/20, 28% in 2020/21 and 30% in 2021/22. The level of repeat awards have not increased significantly over this period, however (15% in 2014/15, and 16% in 2021/22).
Professional understandings and views of purpose
There was a clear understanding across local authority managers interviewed for the review of the intended purpose of the Fund, which was closely aligned with the framing of the aims in the statutory guidance. There were recurrent references to the Fund as a "safety net" for those on low incomes, to help them when they are in crisis or need help to move to or stay in a settled home. Crisis Grants were seen as short-term and intended as occasional rather than as supplements to regular expenditure or income. However, although intended as a short-term or one-off intervention, by linking applicants with wider services the Fund was also viewed as having the potential to contribute to longer-term impacts on people's circumstances. Community Care Grants were seen as having a more explicitly preventive element in helping ensure people do not need to go into care or become homeless, thereby also reducing pressures on other services.
However, although local authority managers were generally clear on the intended purpose of the Fund, they were less certain about whether it was now meeting those aims, particularly in relation to the stated aims for Crisis Grants. A recurrent view was that the SWF is no longer operating as a short-term safety net because of the volume of repeat applications for Crisis Grants (as reported above). There was a perception across stakeholders interviewed for this Review – including applicants themselves – that applicants no longer necessarily view Crisis Grants as 'one-off', and that some think they are entitled to three per year.
Among local authority and other professional stakeholders, there was also a recognition that defining a 'crisis' had become increasingly difficult, in a context in which some people's benefit levels are not meeting their costs of living, so they were repeatedly running out of money for essentials. However, there was no consensus among local authority or wider stakeholders on the solution to these pressures. One view was that these pressures mean that the aims of the SWF should be revisited, alongside, potentially, relaxing rules about the maximum number of applications per year and increasing overall funding so that the Fund can help more people more often and/or provide grants at a level that reduces the need for repeat applications. On the other hand, there was a strong view from others that the Fund cannot act as a "sticking plaster" for issues with the wider benefits system, and that the original aims should not be expanded since the Fund is resource-limited and is not designed to solve underlying problems that create the need for Crisis Grants (drivers of need and demand are discussed in more detail in chapter 3).
"I think they are still the right aims for the Fund, but I don't think the Fund meets those aims … I personally feel people are just applying a lot of the time because we are in the sad state where people's income just isn't enough to live off. Even that additional £20 Universal Credit payment was a great top-up for people and once that's removed, it is a challenge for people to be able to buy food, heat their homes. These are not one-off; these are not out of the norm bills. These are planned bills that they know are coming but customers just don't have enough money to allow them to live in a comfortable environment. And do I think it should fall to a discretionary fund to pick that up? Absolutely not."
(Local authority manager 25)
Both groups, however, were in agreement that the Fund is 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.
"If the government want the Scottish Welfare Fund to be the first port of call, that's fine but give us the money to help people to get to a point where they don't need to come back to us every month."
(Local authority manager 14)
The evidence review also indicates an ongoing tension between the stated purpose of providing 'one-off' assistance to those in financial need and the belief of some third sector organisations that the Fund ought to deliver more in order to make a bigger contribution to addressing hardship. CPAG and Menu for Change noted in their 2018 submission to the Social Security Committee's Call for Evidence on the Scottish Welfare Fund that the changes to the benefits system, and Universal Credit (UC) in particular, left people in financial difficulties for extended episodes so crisis grants were sometimes awarded more than once. These papers argue that, to meet these needs, the SWF would need to be able to provide larger grants for longer, and so would need an increase to the Fund's overall budget.
At the same time, recent research by IPPR for Save the Children and the Trussell Trust also noted that Crisis Grants' share of SWF spending had increased throughout the life of the Fund. SWF data indicates that Crisis Grant applications were 66% of all SWF applications in 2013/14, but had increased to 75% of the total by 2021/22. Expenditure levels have grown by 47% for Community Care Grants since the start of the Fund (from £22,886,051 in 2013/14 to £33,738,407 in 2021/22) but expenditure on Crisis Grants has grown by 250% (from £5,823,531 to £20,371,095).
Although as expenditure figures above show, Community Care Grant expenditure overall is still far higher than Crisis Grant expenditure, these trends have led to concern among some third sector organisations of a shift in the Fund's focus away from help building and retaining a home which might disadvantage some groups. Homeless Action Scotland have called for a 'sea change' in how the Fund is considered, and want it to be seen as preventative spending, supporting people to sustain tenancies and reducing potential costs elsewhere.
Applicants' understanding of purpose and eligibility criteria
Applicants interviewed for the review generally understood the Fund to be aimed at helping people on "low incomes" or "on benefits". However, beyond this, there was considerable uncertainty among applicants over exactly what made someone eligible or ineligible for a grant:
"I don't know how it works, truthfully, 'cos nobody's really ever explained to me how you fit the criteria and how you don't fit the criteria, or why they'd say no, or they've only X amount."
(Applicant 43, unsuccessful for Crisis and Community Care Grants)
Similar views were expressed by wider local stakeholders, working for organisations that support people to apply to the Fund:
"There doesn't seem to be any rhyme nor reason. All you get back is that you don't fit the criteria and I often think 'well, what the heck is the criteria?'"
(External local stakeholder 1, Housing / homelessness charity)
There were examples among applicant interviewees where this lack of clarity had deterred people from either re-applying or from requesting a review following an unsuccessful application, as they were unsure whether there was any point in doing so if they were not, in fact, eligible. It was suggested that the eligibility criteria could be more clearly communicated:
"It gives certain categories of what you can apply under, but don't know if it applies to you, they could expand a bit on this, was never clear"
(Applicant 20, successful Community Care Grant applicant)
The scheme that preceded the SWF, the Social Fund, was administered centrally by the DWP prior to its abolition in 2012. The rationale for devolved provision of the SWF, introduced by the Scottish Government in 2013 when the Social Fund was abolished, was for local discretion, informed by community-based knowledge, linking into local advice and support services.
Both the existing evidence on the SWF and interviews with local authority managers highlight some of the potential tensions between providing a fair and consistent service across Scotland and allowing for appropriate local discretion.
Homeless Action Scotland were of the view that the right level of local discretion was written into the guidance, but was not always encouraged due to budget concerns (though it was not clear exactly how or who within local authorities might fail to encourage discretion). CPAG noted that in some cases the use of discretion at the local authority level meant that an application could meet all of the eligibility criteria (income, savings, personal circumstances etc.) but still not be successful. CPAG and IPPR have both raised concerns that local discretion results in significant variation in application success rates and award levels between local authorities.
Analysis for this Review confirms that success rates do vary significantly by local authority. Taking all other variables for which data was available (such as whether the applicant is disabled or not, tenure, benefit receipt, other vulnerabilities, etc.) into account, local authority was the factor most strongly associated with an application being successful or not, for both Crisis and Community Care Grants. In other words, the local authority you apply for an SWF grant in does affect your chances of being successful.
It is important to note that differences in success rates between local authorities do not in themselves imply inappropriate application of local discretion – as the Fund is cash-limited, they may reflect differences in demand across local authorities, meaning that some local authorities have to operate at a higher priority level than others when determining eligibility for grants in order to stay within budget. Local authorities themselves acknowledged that the cash-limited nature of the Fund does introduce potential inconsistencies between areas:
"The downfall of the current model is the inconsistency; you'd get a different result applying in [smaller more rural local authority] ...they need to reconsider how the grant is distributed... I'm all for localism, but the current system is broken, it's not fair, it's not clear it's equitable."
(Local Authority manager 24)
However, review of data on success rates alongside patterns of expenditure suggests that differences in success rates between local authorities are not entirely explained by differences in pressure on budgets (this point is explored in more detail in chapter 7).
In spite of concerns about decisions potentially being driven by budgets rather than need, and local discretion leading to variation in success or award rates, the evidence review and interviews with local authorities and wider stakeholders indicate relatively little appetite to move to a more centralised system. There are some exceptions to this among the third sector – for example, CPAG have asked for consideration of the national delivery of the Scottish Welfare Fund to provide consistency, possibly through Social Security Scotland. However, in general the evidence review and interviews found strong support for the benefits of local delivery.
Local authority interviewees emphasised the importance of local links and partnerships, both with the third sector and other departments within the council. These were seen as key to both facilitating awareness of grants among those most likely to need them and being able to link people to appropriate wider support. Local knowledge was seen as fundamental to meeting local need:
"Each authority knows the demographics of their community; they know perhaps where the help is needed most"
(Local Authority manager, 11)
External local stakeholders also commented that the arrangements some organisations have in place with local authorities to fast-track applicants where the organisation identifies an urgent need (for example, relating to a need to expedite furniture for a vulnerable applicants moving into new accommodation) might not be possible with a more centralised scheme.
It is also worth noting that feedback on analogous schemes in Northern Ireland and Wales, which do operate via centralised provision, highlight very similar issues the quality, consistency and clarity of decision-making to concerns raised about the SWF. Centralised provision appears to be no guarantee of consistent decision-making.
Although the review found relatively little appetite for shifting away from local delivery, there was a desire to look at ways of increasing consistency within the current model. Suggestions included:
- Enhanced centralised support for decision-makers – while local authorities were supportive of the principle of local decision-making, it was suggested that having a centralised support team that could provide a sounding board for decision-makers when faced with more difficult decisions might enhance consistency and help support local teams:
"I think it would help them knowing they had someone there. Quite often I hear 'what are we going to do with this one?'"
(Local Authority Manager 28)
It is worth noting in this context that the SPSO does already offer an 0800 number and email address that local authorities can contact with SWF queries – they report currently receiving up to 10 queries a month. These comments suggest that it may be helpful to ensure awareness of this option across SWF teams.
There was also a perception among local authority teams that there were more opportunities for sharing of practice and learning between local authorities in the past, and that the Scottish Government and / or the SPSO could look at facilitating more of this. Again, the SPSO noted that they were able to provide more training pre-pandemic and that, subject to resources, they would hope to expand training for local authorities again in the future.
A related suggestion was that consistency of decision-making in line with the guidance might be better assessed and supported via an audit of a random sample of decisions across local authorities. Conducting such an audit was outwith the scope of this review, but a programme of more regular audit might be something the Scottish Government and its partners (including the SPSO) could consider as part of monitoring and supporting delivery in the future – Chapter 10 discusses this point in more detail.
- More regular updates to SWF guidance – Scottish Government guidance outlines how local authorities should deliver the Fund. This guidance is reviewed biennially (the most recent updated guidance was published in March 2021). It was suggested that this guidance should be updated more regularly, to enable it to be more responsive to emerging issues. One example was the interpretation of 'exceptional need' during pandemic lockdown – the SPSO and some local authority managers felt this had been interpreted differently by different local authorities (a point discussed further in chapter 9), and that additional guidance on this issue might have helped to reduce discrepancies arising from this. There was also a desire for stakeholders – including local authorities and the SPSO – to be more involved updates to the guidance.
- Centralisation of some administrative functions– a related option raised in interviews with local authority managers was that it might be possible to centralise some elements – for example, establishing a national application database to facilitate detection of possible cross-local authority fraud – while retaining local decision-making and links.
- Finally, there was a view among local authority managers that budgets should be increased in order to reduce discrepancy between local authorities in terms of priority-levels. Funding levels are discussed in more detail in chapter 4.
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