This article titled “Food vouchers to provide emergency help but prevent spending on alcohol” was written by Patrick Butler, social policy editor, for The Guardian on Tuesday 26th March 2013 21.00 UTC
“Food stamps” arrive in Britain next month, when tens of thousands of vulnerable people will be issued with food vouchers in lieu of money to tide them over short-term financial crises.
Rather than, as now, offering a cash loan, most councils will from April offer new applicants who qualify for emergency assistance a one-off voucher redeemable for goods such as food and nappies.
Many of the 150 local authorities in England running welfare schemes have confirmed that they will issue the vouchers in the form of payment cards, which will be blocked or monitored to prevent the holder using them for alcohol, cigarettes or gambling.
Several plan to issue charity food parcels to people applying for crisis help, and are preparing to give cash grants to food banks to enable them to take on full-time staff and increase opening hours.
Each authority has drawn up eligibility rules, setting out who will qualify for crisis help and the conditions under which it will be given. One plans to make emergency help conditional on good behaviour.
The shift to in-kind and voluntary assistance follows the decision last year to abolish the government-run social fund and to replace it with more than 150 welfare assistance schemes, operated by English local authorities and the Welsh and Scottish governments.
The social fund – known as the “backstop” of the welfare system – typically offered small loans of about £50, repayable against future benefits, to help vulnerable individuals who faced short-term crises as a result of having cash stolen or benefits delayed.
A separate set of cash grants, typically worth about £1,000, was made to people with a disability, ex-prisoners and victims of domestic violence, to enable them to buy or replace items that would help them live independently, such as beds, clothing and kitchen utensils.
Although social fund spending represents a relatively tiny chunk of the social security bill, there is concern that the new arrangements will for the first time build into mainstream welfare provision the distribution of food voluntarily donated by the public, schools and businesses.
Lady Lister, a Labour peer and poverty expert, said the shift from cash loans to in-kind help would leave the most vulnerable people “high and dry”.
“The social fund was a safety net under the safety net,” Lister said. “I do not call putting money into food banks a safety net.”
Some fear the use of in-kind vouchers will repeat the shortcomings of cashless payment cards, issued to asylum seekers. Critics said these cards left users unable to buy essential non-food items, and made them more likely to turn to risky or criminal ways of obtaining cash.
One welfare charity worker said: “There’s a lot of naivety. The social fund is big, and meets a whole range of needs. There’s going to be an awful lot of people that will need to tap into its successor.”
But councils say huge reductions, in some cases cuts of up to a third, in the amount allocated to support people in hardship have left them with no option but to offer vouchers, refer applicants to food banks and secondhand furniture projects, and to drastically tighten eligibility. The government spent £230m on the social fund in 2009-10 but has allocated £178m to local authorities for 2013-14.
Inquiries by the Guardian found that:
• Conservative-run Hampshire council plans to invest a big chunk of its welfare fund allocation in charities and food banks. Over time, it hopes to stop offering food vouchers as part of a shift towards “reducing the entitlement culture”.
• Labour-run Manchester city council will offer successful applicants low-interest loans of up to £200 a year, with a credit union, rather than food vouchers. It says in future years grants for furniture and cooking utensils will be offered on condition that recipients sign up to “expected behaviours and actions”.
• Bristol city council’s crisis fund restricts emergency payments to food, heating, nappies and toiletries. It says the cards “should not be used for cigarettes, alcohol or entertainment”, and if misuse occurs it will seek repayment.
• Labour-controlled Darlington council plans to invest £58,000 in a church food bank, including £30,000 to enable the charity to take on a full-time worker.
From April, thousands of applicants who now have access to crisis help will be turned down under the schemes. Many councils plan to refer the expected rising numbers of unsuccessful applicants to soup kitchens and other charities.
Alison Garnham, chief executive of the Child Poverty Action Group, said: “Local authorities have been given a difficult task, to deliver support on a reduced budget at a time of rising need.
“But we are seriously concerned that some authorities will not be providing any access to cash to families to meet their essential needs, and may be offering support in a way that serves to stigmatise those who need it.”
Others have warned that people who are turned down for crisis help will turn to crime, begging or loan sharks. Almost all authorities are bracing themselves for an expected rise in demand for crisis support from April, when the bulk of the benefit reforms, aimed at saving £18bn, are introduced. Among these is the so-called bedroom tax.
There is also nervousness that any glitches in universal credit, from October, will see an increase in poorer households seeking help from welfare schemes.
The government, and some charities, have argued that the existing system of crisis loans was abused by people – often young men – who did not use the loans for genuine emergencies. They argue the new system will discourage dependency, more efficiently directing scarce resources at the people who most need them.
The Guardian also found that:
• The cost of administering each of the 150-plus new welfare assistance schemes is typically equivalent to around 20% of the value of the entire local fund. Several authorities, including the Welsh government, have outsourced the running of the voucher schemes to private contractors.
• Local authorities are worried that the new patchwork of welfare assistance systems will lead to a postcode lottery, with vulnerable people moving to apply for crisis help in more “generous” boroughs.
• There are concerns that some welfare systems will not be ready by 1 April. The Furniture Re-use Network said a survey showed two-thirds of its members believed the new system would not be in place in time. There are concerns that, despite huge growth in the numbers of food banks in the past two years, many parts of the country will have little charity food assistance capacity.
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