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Discretionary welfare system being ‘hacked away’, says senior MP

More than £300 million less is now being spent on the discretionary social fund and flexible support fund.

Discretionary welfare payments are being “hacked away”, a senior MP has claimed, after new figures showed more than £300 million has been axed from two major benefits funds.

Fresh analysis shows the scale of cutbacks to the discretionary social fund and flexible support fund, which can be awarded to poor claimants for a wide range of issues.

Ministers have confirmed that £419.5 million will be made available through the discretionary social fund next year, compared to £679.7 million given out in 2010/11.

Money awarded through the flexible support fund, meanwhile, has fallen from £115 million in 2012/13 to £51 million in 2016/17.

The Department for Work and Pensions says it spends around £90 billion on working age welfare and the changes were part of wider welfare reform “which is restoring fairness to the system”.

Labour MP Frank Field, a former welfare minister and now chairman of the Work and Pensions select committee, said: “Once, we had a universal safety net protecting everybody from destitution.

“Then we moved to discretionary payments which might prevent destitution. Now, that even more crucial safety net is being hacked away.”

  • 2010/11 - £679.7m
  • 2011/12 - £586.8m
  • 2012/13 - £564.2m
  • 2013/14 - £412.3m
  • 2014/15 - £416.1m
  • 2015/16 - £405.1m
  • 2016/17 - £411.5m
  • 2018/19 (budget) - £419.5m

The discretionary social fund is made up of interest-free loans.

Budgeting loans are available to claimants of certain benefits to help them cope with the purchase of major items or services, such as paying to get fuel reconnected or replacing a broken freezer.

In real terms, the amount awarded for budgeting loans fell from £495 million in 2010/11 to £411.5 million in 2016/17, according to figures released to Parliament.

Crisis loans, to cover payments associated with serious risks, were also part of the discretionary fund but were abolished in 2013.

The discretionary social fund has now been devolved to local authorities, which DWP says has allowed greater choice over how money is used to meet the needs of local people.

The flexible support fund is a separate pot of money designed to give Jobcentre advisers greater flexibility to award money to help claimants back into work.

Examples include travel expenses, training courses and clothing for interviews.

Figures uncovered by Labour former shadow cabinet minister Lucy Powell show spending on the fund has fallen every year since 2012/13.

  • 2012/13 - £115m
  • 2013/14 - £110.1m
  • 2014/15 - £91.5m
  • 2015/16 - £58.4m
  • 2016/17 - £51m

The scheme was given a huge boost in its budget in 2014/15 in order to meet travel and childcare costs to facilitate additional support for claimants.

However, DWP says there was a lack of demand and that year the scheme underspent by £87.3 million against its budget.

“Funding from the flexible support fund can be a lifeline to some people, making the difference between a job and remaining out of work,” said Ms Powell.

“With many people still unemployed, entrenched worklessness in some areas, and higher costs for some groups to get back into the labour market, the fund is an important tool to break the cycle of joblessness and provide extra support to help people get a job and keep it.

“It’s worrying then that the total budget for the fund has more than halved in recent years.

“If ministers really want to shift the dial on unemployment, they’ll ensure that there is adequate support for all those who need it.”

A DWP spokeswoman said: “We’re committed to providing support for people who need it and spend around £90 billion a year on working-age welfare, an amount that will continue to rise.

“Changes to discretionary benefits are part of our wider welfare reform which is restoring fairness to the system, supporting those who can into work and helping those who can’t.”

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