The Social Fund is a small but vitally important part of the much-needed social security system. It is means-tested and consists of many different types of payments to assist the very poorest in society in their time of dire need. Unfortunately, the majority of those payments take the form of loans and MUST be repaid by the recipient even if they remain in receipt of State benefit. These repayments reduce the already paltry amount of cash available and no relief is given in Winter months when fuel bills are punishingly high.
I propose we scrap loans to poor people completely and establish a system of grants. What's good enough for our numerous millionairre Members of Parliament who get similar grants for similar items also paid for from the public purse, should be good enough for our poverty-stricken too.
Further information on the Department for Work & Pension's Social Fund Crisis and Budgeting Loans is available from the DWP in the 195-page pdf dated April 2010 at Parts 3 and 4 respectively
Why does this idea matter?
The Social Fund experiment was introduced in the late 1980's because the previous system of grants was deemed too expensive and a drain on HM Treasury during a period of economic recession. It was further argued that a system of loans which would be repaid from benefit entitlement would remove the incentive for people to remain on benefits rather than to actively seek work. The erroneous ethos was that poor people don't work for a wage because the social security system made life too comfortable for too many individuals and families.
That experiment failed and has merely kept poverty-stricken people in deeper misery by making them repay money needed for essential, basic household items. Forcing the poor to become more poor didn't make them succeed in getting a job, it simply made their horrible and nasty living conditions more nasty and even less likely that an employer would employ such a person in such a poor mental state.
The effect of the failed experiment was both medical and psychological as more and more people sought assistance and relief from the stress of living so poorly and dejectedly. They turned to a doctor en masse and very quickly the Health budget was hit hard, increasing waiting times for treatment.
So, why is this idea of scrapping Social Fund loans so important?
Because it's better, economically more efficient and more humane to grant people some self-respect in their time of need and to help them as they try to enter work in good health, than it is to kick them whilst they're already down.
The argument that many people abuse the system is simply not acceptable when the system itself creates those in such dire need.
Deliberately making poor people more poor in an attempt to keep working wages low is an abuse of political power, counter-productive and sociopathic.
Please rate 5 to help replace loans with grants. Members of Parliament get grants for the same items, so should the poor because they need it most.