THE SOCIAL FUND AS AN EXERCISE IN RESOURCE ALLOCATION
| Author | DOROTHY LAWTON,ROBERT WALKER |
| DOI | http://doi.org/10.1111/j.1467-9299.1989.tb00729.x |
| Published date | 01 September 1989 |
| Date | 01 September 1989 |
THE SOCIAL
FUND
AS
AN
EXERCISE
IN
RESOURCE
ALLOCATION
ROBERT WALKER
AND
DOROTHY
LAWTON
The social
fund
is
the latest attempt to cope with the exceptional needs sometimes experienced
by people
in
receipt of
social
assistance. It is also the first occasion when resource allocation
decisions have been located centre-stage
in
a policy area that, hitherto, has been primarily
demand-led. The social fund, which is eventually to be cash-limited, is allocated between
over
400
Department of Social Security
(DSS;
formerly Department of Health and Social
Security,
DHSS)
local offices. The article describes how the
1988/9
budget was fixed
and
allocated between local offices, considers some of the problems that policymakers faced
when devising the allocation criteria and examines the territorial redistribution inherent
in the chosen strategy and which may or may not have been intended.
The social fund
is
a new attempt to solve an old problem (Bradshaw 1987a). The
problem is how to respond to those exceptional needs which are occasionally
experienced by individuals and families and which are not adequately,
or
effectively,
met by the basic social assistance scale rates. The ‘solution’ provided by the social
fund comprises a mixed system of discretionary grants and interest free
loans
paid
from a fund which will eventually be cash-limited. Allocations are made to each
Department of Social
Security
(DSS)
local office which then administers the scheme.
The budget
for
1988/9,
the first year
of
operation, was set at $203 million,
32
million of which was held back as a central contingency reserve (Hansard 1987).
The creation of the social fund means that resource allocation decisions have
now come to assume an unusual importance in a policy area that has hitherto
been demand-led. Key issues relate to
(1)
the overall size of the fund
-
inevitably
the outcome of intense bargaining between the
DSS
and the Treasury;
(2)
the
mechanism for allocating the fund between the
400
or
so
local offices and
(3)
the
criteria for allocating payments between individual claims.
For the most part, attention in this paper is focused on the second issue, between
Robert Walker
is
Assistant Director of the Institute for Research in the Social Sciences
and
Senior
Research Fellow in the Social Policy Research Unit, University
of
York. Dorothy Lawton
is
Research
Fellow in the
Social
Policy Research Unit, University of York. Part of the empirical component
of
this research was
funded
by the Department of Health
and
Social
Security,
as it then was, but the
opinions expressed in this article are those of the authors alone
and do
not necessarily
reflect
those
of
the Department.
Public Administration
Vol.
67
Autumn 1989 (295-317)
0
1989 Royal Institute of Public Administration
ISSN
0033-3298
$3.00
296 ROBERT WALKER
AND
DOROTHY LAWTON
office allocation, although some discussion of the other issues is unavoidable since
all three issues are interdependent. The aims are three-fold: firstly, to consider the
chosen method of allocating the fund as one among the many resource allocation
models which could have been employed; secondly, to examine some of the
problems which much have faced policy makers in implementing the department's
allocation strategy; and, thirdly, to explore the territorial redistribution implied
by the strategy and which may, or may not have
been,
the intended result.
The structure of the paper reflects the three aims. However,
first
it is necessary
to sketch in some
of
the policy background.
THE
BACKGROUND
TO
THE
SOCIAL
FUND
Objectives
of
reform
April 1988 saw the
full
implementation of the
1986
Social Security Act. Perhaps
the most important changes were the replacement of the supplementary benefit
scheme by income support and the creation of the social fund.
Prior to the
reform,
supplementary benefit was available for people whose income
was
less
than their 'requirements', a level usually approved annually by Parliament.
A person's requirements comprised a basic amount (the 'normal requirements'),
determined by factors such
as
age and household composition, a complex range
of 'additional requirements' to cover such things as special diets and extra heating,
and any housing costs which were not met by housing benefits. With the reforms
'additional requirements' were abolished and replaced by flat-rate premia which
are payable on top of a much simplified set of scale rates ('personal allowances').
There are premia for families, lone parents, pensioners and the disabled.
Supplementary benefit claimants who faced exceptional circumstances that were
covered by the regulations used also to be entitled to lump-sum 'single payments'.
In
1986 a quarter of claimants received one or more single payments worth, on
average, $187, and totalling around
3334
million
(Social
Security Advisory
Committee
1987). These, too, were abolished in April 1988 and replaced by discretionary
community care grants, budgeting and crisis loans payable from the social fund.
Single payments for maternity and funeral expenses were replaced earlier, in April
1987, by new means-tested payments which also took the place
of
the universal
maternity and funeral grants.
In
the fit year, a
E60
million budget was allocated
to the social fund for expenditure on grants and a gross sum of El41 million for
loans.
The government, in its reform of social security, had three overall objectives.
It wanted to create a system:
(a) that was 'capable of meeting genuine need: workmg age families were seen
to have replaced pensioners as the group which 'face the most difficult
problems';
(b) that was 'consistent with the Government's overall objectives for the economy':
for example, social security was seen to be 'responsible for a major share of
the current heavy tax burden on individuals and companies', and to create
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