MP's publish report on the Community Care Grant

The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, today said:

“The Community Care Grant plays a vital role in the lives of the poorest people in helping them get the essentials they need at times of crisis. It is not working as it should. Tight funding in future will make it all the more important to ensure that the scheme operates fairly and reaches as many of the people in the greatest need as possible.

“That’s not happening at the moment. The Department doesn’t know whether grants are going to those most in need and doesn’t check that the grant is spent as intended. There is a postcode lottery and whether an applicant is awarded a grant partly depends on where he or she lives. Key target groups such as pensioners and members of ethnic minorities are losing out because they are less likely to know about the scheme.

“Legitimate applications for support are not being helped by Jobcentre Plus’s failure to introduce basic anti-fraud measures, by the high levels of administrative error and by poor decision-making.

“Plans to devolve administration of the grant to local authorities do not absolve the Department of the responsibility to ensure greater fairness now.”
Margaret Hodge was speaking as the Committee published its 11th Report of this Session which was based on evidence from witnesses from the Independent Review Service, and from the Department for Work and Pensions (the Department) and Jobcentre Plus (the Agency).

The Community Care Grant provides an important safety net for those most in need by helping them to obtain essential items, such as beds or cookers. The scheme has been frozen in cash terms since 2006-07, however, and the Department expects future funding to remain at £141 million a year.

The way the scheme operates is both inefficient and unfair: awareness about the Grant is patchy; it is unevenly distributed across the country and across different groups of people. Errors are too common, with a large proportion of decisions challenged and over-turned; and administrative costs are unacceptably high. The Department has played a passive role in administering the scheme and we do not accept the Department’s argument that it has been constrained by the legal framework from making improvements. We were pleased that, in preparing for our hearing, the Chief Executive of the Agency outlined some important changes to the way the scheme is currently administered.

Under existing arrangements, applying for and awarding a grant is essentially a paper-based exercise and the quality of decision making in Jobcentre Plus is unsatisfactory. Around half of the appeals considered by the Independent Review Service were found to contain significant errors because decision makers were making poor judgements based on incomplete information and without challenging applicants’ statements. At 12% of total Grant funds distributed, administrative error is too high. The risk of fraud and error is further increased by a lack of basic checks and balances: customers are not required to keep receipts and no spot checks are carried out by the Department. Moreover, at £19 million in 2008-09 and 13% of total funds distributed, administration costs are unacceptably high, especially for a scheme intended to be light touch and discretionary.

We also have concerns about the fairness of the scheme. Funding is not fairly distributed across the country, with a clear imbalance between funding in each district and potential demand and need. Thus, an applicant’s chances of receiving a grant vary according to where they live. We consider the Department should do more to forecast demand based on established patterns and trends. Regional funding allocations are decided by Ministers but it is up to officials to provide clear advice about changes needed to improve the fairness of the scheme. Furthermore, this Committee raised concerns five years ago that both pensioners and black and ethnic minority groups appeared to be under-represented in terms of benefiting from the scheme, yet the Department still does not know whether the distribution of funds between people is fair.

Finally, we consider there is scope to help more people by making the purchasing arrangements more efficient. Agreeing central contracts for frequently requested items could generate financial savings of around £14 million a year for the scheme and provide a guarantee of quality to applicants. Such an approach can be used even if responsibility for decision making transfers to local authorities. Technological advances, such as the use of store cards, could also make purchasing easier for customers while preserving their dignity.