Amid the fury, the closure of the social fund is a quiet tragedy

This government, the most radical in recent times, is laughing at us, writes Carl Packman

Welfare reform has been a huge part of the national conversation this week, but one under-reported move by the government will see community care grants and crisis loans, which were paid through job centres as part of a centralised social fund package, end.

Instead local authorities will now have unspecified funding for alternative provision – boosting the worry that help for the most vulnerable will be subject to a postcode lottery.

While people in receipt of benefits will face more challenges, and almost certain crises, the money sources they can apply for as a last resort are being squeezed. From the bedroom tax, caps on the amount they can receive, and a real term cut after benefits are capped at 1%, measured alongside a rising cost in living, government policy is disproportionately impacting the most vulnerable, especially disabled people who make up one third of social fund claimants.

A new report looking at the localisation of the social fund, by the Centre for Responsible Credit, notes that “Many local authorities are implementing tight eligibility criteria and their assistance is less likely to involve cash payments, with in-kind support such as food parcels and voucher schemes used in their place.”

According to Damon Gibbons, the author of the report, though some local authorities are keeping something akin to the social fund, many are not proposing to put anything in its place, which will inevitably lead to the reduction of support for those in crisis. 

With no state provision, the likelihood that payday lenders and other high cost credit suppliers will benefit is dramatically increased. 

The Social Fund was introduced in 1987, during the Thatcher days. Norman Fowler, who served as a member of Margaret Thatcher’s cabinet from 1981 to 1990, instituted what came to be known as the ‘Fowler reforms’ of the social security system, under which the social fund was introduced.

The fund, set up for those who could not withstand financial shocks or who have little or no savings, could be applied for through government to fund various one-off payments such as funerals or larger items such as furniture. 

Because of problems such as delay, many critics said the fund needed reform. But adding further proof that this coalition government is in many ways more radical than the Conservative government of the seventies and eighties, its future existence is compromised. 

In her book Hard Work, Polly Toynbee re-told her hardship at applying from her local authority for a social fund loan. After making her application she was told she would have to wait several weeks for it. For recipients this meant weeks without money for necessities, and when it did come in it was less than she had applied for. To be sure the social fund needed reforming – but not in the way that this government has done it. 

This is a dangerous move, not only because it removes part the state's duty to provide for the most vulnerable in society, but because it boosts the possibility of more bad consumer debt when all other options are off the table. 

At such radical moves by the establishment, we have to level equally radical demands back at it. The social fund should be immediately reinstated and centralised, so as to avoid the trappings of a postcode lottery. Government needs to reform the fund so it is fit for purpose, helping families in the face of severe financial shocks. Policy makers should seriously consider making the social fund something that operates through a credit union, which would increase credit union funding and do more to highlight its social importance.

This government, the most radical in recent times, is laughing at us, while the media responds painting welfare claimants are feckless. Radical demands from citizens and consumers can and must counteract this, and that time is long due.

Photograph: Getty Images

Carl Packman is a writer, researcher and blogger. He is the author of the forthcoming book Loan Sharks to be released by Searching Finance. He has previously published in the Guardian, Tribune Magazine, The Philosopher's Magazine and the International Journal for Žižek Studies.
 

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The clever ideological trick that could save the Labour party

The Co-operative party could suddenly get a lot more popular. 

It’s do or die for the party’s moderate MPs, who have lost the fight for the soul of Labour and must quickly move on. 

The 172 Labour MPs who backed a no-confidence vote in Jeremy Corbyn earlier this year may not like their newly elected party leader much, but they loathe John McDonnell. 

So it is little surprise that one of them, John Woodcock, reportedly looked “sick to the stomach” when the Shadow Chancellor tenderly invited him for a cuppa in his office following the leadership election result at conference. Reading the tea leaves tells me those talks aren’t going to go well.  

Yet moderate MPs would do well to revisit McDonnell’s off-the-cuff comments from a few years back: “I’m not in the Labour party because I’m a believer of the Labour party as some supreme body or something God-given or anything like that,” he told a small audience in 2012. “It’s a tactic. It’s as simple as that. If it’s no longer a useful vehicle, move on.” 

Two feather-spitting former frontbenchers called for McDonnell’s resignation when these comments emerged in March, saying they revealed his Trotskyist tendencies. "The context (a hard-left gathering) and the company (which included Gerry Downing, expelled from Labour for his comments on 9/11) didn’t make for great publicity, no," a Leader’s Office staffer privately confesses. 

But McDonnell is right: There is nothing necessary, natural or divinely ordained about Labour’s existence lest it can get things done. Which is why the parliamentary Labour party cannot botch its next attempt at power. 

In the wake of Corbyn’s re-election, Labour MPs face a fork-in-the-road: fight this civil war until its bitter end - play the long game, wait until Labour loses the next general election and challenge Corbyn again - or start afresh. 

It is a bleak, binary choice, akin to a doctor delivering test results and declaring the illness is terminal as feared: the patient can go down fighting and die a slow death, notwithstanding a medical miracle, or instead take part in a pioneering new drug trial. This carries the risk of dying immediately but promises the possibility of life as well. Both options are fraught with danger.

The problem with the first option is that moderates have all but lost the party already. A poll reveals Corbyn won 85 per cent - 15 per cent among members who joined after he became party leader and lost 37 per cent - 63 per cent among those who were members of the party before the last general election. The result: victory by 119,000 votes. 

Corbyn has already announced he wants to give these foot soldiers far greater firepower and told Andrew Marr he had asked the NEC to draft plans for increasing the membership and including it in “all aspects of party decision making”. Labour is transitioning apace into a social movement: free of formal hierarchy and ambivalent about parliamentary power. 

So why wait until 2020? There is every chance that MPs won’t any longer have the power to challenge to Corbyn within four years’ time. If Momentum has its way with reselection and shadow cabinet elections, leading rebels may not be around to begin with. 

Even if MPs mount another leadership challenge, few believe organisations like Saving Labour or Labour First could put together a sizeable enough electorate to outgun Corbyn at the ballot box. He would be voted back in by a landslide. 

The alternative is for MPs to create a new centre-left force. The main plan under consideration is to join the Cooperative party, Labour’s sister party, and sit as a bloc of “double hatted” MPs, with their own policy agenda on Brexit and the economy. This new bloc would apply to the Speaker to become the official opposition. 

Plenty of MPs and members recoil at the idea of a semi-split like this because of the mixed message it would send to voters on the doorstep. "So you don’t have faith in Corbyn, but you’re a Co-op MP campaigning on behalf of his Labour?" Many believe a full-split would be worse. They fear being pitted against Corbyn-backed Labour candidates in local constituencies and splitting the left vote, opening the door to Ukip or the Conservatives in marginal seats. 

But if moderate MPs mean what they say when they warn of total electoral wipeout in 2020, risking a new centre-left grouping is intuitively worth it.  What do they have to lose? And how many more times can Labour’s moderates cry wolf - Labour "risks extinction", Sadiq Khan said yesterday - until voters call their bluff and tell them to quit complaining and fall in line behind their leader? 

While Corbyn’s polling remains disastrous, a Co-op/Labour party would boast a mandate of 9.3m people, a policy agenda in line with Britain’s political centre of gravity and a chance of becoming the official opposition: a risk worth taking in the face of electoral oblivion. 

A handful of battle-bruised MPs are talking about coming together. "Time to unite," a deflated Hilary Benn tweeted this weekend. There is a precedent for this: first past the post means the party has always been composed of uneasy coalitions of different groups - take the trade unionists, liberal cosmopolites and ethnic minorities of the New Labour years - and it is arguably no different now.  

Yet this is not about a coalition of diverse interests. It is about two parties within a party, each of which believes Labour is their rightful inheritance. Of the two, moderates are least likely to gain anything by engaging in an all out war. It is time they took a leaf out of McDonnell’s book and accepted it is time, regrettably, "to move on". 

Gabriel Pogrund is a journalist at The Sunday Times and a Google News Fellow 2016.