SNP Reveals Drastic Cuts to Crisis Loans Cash

The UK Government funding provided for people in crisis or emergency situations will be slashed by more than a third when the social fund is devolved next year.

Parliamentary questions reveal over £38 million was awarded to people in need of community care grants and crisis loans in Scotland in 2010/11. Yet only £25 million in funding has been earmarked for the Scottish Government for the same purpose when responsibility is devolved next year – a drop of £13 million or 34%.

The response to questions from SNP Work and Pensions spokesperson Eilidh Whiteford MP also confirmed that the UK government has already applied tighter restrictions to availability of crisis loans prior to the devolving of the funds. Funds are no longer available for items such as beds and cookers, and awards are restricted to three in a 12 month rolling period.

Dr Whiteford said

“At a time of recession when many are struggling with the basic cost of living , such draconian cuts to funding for crisis loans is unbelievable, even from the Tories.

“By their nature crisis loans are a last resort, and it is appalling that the Tory Government are cutting this safety net so drastically. The only winners from this will be loan sharks and high interest lenders.

“They have already reduced the availability of crisis loans for basic items like cookers or beds, affecting thousands of people in poverty across Scotland.

“The SNP supports a fairer, simpler to use welfare system that protects those in need of support and helps people back into work. There is a need for reform, but these draconian cuts undermine the basic principles of the system.

“It’s crucial that genuinely vulnerable individuals must not become an easy target for Conservative and Lib-Dem cuts.

“With further powers over the economy and over the welfare system we could put a stop to the Tories’ dismal decade of cuts, invest in growing our economy, properly support our most vulnerable people and build a better Scotland.“

Text of parliamentary questions and responses:

Crisis Loans

Dr Whiteford: To ask the Secretary of State for Work and Pensions what changes to the eligibility criteria for crisis loans there have been since 2010. [107026]

Steve Webb: Since 2010 the basic eligibility criteria for crisis loans has not changed. A person satisfies the conditions if they are aged 16 or over and are without sufficient resources to meet the immediate short-term needs of themselves or their family.

Changes have however been made that affect the general conditions for an award. These are as follows:

From 4 April 2011 awards for general living expenses, emergency travel expenses and emergency fuel meter credit were restricted to three awards in a rolling 12-month period. This rule does not apply to living expenses given for alignment to benefit purposes, or to rent in advance.

From 4 April 2011 Crisis Loan awards for household items such as cookers and beds can only be made as a consequence of a disaster such as a fire or flood.
(HC Deb, 15 May 2012, c99W)

Social Fund: Scotland

Dr Whiteford: To ask the Secretary of State for Work and Pensions how much his Department spent on (a) community care grants, (b) budgeting loans, (c) crisis loans items, (d) crisis loan living expenses and (e) crisis loan alignments in each region of Scotland in (i) 2009-10 and (ii) 2010-11; and how much he expects to allocate for each purpose in each region of Scotland in (A) 2012-13 and (B) 2013-14. [107024]

Steve Webb: The following tables provide details of the amount spent in each region of Scotland in 2009-10 and 2010-11 on each element of the discretionary Social Fund.

The current scheme will continue for 2012-13. However, under the localisation agenda approximately £25 million will be allocated to Scotland in 2013-14 for the local provision that will replace community care grants and non-alignment crisis loans.