Birmingham's controversial new Asda cards for the poor are humiliating, stigmatising and socially marginalising, says Chris Game.
Two Japanese colleagues visiting us recently at Birmingham University included among their ‘etiquette gifts’ a set of ‘prefecture stamps’ – postage stamps produced to promote local government in the various prefectures that are the equivalent of our counties.
The stamps were easy to admire, and we inevitably wondered out loud how much Birmingham might pay for a similar Post Office issue.
Not out loud, I also contemplated mentioning that by coincidence some of our local authorities, too, would be launching their own stamps this week. But, with these being not pretty promotional ones, but wartime-echoing food stamps, I decided against it. But I will do here.
So many welfare and tax changes are being introduced at the start of this financial year that it’s not surprising that the abolition or localisation of much of the Discretionary Social Fund (DSF) – a small but vital part of the total welfare system – has received less attention than it might have otherwise.
However, with Birmingham being one of the most economically deprived local authorities in the country, whatever provisions were made for the DSF’s replacement would be important and would need publicising.
As it is, the city council’s chosen solution and particularly its ‘Asda deal’ have already attracted national media attention, prompting in turn a public defence by the cabinet member for social cohesion and equalities, Councillor John Cotton. So, whatever your view of it, the one thing this policy won’t lack is publicity.
The Social Fund was set up in the 1980s, to provide interest-free loans and grants through both a regulated scheme and a cash-limited discretionary scheme. There are four regulated fund payments: cold weather, winter fuel and funeral payments, and Sure Start maternity grants. These will continue, and the Social Fund itself, therefore, is not being abolished.
The discretionary scheme, functionally the final welfare safety net, comprises three distinct elements. Budgeting Loans, the largest element, are interest-free loans to help people on benefits pay for essentials like furniture, household equipment or clothing, without turning to loan sharks.
Community Care Grants are non-repayable grants to help vulnerable people on income-related benefits – young people leaving foster care, women fleeing from domestic violence – to return to or remain in the community, or to ease exceptional pressure following a family breakdown or other emergency.
Crisis Loans are modest, interest-free loans available to anyone who, following an unforeseen emergency or disaster, can show that they or their family cannot meet immediate needs and would otherwise face serious risk to their health or safety. Loans are restricted to essential items.
All three elements of the DSF will change, but in different ways. Budgeting Loans will become Budgeting Advances, still provided by the Department for Work and Pensions (DWP), and, for those eligible, will be incorporated into Universal Credit.
The other two – Community Care Grants and Crisis Loans – are being abolished, with funding going to local authorities to enable them to provide new locally-administered assistance to vulnerable groups, under existing powers.
Those last three words are crucial. They mean that councils have no new statutory duty to provide any specific form of support, for some of the poorest and most marginalised members of our society, out of funding that is not ‘ring-fenced’, and while their diminishing resources are already desperately stretched.
Ministerial guidance to councils is expressed in impeccable localist rhetoric. “It would not be appropriate to place a new duty on local authorities. You need to be able to flex the new provision you are planning in a way that is suitable to meet the needs of your local communities.”
Even Ministers, though, acknowledge that it’s primarily about savings, not ‘flexing provision’. Their real message is that ‘we’ll give you less money, so you must be even tougher that we in central government have been’. And by the way, we no longer accept any responsibility for this ultimate safety net of our supposedly national welfare system.
It’s similar to what’s happening with Council Tax Benefit: systems run by the DWP being transferred to local authorities, but with significant reductions in funding and minimal preparation time.
In both cases, localisation is a good principle which in time should provide more efficient, more responsive and more integrated services for residents.
But in Birmingham the council has had to devise and launch a scheme of ‘back-stop’ local welfare provision, with all its attendant considerations – eligibility rules, forms of assistance, advice to unsuccessful applicants, appeals procedures – with ‘start-up’ funding of around £61,000.
Naturally, councils have been ‘flexing’ their own schemes and coming up with differing solutions. Some will issue charity food parcels; others will give grants to enable food banks to employ full-time staff and extend opening hours. A minority will provide cash payments for specified emergency items, or offer low-interest loans with credit unions.
Most, though, have opted, more or less reluctantly, for what seem bound to become known generically as ‘food stamps’: not cash loans, but one-off vouchers redeemable for a list of approved goods, such as food and nappies.
Birmingham’s scheme is outlined in a 13-page/slide publication – Local Welfare Provision (LWP): What is happening in Birmingham from April 2013? – that on page three announces, in the boldest type: “There will be no cash alternative as part of the LWP scheme”.
Instead, there will be, for successful cash-strapped applicants moving into Independent Living, basic furniture and white goods. And for applicants “in crisis”, pre-paid Asda cards, enabling the purchase of emergency food and essentials.
Birmingham is currently the only authority to have brokered this kind of single supermarket partnership, and maybe we should applaud its enterprise. Personally, I fear it will quickly acquire a very sticky tag of being ‘the Asda council’, and I hope those involved will feel it was worth it – both the Asda bit, and the sacrificed principle.
For there is a fundamental difference between even condition-laden cash grants or loans and cards, vouchers or stamps that can only be exchanged where and for what the awarding authority decrees.
Cards can be infuriating, for, as asylum seekers will testify, not even Asda stocks all the ‘foods and essentials’ one might want, at the cheapest obtainable prices. But, worse, cards are humiliating, stigmatising, socially marginalising, and ultimately infantilising.
That a Labour council and cabinet should brush aside such principles without, reportedly, even a vigorous debate seems almost as dispiriting as the need for the cards in the first place.
* Chris Game, Institute of Local Government Studies at the University of Birmingham