Gareth Hughes smells a rat in Westminster offloading responsibility for the social fund

February 21st, 2012

Unusually the government in Westminster wants to give Wales more powers. Powers indeed that the Assembly hasn’t sought and, as yet, hasn’t decided whether or not to accept. This is a first in Wales’s constitutional history, Westminster voluntarily giving up its hold on power, without the troublesome Celts demanding control.

If you were a cynic you might suggest that something was amiss. Strangely, you’d be right. It doesn’t take a constitutional expert to smell a rat.

What is this monumental piece of devolution, you may ask? Well, its control over the social fund. The social fund is part of the social security budget that is used to provide emergency cash to people who are in a desperate need. It’s regarded as last resort money. It’s a fund that is cash limited. The cash has never been enough to meet the needs and once it’s run out, that’s it, no help until the pot is renewed the next financial year.

Last year the fund paid out £9.8 million to 93,000 claimants in Wales, nearly 75,000 needing crisis loans and the other 18,000 or so wanting community care grants. But the decision to pass it on to the Assembly is not a straight forward transfer of existing resources. Oh no, they’re cutting down the fund by a massive 10 per cent.

Last week Mark Drakeford Labour AM for Cardiff West hosted a discussion with voluntary groups to gauge opinion from the sector. Should the Welsh Government accept the responsibility or not? He indicated it was a bit of a cleft stick. If the Welsh Government refused to take over responsibility there was every chance that the Westminster Government might scrap the scheme altogether for Wales. The poor would then have had another prop taken away.

As Drakeford put it, “These crisis loans are available only when a person has insufficient resources to prevent a serious risk to health or safety to themselves or their family.”

The Welsh Government is now consulting on whether or not it should take responsibility for the scheme and if it does, what kind of scheme it should be. One of the ideas put forward at last week’s meeting was that it could be run as a loans scheme through Credit Unions. By going down this route, the funds could be recycled and the pot over time will get larger as loans are repaid and the fund is added to each year.

It is highly likely that the Welsh Government will accept responsibility even though it’s a bit of a poisoned chalice. There does seem to be a pattern developing here. Central government is shedding its responsibilities without a care for the consequences. This latest proposal follows the intention of abolishing national council tax benefit and localising the support for council tax payers.

Currently that relief is about £600 million and it is thought that there is another £100 million unclaimed. Again the transfer from the centre to Wales will see another 10 per cent cut in the budget.

It seems that the Westminster Government has cottoned onto the fact that one way of hiding it’s cuts agenda is to transfer the responsibility to the devolved administrations – but with less cash following the transfer. Result, the Assembly gets the rap when Joe Public is short changed. In the immortal words of Black Adder, “a cunning little plan.”

Tags: , , ,

Gareth Hughes is a freelance journalist and political commentator who blogs here

One Response to:“Cleft stick for Welsh Government”

  1. Jon Jones says:

    A cunning plan indeed. The Labour party in the UK and the Conservative and…one time “Unionist Party” are fighting their ideological battle in Wales. The key to the Tory plan is “No power without responsibility” in Wales. The objective is to see Wales fail disasterously in the Health Service, Education and Social care. Labour on the other hand is desperate for Wales to succeed with an alternative, inclusive and quasi-socialist political model.

    As long as the Torys have the purse strings then the odds are stacked but Carwyn is going to have to trim some pet projects to make sure key services improve.

    (Report comment)

Have your say

Please let us know in your message if you do not want the IWA to contact you in future or related IWA activity.