First published in Canvas: 1st July 2012
It appears likely that welfare benefits in Britain may transfer from a cash payment system to a voucher system. In a major speech delivered at Bluewater Shopping Centre in Kent on June 27, David Cameron outlined ‘questions’ that needed to be included in the ongoing debate over welfare reform. Among them; whether school leavers should be allowed benefits; whether ex-patriots should be paid non-contributory benefits; and whether welfare benefits should continue to be paid in cash, or ‘in kind, like free school meals.’1
Issues surrounding the suitability of vouchers as a delivery service for welfare benefits remain pertinent, particularly for recipients who are already in employment and are in need of short term assistance. Since 2010, the Coalition has arranged that low income families who are refused crisis loans from the Department of Work and Pensions be given vouchers, redeemable at the Trussell Trust, a charity that distributes food parcels. The food is donated via donations made by supermarket shoppers from a predefined shopping list of rice, pasta, jam, biscuits, powdered potatoes, tinned fish, pasta sauce and other staples – but no fresh meat, bread, milk or vegetables. A total of nine vouchers can be issued to a family per year, and is designed to feed a family of four for three days.
Aside from debates about the suitability of such a scheme, it is the motivation behind the move to vouchers that more revealing. Though the Trussell Trust describes itself as a ‘apolitical Christian charity,’ it is in fact controlled by Neil Atkins, Conservative Party Councillor and Mayor of Worthing, and Chris Mould of the Shaftesbury Partnership, an organisation which defines itself as a ‘social business’ committed to ’21st Century social reform.’ The co-founder of the Shaftesbury Partnership was Nat Wei, an experienced in venture capitalist who appointed Chief Advisor on the ‘Big Society’ in May 2010. Also involved are Dominic Llywellyn, a Conservative Party Candidate at the 201 election, who co-authored many of the current Big Society policies, and Anthony Hawkins, who planned the implementation of Conservative policies in the Get Britain Working Manifesto.’2
The Trussell Trust Food Banks are proving to be highly profitable. The only organisation of its kind, there are now over 200 operating across Britain, with 128,967 using them in 2011. Experts predict that this figure will rise to half a million by 2015. Much of this growth is attributable to the Trust actively courting church organisations to set up banks. Prospective organisations pay £1500 in set-up fees plus a ‘small annual donation,’ and can expect to face costs between £10,000 and £18,000 a year. They must also use the Trussell Trust Branding. ‘Starting a food bank,” the Trust website claims, “is a great way to help those in crisis in your own community, by providing boxes of nutritionally balanced food and support. The food bank collects tinned and dried food from the public at supermarkets, churches, schools and other local groups.’3
The success of Trust contrasts with the ongoing debate regarding the future of DWP crisis loans. Currently, they are small interest free loans from the Discretionary Social Fund to people who find themselves in a financial crisis due to unforeseen circumstances. n 2010-2011, a total of 2,697,000 crisis loans were given out by the DWP at a total cost of £228 million. Yet the government plans to strip Discretionary Social Fund expenditure back to 2005-06 levels and devolve responsibility for its delivery to local authorities, the overwhelming majority of whom expect to revert to voucher delivery systems. ‘We’re reforming the social fund,’ a DWP spokesperson claimed in January 2012, ‘because it is too complex and poorly targeted. Local authorities are best placed to deliver this support and will ensure that it goes to those most in need. People will now benefit from local knowledge and wider support services.”4
The consequences of reform were outlined in a report ‘Delivering the Social Fund at London Level,’ released by the Child Poverty Action Group published in June 2012. Factors affecting the transition included the impact of future benefit cuts, changes to disability benefits that would see residents lose access to the contributory employment and support allowance and the disability living allowance, and any problems that might arise in the transfer to a universal credit system. The report also claims that authorities are likely to impose local connection eligibility rules based on length of residency, which may drive those rejected into the arms of loan sharks. Alarmingly, it also states that the cost of administrating local social funds could reach up to 20% of its entire value, and be far more costly than the current centralised DWP model.5
Given the cost of administrating a voucher scheme, vital questions regarding the status of the Trussell Trust remain unanswered. Why is the government committed to directing people to the Trussell Trust rather than supermarkets, where a wider choice of food exists. Will the government continue to champion the Trussell Trust once responsibility for the Social Fund has been devolved? Most important, is how can the Trust, as a charitable organisation, possibly match the increase in demand? Currently clients can receive a maximum of three boxes in a session, before they are referred on to Citizen’s Advice or other aid agencies. In the last year, the Trust has seen a large rise in repeat customers, and an average of two new banks are being set up a week.6
There are alternatives.The CPAG report claims that one authority contacted claimed that it will opt to use payment cards with local supermarkets – Sainsbury’s and Tesco – which are centrally located within its borough. It believed that use of these cards would not be stigmatising and also emphasised that they could restrict expenditure on these so as not to allow the purchase of cigarettes or alcohol. Other key considerations included whether cards would look like normal store cards, the extent of choice given to claimants (the government classifies luxuries as items that are liable to VAT, including toothpaste, peanuts, crisps and chocolate biscuits), whether claimants would be able to receive change, or shop around to ensure that they get the best value.
While these ideas are preferable to the Trussell Trust, the introduction of any voucher scheme is a stigmatisation that separates claimants from non-claimants, and could discourage those who are in need of help from applying. Links between the government and the Trussell Trust indicate a strong bias towards favoured providers over the interests of the public. The large costs involved in setting up and maintaining a Trust food bank suggests that profit is being made at the expense of those who wish to help those in need. In the case of short term loans for families on low incomes, a straight forward cash payment is better for all.