Reform of the Social Fund

The Social Fund is a statutory fund that makes loans and grants to people on low incomes receiving certain benefits. It is designed to meet one-off or emergency payments, such as replacing broken household appliances or to help with the costs of a new baby. Family Action has long argued for a reform of the Social Fund in order that:

The eligibility criteria for applying to the Social Fund are more flexible
More money is made available through grants, one-off payments and no-interest loans so that people are not forced to turn to very expensive or possibly criminal lenders which can drive them into further debt
More information is readily available about the Social Fund to those that need it

You can read an article on Social Fund reform by Rhian Beynon, Head of Policy & Campaigns, in the Journal of the Centre for Responsible Credit

Our campaigning activity on the Social Fund has been informed by our recent learning from the Families in Crisis grants scheme which we administered in 2009 in partnership with Save the Children and British Gas. The scheme gave money to hundreds of families who were struggling in the recession to help pay for basic essentials.

The Families in Crisis grants scheme is now closed. Findings gathered during the scheme were published in a report which recommended reform of the Social Fund by increasing funding and access to the fund, and extending eligibility to those on Working Tax Credit. Specifically:

There should be a strategy for Job Centres signposting Social Fund applicants who are unsuccessful to other sources of advice and assistance
People with children working 16 hours or less are not eligible for the Working Tax Credit or assistance from the Social Fund. Until the rules are changed to make them eligible for WTC they should be made eligible for at least one grant from the Social Fund to help them buy children’s clothing or essential household goods. This could be done for a time limited period.
All low-income families moving into unfurnished accommodation should be guaranteed at least one grant to help them with a fridge, cooker, curtains or carpet. At the very least, all low-income parents setting up a second home with children because they are fleeing domestic violence should be guaranteed one such grant.

Download the final Families in Crisis report and recommendations

Over 80% of applicants to the grants scheme were from lone parent families, and sickness, disability, mental health problems and other health issues were a factor for at least one family member in nearly half the families applying for help. The vast majority were also unemployed, and large numbers of applicants had been affected by domestic violence. These facts illustrate the many and various disadvantages which the poorest families in the UK face.

To find out about the other grants which Family Action administers, please go to our Grants page.

Back to School Costs

As part of the Families in Crisis grants scheme, we received large numbers of applications from parents seeking financial help to meet the costs of school uniforms. In August 2009 we conducted a poll with Save the Children which revealed that over half of UK parents surveyed (51%) with an income below £30,000 couldn’t afford everything their children needed for the start of the new school year. For parents on incomes below £12,000 a year that figure rose to 59%. The average income for the UK is £28,000.

Over a quarter of respondents (26%) said they would have to borrow money. According to Government figures households on a low income will have to find over £600 to get their child through primary school each year and by the time they get to secondary school those costs have topped a £1000 a year. Research has shown that almost 57% of local councils no longer provide clothing grants that many low-income families rely upon to buy school uniforms with – despite the 1996 Education Act requiring councils to help families afford school uniforms so children aren’t disadvantaged.

"“The start of term should be an exciting time when parents and children look forward to the future – not one they dread for fear of getting into deeper debt.”

Helen Dent, CEO of Family Action

Read about the story on the Guardian’s website.

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 1063 parents with a net-household income of less than £30,000. Fieldwork was undertaken between 6th - 11th August 2009. The survey was carried out online.

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