Crisis Loan Funding

Debate between Andrew Smith and Maria Miller

Tuesday 19th June 2012 Westminster Hall

[Maria Miller]

The hon. Lady needs to accept that if we open up the benefit gateway in such a way as to make it difficult to manage or police, it is entirely unsurprising if we see a significant increase in the level of demand. I take her back to one of my earlier comments about the nature of that increase. It is among a very distinct and particular set of people. It is not at all representative of any increase or changes in the nature of those claiming benefits in total.

In 2011, some 17,000 people received 10 or more crisis loans in a 12-month period. Crisis loans are about preventing serious risks to health or safety or about an emergency. Is it entirely possible that an individual could be in such serious risk and danger over such a prolonged period of time? The hon. Lady must agree that some urgent change is required here. As this is cash limited, any shortfall that is created would have had to be met from the budgeting loan scheme, which would have meant less money for those people who were trying to regulate their borrowing in a responsible way.

[Mr Andrew Smith]

In the time that remains, will the Minister address another important point that the hon. Member for Banff and Buchan (Dr Whiteford) raised about what safeguards there will be to ensure that vulnerable people who need this support actually get it from local authorities and that other local pressures do not absorb the money?

[Maria Miller]

The right hon. Gentleman neatly brings me on to my next point. Although there is no need for any new statutory duties on local authorities and the money will not be ring-fenced, the money will be sent out via a specific identifiable grant and it will be accompanied by a settlement letter that will set out what the funding will be used for and the underlying principles, and it will describe the outcomes that must be achieved. The funding will concentrate on providing resources for those facing the greatest difficulty in managing their income and it will enable more flexible responses at a local level. The letter will be explicit that the funding is to provide a replacement provision for community care grants and general living expense crisis loans. It will set out the sort of detail that the right hon. Gentleman and the hon. Lady are looking for to ensure that the most vulnerable people in our society get the support that they need.