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Updated 8 January 2013

Social Fund reform

Changes contained in the Welfare Reform Act 2012 mean that certain elements of the discretionary Social Fund scheme will be abolished in April 2013. New locally based provision will be delivered by local authorities in England and devolved to the Governments of Scotland and Wales. This page provides information and updates on the Social Fund reforms:

This page will be updated regularly as we move towards implementation.

The reforms

Community Care Grants and Crisis Loans

Community Care Grants and Crisis Loans for general living expenses (including rent in advance) will be abolished from April 2013. New local provision will be administered by local authorities in England and the devolved administrations in Scotland and Wales.

Crisis Loan Alignment Payments

From April 2013 Crisis Loan alignment payments and other Crisis Loans paid due to issues with benefit will be replaced by a new national scheme of Short Term Advances. This will be administered by the Department for Work and Pensions.

Budgeting Loans

Budgeting Loans will continue to be available until Universal Credit is fully rolled out. As people migrate across to Universal Credit they will have access to a new system of Budgeting Advances that will replace Budgeting Loans for Universal Credit recipients.

Background and Consultation

Social Fund reform, part of the wider welfare reforms, is at the heart of the Government’s plans for localism.

The reform proposals were set out in the Government’s Welfare Reform White Paper "Universal Credit: welfare that works", published on the 11 November 2010.

The Welfare Reform Act included powers to end the discretionary elements of the Social Fund.

In February 2011 the Department for Work and Pensions and the Department for Communities and Local Government published a joint call for evidence on the design and delivery of Local Welfare Assistance in England:

The Government published its response on 23 June 2011, including local authority level information on the Social Fund which provided a better understanding of how the fund operates in each local area:

Useful documents and guidance on the current scheme

Local authority fieldwork

Following publication of the Government response to the call for evidence officials from the Department visited over 50 local authorities to discuss progress on early planning. The summary report of the meetings may be a helpful source for authorities in their planning.

Local authorities may also find the following DWP research reports useful:

Social Fund Guide

This guide contains the Secretary of State's directions and guidance. It is used by Jobcentre Plus Decision Makers and Independent Social Fund Inspectors.

Social Fund Annual Reports

The Secretary of State produces an annual report on the Social Fund.

Recent activity and updates

The Department for Work and Pensions held a series of workshops in spring 2012 attended by over 150 local authorities to discuss their planning for the new provision. A list of those authorities that attended is here:

The two follow up workshops held in London and Leeds considered 3 areas local authorities identified as essential to the implementation of their local provision.

The Department held a second series of workshops with Upper Tier local authorities across England over the period 20 September – 8 November 2012. The aim of these was to:

The Department has also had ongoing engagement with the devolved administrations in Scotland and Wales and other key stakeholders.


The Scottish Government is intending to introduce the Scottish Welfare Fund. The fund will be held nationally with overarching guidance on criteria but administered by local authorities with a degree local discretion. It will provide Community Care Grants and Crisis Grants.

UK Ministers have agreed with the Scottish Government that the amendment required to devolve competence to administer this scheme is acceptable in policy terms via a s30 order. The Order is subject to clearance by both the UK and Scottish Parliaments.


Following a period of consultation, the Welsh Government has recently announced that Northgate Public Services has been awarded the contract to deliver the Welsh Social Fund nationally for two years, in partnership with Family Fund Trading and Wrexham County Borough Council. They will offer Emergency Assistance Grants and link with credit unions to offer loans for those that aren't eligible for their scheme.


Discretionary Social Fund: 2012/13 Budget Allocations

On 26 March 2012 the Government announced the 2012 – 2013 Discretionary Social Fund Budget Allocations.

Following a review in 2011,  the methodology for distributing the Community Care Grant budget to 23 Budget Areas around Great Britain was adjusted to ensure  that the £141million national CCG budget was distributed more fairly and to move to the optimal funding position for the new locally based service from 2013. The following document, deposited by the Minister for Pensions in the Parliamentary libraries, provides details of the 2012 – 2013 allocations.

Settlement Letter

The Department for Work and Pensions has now provided details of the funds to be transferred to upper tier local authorities in England and to the Scottish and Welsh Governments.

A letter went to each Chief Executive of upper tier English local authorities and to the First Ministers for Scotland and Wales on 6 August 2012. It outlined indicative figures for programme, administration and set up funding for each area for the years 2013-14 and 2014-15. The figures for 2014-15 were indicative because DWP intends to base the final figures for 2014-15 on discretionary Social Fund spend in each area in 2012 – 2013. This data will not be available to the Department until after April 2013 so we will write to local authorities in Autumn 2013 to inform them of their programme funding for 2014-15. The figures for 2013-14 will remain the same.

A copy of the Settlement Letter that went out in August and in December, a table of the budgets allocated and a Frequently Asked Questions (FAQs) document can be found below. The date for the transfer of funding will be confirmed as soon as possible.

Data sharing

To further support local authority and devolved nation planning the Department has provided more data on current Social Fund demand. This outlines yearly and monthly trends, legitimate demand and a more detailed breakdown of awards by local authority area.

We have also developed an explanatory question and answer fact sheet on the current Crisis Loan for Living Expenses and Community Care Grant Schemes and an information sheet on future Budgeting and Short Term Advances.

The Department is continuing work to scope the legal and technical feasibility and options for sharing live benefit data through access to the Customer Information System (CIS) – the computer system through which local authorities can access claimant information.


We have developed a communications toolkit that Local authorities may find helpful when developing their own local communications strategies.

We are also developing a Customer Communications Plan setting out the messages and mechanisms for informing DWP customers of the abolition of Crisis Loans and Community Care Grants from 1 April 2013. The aim is to start telling enquirers about the forthcoming changes from February 2013.

We would like to draw your attention to the Knowledge Hub, an interactive tool that forms part of the new integrated online offer from the Local Government Association and provides tools to help people connect, share and learn from each other. A local welfare assistance network has been set up on the Knowledge Hub to enable officers implementing local welfare assistance schemes to share information and best practice.

Further information

If you have any questions about local assistance or suggestions on how we could improve the information on this page please contact us at: