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As Hester still gets £6m bonuses, the utterly destitute lose Social Fund

Occupy protesters in face masksThere are two different universes at Westminster, completely disconnected. One is about Hester who has sacked thousands and still presides over RBS languishing at a share price only half of what taxpayers paid for in the bailout, but who has already on top of his £550,000 salary (£10,575 a week) gained £11m in bonuses and incentives and looks set to pick up another £6m for a fairly unexceptional performance.

The other is about the poorest of the poor – those suddenly struck down by a breakdown or accident beyond their control, or evicted and made homeless, or an abused wife escaping a violent partner, or a man deprived of his job and left penniless by epileptic fits – the causes of human misery are endless – all of whom are about to lose their final lifeline, the Social Fund, which the IDS anti-welfare bill is abolishing. Does one impact on the other? Not for a second.

It’s not as though the Social Fund is a case of egregious generosity profligately thrown at the poor. It is extremely mean, grudgingly parting with far less than the absolute minimum needed for a decent life, just enough to eke out survival – that is if you’re lucky enough to get it. The Social Fund was the creature of the Thatcherites in the 1980s, replacing the previous system of grants for things unavoidably needed like a cooker or a cot, but which could not be afforded on a poverty line benefit. Instead of being determined by need, it was cash-limited and often a loan that had to be repaid, pushing weekly subsistence below the poverty line. Even Thatcher however never proposed abolishing it. But the Coalition is.

The Social Fund is being cut by 39%, and the remaining £178m will then be dispersed to local authorities but, crucially, not ring-fenced. Given the current and future state of Town Hall finances, that means that all, or nearly all, will be diverted to other pressing needs. After all, which local authority will want to establish a reputation for generosity, which will act as an instant magnet for the destitute for miles around? There is not even a requirement on local authorities to report on any loans or grants they may make, so that there is at least some minimum measure of accountability.

So City directors now get on average £1.8m a year (£34,615 a week) and Hester piles another £6m on his mountain of incentives. At the other end the IFS has predicted that another half million more children will be pushed down into povertyas a result of the colossal IDS benefit cuts of £18bn, and to cap it all the Social Fund last and final protection is being swept away. Not exactly all in it together.

One Comment

  1. kate mann says:

    This disgusts me. I am in the position through marriage breakdown of having to claim Jobseeker’s Allowance of 67.50 a week. ALL of this goes on top-up rent, gas and electricity. Fortunately, as my three grown-up sons still live with me, they support me by buying food, clothes, toiletries, and paying the phone bill as well as additional gas during cold periods. I received a meager social fund loan because my washing machine broke down. It wasnt enough to pay for a new one, so i borrowed from friends as well to have enough to buy a second-hand one that worked but has now also broken down.
    I have just been asked to repay the social fund loan at the rate of 20.29 per week. No, not asked, TOLD. It will be taken from my JSA automatically. I’d love the government to explain to me how I should live on 67 a week, never mind 47. Surely this is illegal? Pushing already-destitute people into abject poverty? How on earth can it be justified? Who on earth can people in my position turn to? I dont need money management advice – I need enough to live on!

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