Since the 1930s there has been provision in Britain's social security system for relief of the “exceptional” or “special” expenses faced by benefit claimants. While those payments have changed over the years, for the past two decades they have been relieved through payments from the discretionary social fund (“SF”), a cash-limited means of relief that makes the majority of its payments as loans that are repaid primarily from benefit income. However, the Conservative-led Coalition Government (“CLCG”) has announced the fund's abolition and replacement by a bifurcated approach that will allow for the automation of some of its payments (those that are deemed to require little discretion) and the localisation of those that are held to require the exercise of discretion. This article
critically examines this proposal by placing it, first, in the context of the approach to the SF of 1997-2010 Labour governments and, secondly, in the arguments of the Conservative-led Coalition Government that Britain is over-burdened by welfare interventions, particularly those provided by the central state. The article argues that while the SF is a fundamentally flawed means of relieving the
“exceptional expenses” of benefit claimants, its proposed replacement by a “localised” approach is likely to be even more problematic.