Scottish Welfare Fund review: final report

9. The impact of Covid-19 on the Fund

Key points

• Demand for Crisis Grants – both overall and level of repeat applications – increased significantly between 2019/20 and 2020/21. In contrast, demand for Community Care Grants fell initially during the first lockdown.
• There was an acceleration of the existing trend towards more online applications in 2020/21.
• Spending on the Fund increased by 31% from 2019/20 to 2020/21, although overall spending fell short of the expanded budget, which was increased by £22 million to meet additional need during the pandemic.
• Local authorities reported significant resourcing pressures on their teams, as a result of the large increase in Crisis Grant applications combined with the delivery of SISGs.
• Overall decision times did not change much between 2019/20 and 2020/21. However, it was suggested that the large increase in SISG applications later in the pandemic (in late 2021/early 2022) may have impacted negatively on Community Care Grant timings in particular – this is supported by data for the first quarter of 2022.
• Award success rates for both grant types, but particularly Crisis Grants, were higher during 2020/21 compared with 2019/20. This is likely to reflect additional funding enabling local authorities to operate at a lower priority level.
• There were mixed views and evidence on whether these impacts were purely short-term or were likely to persist longer-term:
  • As of 2021/22, application levels had not returned to pre-Covid levels. There was a perception among local authorities that the relaxation of rules around maximum grants had in itself encouraged more repeat applicants.
  • SWF teams were still reported to be under considerable pressure to deliver within timescales, associated with ongoing high demand and perceived inadequate administration funding.
  • There was a perception among some external stakeholders that the accelerated shift to online applications during the pandemic had become a longer-term shift away from offering alternative application and support routes.
• Reflecting on lessons for future emergency situations, it was suggested that any grants which – like SISGs – operate on an entitlement rather than a discretionary model should be delivered centrally rather than by adding them on to existing local, discretionary schemes.

The review of the SWF was conducted in 2022, in the aftermath of two years of Covid-19 pandemic and related restrictions, the consequences of which for individuals and society were far-reaching. As discussed previously, the direct implications for the SWF included a £22 million budget increase in 2020/21 and a temporary relaxation of the three awards per year limit. At the same time, the restrictions in place during 2020 and 2021 (including restrictions on evictions and house moves), the numbers of people on furlough or self-isolating at different points, and other interventions relating to Covid-19 (such as efforts to accommodate all rough sleepers) might be expected to have impacted on demand for the Fund in various ways.

This final chapter summarises findings on how the Covid-19 pandemic impacted on the operation and delivery of the Fund. It considers the extent to which any impacts were likely to be short-term and might be expected to dissipate as Scotland moves through the pandemic recovery phase, or whether some impacts might have longer-term implications for the Fund.

Impact on number and type of applications

Number of applications

• The first year of the Covid-19 pandemic (2020/21) saw a significant increase in demand for Crisis Grants – there was a 22% increase in applications between 2019/20 and 2020/21 (up from 222,060 to 271,295) compared with a 15% increase from 2018/19 to 2019/20 (193,310).
• In contrast, although Community Care Grant applications also increased (by 8% from 2019/20 to 2020/21), this was at a lower level compared with the increase from 2018/19 to 2019/20 (10%). The Covid-19 related restrictions in place during the first Covid lockdown, from April 2020, dramatically reduced the number of people being made homeless or moving house over that period. This was reflected in a significant reduction of Community Care Grant expenditure during that period, alongside a significant peak in Crisis Grant spending.
• Repeat applications to the Fund also increased, particularly for Crisis Grants – from 67% of Crisis Grant applications in 2019/20 to 71% in 2020/21 (having increased more gradually, from 65% to 67% in the previous three years from 2017/18).

Reasons for applications

• Analysis of changes in the reasons for applying to the Fund during 2020/21 indicated that:

• Between April and June 2020 planned re-settlement after an unsettled period dropped to just 4% of reasons for a Community Care Grant application, from 10% the previous quarter, recovering back to 10% by January to March 2021. This is likely to be due to the reduction in homeless applications over the early pandemic period, when significant efforts were made to provide accommodation for all rough sleepers, as well as impacts from restrictions on evictions and house moves.
• From January to March 2020 onwards, the number of applications for Community Care Grants to help people stay in the community fell from 36% of reasons in January to March 2020, to 29% by the same quarter of 2021.
• For Crisis Grants, there was a reduction in the proportion of applications due to 'benefits of income spent' and an increase in the proportion of 'other reasons' between January and March 2020 and the same period in 2021. This may reflect the Universal Credit uplift that applied during this period, as well as the use of 'other reasons' to cover additional financial crises occurring during the pandemic, such as reduced hours or unexpected income gaps.

Application mode

There had already been a significant shift towards online applications pre-pandemic, and there was a further 10 percentage point shift to online during 2020/21.

One view among local authorities was that the accelerated shift towards online applications during the pandemic had resulted in a weakened link between SWF teams and the community of applicants, with far fewer people coming into offices compared with pre-pandemic:

"It [Covid-19] has impacted on our community link. People who are lost well we need to find them, and people who know where they are going, we need to help them along."

(Local Authority manager 21)

Impacts on local authorities' capacity to deliver the Fund

Resourcing

As discussed in chapter 4, expenditure on the Fund increased considerably in 2020/21, by 31% compared with 2019/20. However, as £22 million additional funding was provided that year by the Scottish Government, overall the proportion of allocated funding spent was lower compared with pre-pandemic (83% of allocated funding was spent, compared with 108% in 2019/20).

At the same time, although overall local authorities underspent on grant funding during 2020/21, there was a strong perception from local authority managers that administrative funding and resources had come under very severe pressure as a result of the combination of large increases in Crisis Grant applications, discussed above, and the delivery of SISGs. Both managers and delivery teams reported that teams' resources were often spread very thin, resulting in staff absences as well as high staff turnover due to burnout, which in turn put more pressure on other staff.

Local authority managers described having to pull staff from other departments or other projects to work on the SWF. This in turn impacted on other work demands. It was not always clear how these resource allocations were funded, but some local authorities stated that these costs were absorbed within the council and were not covered by Scottish Government SWF funding.

A more exceptional experience, however, was that the additional funding and relaxation of some of the restrictions on SWF grants during Covid-19 meant that decision-making was easier, such that although decision-makers were dealing with more applications, this was not necessarily taking them much more time.

In spite of these resourcing challenges, local authorities spoke about the increases in funding being extremely beneficial overall, enabling the SWF to reach a far greater number of people and to make grants at a lower priority level.

Decision times

The management data indicates a very slight decrease in the proportion of Crisis Grants made within the target time between January and March 2020 and January and March 2021 (from 94% to 93%), but no change in the proportion of Community Care Grants decided within the target time (81% in both periods).

This picture conflicts somewhat with the accounts of local authority managers, who felt that the additional demand placed on teams by the volume of Crisis Grant applications and by delivery of SISGs had sometimes led to Community Care Grant timings being deprioritised over this period. However, these impacts may have been more apparent in the later period of the pandemic – local authority managers noted that SISG applications had increased significantly in the wake of the Omicron wave of Covid-19 in late 2021 to early 2022:

"As Crisis Grants are highest priority, during peak times in the pandemic, community care processing all but stopped."

(Local Authority manager 17)

Indeed more recent figures indicated a fall in the proportion of Community Care Grants processed within 15 days, to 77% between January and March 2022, though this figure recovered (to 87%) the following quarter.^[68] Despite the increases in pressure, which managers felt had been very considerable for SWF teams, most local authorities took pride in having (largely) been able to administer Crisis Grants within the prescribed timescales during the pandemic.

Success rates and decision-making

Award success rates for both Community Care Grants and Crisis Grants, which had been reducing in the years before the pandemic, both increased from 2019/20 to 2020/21 – from 54% to 57% for Community Care Grants, and from 63% to 69% for Crisis Grants. This is likely to reflect the comment above, that local authorities were able to make decisions at a lower priority level as a result of the additional funding provided.

In terms of consistency of approaches to decisions during the pandemic, the SPSO noted some challenges around applying the 'exceptional circumstances' or 'exceptional pressure' criteria during the pandemic. On the one hand, it was suggested that some of the early pandemic messaging from the Scottish Government was interpreted differently by different councils, with some viewing the pandemic itself as constituting 'exceptional circumstances' and others linking it more specifically to individual financial circumstances. On the other, the SPSO felt that some councils had not always consistently factored in the impact of the pandemic into determining whether people were facing 'exceptional pressure'. They gave examples of a support worker being unable to attend during the pandemic, or a household being unable to use the laundrette because of pandemic restrictions, meaning that households that might not ordinarily qualify ought to be eligible or items that might not meet the necessary priority level ought to be granted.

Local authority managers noted the challenge of dealing with more frequent updates and changes to advice on the Fund during the pandemic period. This had put additional pressures on teams as they had to constantly refresh training to keep up with new guidelines.

Short or long-term impacts?

There were mixed views among local authorities on whether or not the impacts discussed above were purely short-term, or whether some might have longer-term implications for delivery of the Fund.

Application levels, expenditure and outcomes

As of 2021/22, application levels to the SWF had not returned to pre-Covid levels. Moreover, repeat Crisis Grant applications increased further – from 71% in 2020/21 to 80% of Crisis Grant applications in 2021/22. Alongside ongoing pressures around the cost of living, there was a perception among local authority managers and staff that the relaxation of the maximum number of grants that could be awarded in a year during 2020/21 may have had a longer-term impact on demand by encouraging more repeat applications.

The fact that application levels had not dropped back to pre-Covid levels, but the additional Covid-related funding was no longer available, was associated with significant overspend in 2021/22 (115%), as reported in chapter 4. A local authority delivery team highlighted that in the most recent year, a lot of people had qualified for Covid Recovery Grants, which had helped reduce pressure on Crisis Grants, but this was also now coming to an end.

Success rates for applications also fell back again in 2021/22 – from 69% to 66% for Crisis Grants (though this remained slightly higher than the 2019/20 rate of 63%), and from 57% to 55% for Community Care Grants (similar to the 54% rate in 2019/20).

SWF team resourcing and pressure

Although the pressures associated with delivering SISGs were coming to an end, the fact that application levels remained high meant that many local authorities reported their teams remained under considerable pressure to deliver SWF grants within the current timescales. As discussed in chapter 4, this was linked with a strong belief that the amount of funding for administering the Fund was inadequate.

However, the reallocation of resources from elsewhere in the Council to accommodate SISGs and increased demand was seen as having fostered greater collaboration with colleagues from other departments within the council, with ongoing benefits in terms of strengthened networks.

Application options

There was a perception among some external stakeholders that the shift towards online assessment during the pandemic had become a longer-term shift away from providing alternative application options or support to SWF applicants.

"It's a long-term thing but sometimes it's used as an excuse…you can't phone now and I don't see why."

(External local stakeholder 16)

Lessons for distributing emergency funding in future crises

In terms of distributing resources to support people in future national crisis situations, in general the allocation of extra funding to the SWF was seen as a logical route, since it allowed for funds to be paid out quickly and easily and there was a perception that most people in need will approach their local authority in the first instance. However, there was a strong view that this would need to be supported by additional administrative resource.

Another view was that SWF as currently configured was not a completely 'natural fit' for SISGs, since unlike Crisis Grants, they were fixed value, were available to a widened pool of 'low income' households, and were not paid out at the point of application, but when the applicant experienced a reduction in income. It was suggested by some local authority managers that additional grants like SISGs – which operate on more of an entitlement model rather than being discretionary – should be delivered centrally in the event that something similar is needed in the future.