The following are extracts from a speech from Department for Work and Pensions Minister James Plaskitt, to delegates at a National Housing Federation conference in London:
"The Government is a large scale provider of affordable credit to people on benefits and in need. In fact, the Government is a provider of interest free credit to thousands of people through the Social Fund. Reform of the Social Fund is an area that I also have Ministerial responsibility for.
"At present the scheme does little to help people move towards financial inclusion. It supports the old ethos of dependence on the welfare system, and it doesn't support the Government's aspiration that excluded people should be supported to help themselves. In other words that people should be able to:
"I am currently in discussion with institutions in the city and the banks about how a reformed and financially inclusive social fund might help to achieve exactly these aspirations.
"What I want to see is an enhanced social fund that delivers more than just loans. I want to see a complete product that provides people who have not had one before with bank account facilities. We want to reduce the number of people who don't have a bank account by half and social fund reform can make a clear contribution towards that objective.
"Another opportunity to tackle financial exclusion is in the area of reforming Housing Benefit. As the Minister for Housing Benefit, it is important to me that this benefit also makes a contribution towards tackling financial inclusion.
"Unfortunately, in its present form, it is largely a passive benefit and can contribute to trapping people into benefit dependency. I want it to offer a more active form of support - so that it too provides a step towards employment and financial inclusion. And to achieve this, I want to increase the numbers of tenants handling their own Housing Benefit payments.
"People not taking this responsibility risk undermining their self-reliance and independence and I am particularly concerned that among social tenants, fewer than 5% of them currently manage their own Housing Benefit payments.
"Implementation of Local Housing Allowance, where payments are generally made to tenants, extends the principle of tenant responsibility and bank account usage throughout the private sector.
"An indication of the sort of progress that can be made comes from the fact that in the authorities already administering Local Housing Allowance, 85% of tenants now manage their Housing Benefit.
"In addition, these authorities encourage bank account use and in cases where payments are made to the tenants, two authorities (South Norfolk and Guildford) now pay into the tenant's bank accounts in 100% of cases, and a third (Norwich) 99%.
"You will be aware that I am not going to introduce that reform into the social sector - nevertheless, I want to extend the principle of tenant responsibility to that sector as far as I can.
"I fully understand such concerns (about such proposals), and I don't intend to make changes that will affect social tenants until I am confident that we have determined the right approach and that the right support mechanisms are in place.
"Just as we did when developing Local Housing Allowance, we will base our approach on gathering evidence and working with other expert organisations - such as the NHF and its members - to inform a reasonable approach.
