The government has been urged to consider giving cash to low-income families as a more “efficient and dignified alternative” to vouchers or food parcels, following last year’s controversy over low-quality free school meals.
A new report from the Social Market Foundation argues that giving money directly to parents whose children qualify for free school meals could be more effective than its current approach of providing vouchers and food parcels, and that the government should be doing more to determine whether this is the case.
The public policy think tank also said enabling parents to choose what to buy for their children, rather than deciding for them, would be a “non-paternalistic” approach that better respects people’s dignity and autonomy.
In recent years, development agencies working in lower-income countries have been carrying out cash benchmarking – an approach that benchmarks an aid programme’s effectiveness against the alternative of giving people cash transfers.
Giving people money directly is becoming a more popular approach as a result because “cash tackles the problem at its root”, the report said.
The SMF is now urging the UK government to integrate cash benchmarking into policymaking for policies such as the provision of free school meals, to ensure that it adopts the most effective approach to helping its citizens.
The report follows a series of controversies over the provision of food during the pandemic to children who would normally qualify for free school meals.
The department was slammed last year after Chartwells, a company it contracted to provide food parcels while schools were closed, was shown to be handing out packages of low quality and value.
And there have also been snags in a voucher programme that DfE contracted employee benefits company Edenred to administer during the coronavirus crisis. In December, the National Audit Office found the department did not know how many children had been supported by the voucher scheme, or how much profit Edenred had made.
Last month, the Department for Education’s permanent secretary, Susan Acland-Hood, said DfE had been able to find no “strong market alternative” to Edenred.
But the SMF said civil servants should be considering direct cash transfers as a realistic alternative to vouchers or food parcels in future. It said the controversy had been “instructive”, showing that “government is in general too reluctant to use cash payments, and too often relies on less effective and efficient schemes like the food parcels”.
Civil servants putting forward ideas for this or similar policies should be asked to show why their approach would be better than giving people cash directly, the report said.
The approach should also be used in impact assessments – where “officials should be encouraged to consider the option of cash transfers as a more challenging alternative to the ‘do nothing’ scenario”.
And it should also be used to evaluate policies that have been put in place. Piloted programmes should therefore include a control group where people are given cash, or the results of the policy are compared to “established estimates for the impact of cash”, the SMF said.
“The underlying logic of cash benchmarking is just as applicable to rich-country contexts like the UK: it makes cash more salient as an option, highlights the opportunity cost of policies and highlights and tests the underlying assumptions behind the policy,” the report said.
The report stressed that cash transfers are not inherently better than alternative aid in all circumstances. However, it said giving people money is “plausibly often better than alternative ways of trying to help them”. Only by comparing alternative interventions will policymakers be able to understand the rationale behind them and evaluate their success, it said.
The SMF’s chief economist, Aveek Bhattacharya, noted that: “Despite growing enthusiasm in some quarters for cash transfers, and substantial evidence of their effectiveness in addressing the consequences of poverty, the British government remains reluctant to give citizens money as a way to achieve its objectives.”
Using the report’s suggested cash benchmarking approach, he said, could “help bring about policies that more reliably meet the needs of those they are trying to support”.