Councillor Cotton’s sweet- heart welfare deal with Asda

More information was revealed at last week’s Council meeting as to how the Birmingham council entered into a so-far exclusive deal with Asda to provide payment cards to claimants receiving crisis payments. The use of payment cards has recently replaced Social Fund crisis loans in the city.

The payment card arrangement will provide a significant income stream to Asda funded from claimants in financial crisis; Asda is part of the Billion dollar US transnational Walmart.
Answering questions from members of the public, the Cabinet member for Social Inclusion, Cllr John Cotton revealed that the award of the contract was delegated to officers who conducted the procurement in less than ten weeks. Asda, being the only company able to respond within this time-scale.

The questioner had sought to find out what political decision had been made to pursue payment cards, but it appears that the Cabinet dealt with the issue as a technical matter when they met in January and rubber stamped the decision to procure the cards.

Critically the Cabinet member confirmed that there had been no consultation with claimants directly affected by the move, claiming that third sector organisations had been consulted on their behalf.
The use of payment cards is controversial as it restricts the choice of claimants as to where they can shop and for example would prevent them from shopping at the markets or local shops where items might be cheaper. They also risk identifying and possibly stigmatising the payment card holder as a claimant in financial crisis.

Following the abolition of the Social Fund by the Government responsibility for providing Crisis payments and Community Care Grants moved to Local Authorities on 1st April. Councils have been freed to make their local arrangements for Local Welfare assistance.

Challenged to explain why cash payments could not be made as a non-stigmatising form of crisis payment, Cllr Cotton’s answer seemed to suggest that payment cards were a cheaper option relative to the costs of security and the administration of handling cash.

But the question still remains as to why claimants cannot be paid by Bankers transfer or through a pre-paid debit card?

There is also a question as to why Birmingham City Council is dealing with a company like Asda.
When the Labour Group was elected in May last year it was committed to introducing a Business Charter for Social Responsibility.

One year on the still draft charter proposes that companies contracting with the Council should support the fundamental International Labour Organisation conventions and to pay the living wage to their workers. Asda arguably fails on both these points and should be excluded through its exploitation of unpaid forced labour through the use of Workfare.

Birmingham Council received £6.1m for this financial year from the DWP to fund the local welfare assistance scheme. Funding for 2014-15 is frozen and represents a real terms cut at a time of increasing need caused by the impact welfare reform programme.

After the meeting one of the questioners stated:

Asda-Walmart are the recipients of significant corporate welfare benefiting from the exploitation of the claimants forced into workfare and now a payment card deal funded by public money. We need to know the financial benefit of this payment card scheme to this company?

At the same time Birmingham Council is saying that they do not trust claimants to spend their money responsibly, this buys into the Government’s attack on claimants. The Council should immediately consider other forms of payment that shows full respect for the dignity of claimants.

The public questions can be viewed at:



Filed under Birmingham City Council, Cuts

5 responses to “Councillor Cotton’s sweet- heart welfare deal with Asda

  1. Telman

    It is remarkable that a Labour-led council would support ASDA in the first place!
    Walmarts, in America, amongst others matters which expose them as being very aggressive when it comes to contracts they have with suppliers, have a dubious reputation when it comes to employee rights and representation. (I am aware of this from direct knowledge, not hearsay.)
    Not so very long ago – five years ago, perhaps a bit longer – ASDA, the wholly-owned outlet for Walmarts, demonstrated a like aggressive resistance to members of its staff joining a union.
    Whilst I have no comment to make about Labour distancing itself from too close a contact with unions (especially after the Milliband -v- Milliband fiasco), I do think one would expect that Party to show a more acute concern for what is genuinely in the best interests of those who need compassion and help rather than throw them as prey to the predator ASDA.
    Shame on you, Cotton and all other Labour councillors.

  2. Suzanne

    Disgusting…I will never shop at Asda again!

  3. Kari

    I totally agree with what Telman has written above. I too, know how aggressive Walmart are. I do not shop in Asda on principle…
    Quite apart from this, however, is the worrying seepage (Or torrent?) into our society of stigmatisation and discrimination against people who require any help from the State.
    Being forced to shop at one store, is an horrendous limit to the choices that every person in Britain should have about where they choose to shop and HOW they choose to shop. I think this move by Birmingham City Council smacks of a fascist approach (I don’t use the term fascist lightly) to people on welfare, and ties in with the stigmatisation and discrimination that people on welfare are suffering through the horrendous media and government approved campaigns to spread discrimination throughout our society.
    If I had to be in this position, I would be forced to shop at a store that represents everything that I disagree with about globalisation, corporate greed, and exploitation of workforces.
    I find this partnership between Birmingham City Council and Walmart disturbing and worrying for many reasons. The main one being that this is the continuation of an unacceptable and dangerous move towards punishing people for being both poor and in need of help.
    Birmingham City Council need to have a rethink as a matter of urgency. This move is unacceptable.

  4. Nothing for it but, 2 boycott Asda & then a mass march 2 Birmingham Council & throw the lot of those corrupt scum out! Let them b out of work, c how they like a taste of what they choose 2 mete out 2 others! We really must make moves & take no more of this disgusting, vile, evil corrupt Government,s actions! They dont work for us, their Masters r the Banking Elite.

  5. Pingback: Birmingham Trades Council » Councillor Cotton’s sweet- heart welfare deal with Asda

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